Why "blockchain" is BS in 4 slides - <AUTHOR> https://twitter.com/ncweaver/status/980485587827224577 <comment><USER3> There is some truth in the slides but it's well mixed with falsehoods and misunderstandings.

* Distributed consensus schemes are not useful only for monetary applications. When they are used as such, there exist mechanisms to commit to a certain fiat price and minimize market exposure to the point where transactions are almost free, in fiat terms.

* The disbursement of tokens and the distributed consensus rewards do not need to be tied together like in Bitcoin. A premined token like Stellar can offer very strong security guarantees without needing mining pools (but of course, any kind of imaginable database is vulnerable to majority attacks, so that means nothing by itself)

* The limited block capacity is a Bitcoin-specific problem that incidentally motivated interesting results in off-chain transactions (Lightning).

* The sorry state of the distributed financial markets says nothing about the technology and more about human greed and the slow capacity of regulators to adapt; critically, smart contracts and distributed algorithms enable control mechanism and hard guarantees that have no old world equivalent, they can eliminate counterparty risks, guarantee solvency and fair arbitration etc.

That being said, 95% of the times the word "blockcahin" is uttered these days, what follows is most likely bullshit.

<comment><USER4> > _smart contracts and distributed algorithms enable control mechanism and > hard guarantees that have no old world equivalent, they can eliminate > counterparty risks, guarantee solvency and fair arbitration etc._

The required nexus between the blockchain and the tangible and legal worlds means every limitation that exists today will exist for a "smart contract". It's the same plumbing with a paint job.

<comment><USER5> I'm sort of thinking out loud here, but the nexus will have to consist of third-party auditors who operate based on reputation.

Right now, we have the government operating as both the "miners" and the auditors.

A middle-ground, then, might be one in which there is a general-purpose public blockchain where the government takes the role of the trusted third-party _on- chain_ , thereby lowering the overall societal costs of things like unfulfilled contracts while still ensuring that my oil-reserves are what I say they are.

From the government's perspective I see this as desirable but falling prey to the principal-agent problem. We'd need virtually no civil-court judges or attorneys to prosecute white-collar crime anymore. It'd lower costs, but in doing so unemploy many of the people in the system.

<comment><USER6> This is called the Federal Reserve Bank and it is indeed separate from the tax and fraud portions of the federal government in the US.

But the rest of your post is pretty silly. How does a secure digital exchange protect against fraud? It doesn't.

<comment><USER5> Fraud can occur when a party lies about assets it owns when entering into an agreement, which would be prevented if you had to present proof of ownership for any asset you claim to own? Most ponzi schemes would never happen.

<comment><USER6> You can own something, accept payment for it, and never actually relinquish ownership. Besides, the blockchain is only proof of ownership of things on the chain. Real world things are not covered at all.

<comment><USER7> Digital rights are real words things though. Other forms of rights that are not currently digital could be made digital too.

</comment></comment></comment></comment></comment></comment></comment><comment><USER8> Ethereum smart contracts are million dollar bug bounties? That sounds about right to me, and seems historically accurate.

<comment><USER9> By this logic so is every financial software system, though.

<comment><USER10> Bugs in financial software can typically be unwound by the parties involved, or by courts, or both. This is less true for a scheme designed to be irreversible in itself.

<comment><USER11> Traditional finance isn't any easier to unwind than bitcoin. If I give you $5 I can't magically "erase" that transaction. The $5 bill doesn't materialise back in my pocket. Instead, I get the police to force you to give the money back. As an accountant, if you erase a transaction (even if it was a mistake), you can go to jail. What you do it make a balancing transaction to correct the mistake. Nothing is stopping you from doing the same thing with bitcoin. Making it so you can't erase or hide the previous transaction just enforces rules that already exist -- and it a great feature.

The main difference is that it is infeasible to hold large amounts of cash, and so we usually allow a third party to hold on to our money. That third party will usually hand over your money if requested by the government (some overseas banks are notable exceptions!!). With bitcoin I can hold on to it myself and not have to worry about the actions of a third party. Secondly, even if you horde cash, it's hard to secure it. It's basically impossible to make it so that only you can access it. With Bitcoin, it is easy to secure a large amount of value and ensure that only you can access it. Bizarrely, a large number of people totally ignore this advantage...

This is the entire point of bitcoin. With the hype, fraud and what not, people often assume that bitcoin must have been developed as a scam. But I really do believe that the purpose was to allow people to have access to money and _not_ have to rely on a third party who probably doesn't have your best interests at heart. It's not really surprising that criminals will be interested in this kind of system. They are the ones with the highest need. The government can't freeze your account.

The interesting question is: do we need that kind of security? Do we trust the banks and government to act appropriately with our money?

<comment><USER10> The difference is that if there is an _error_ , I can unwind the error with the counterparty's cooperation _or without it_.

A bit harder to do that when someone deprives me of bitcoin by theft or fraud.

I am familiar with compensating transactions. Ledgers are a necessary mechanism, but they are not a _sufficient_ mechanism to safeguard against theft, fraud and error. These systems work because of multiple overlapping defences and they still fail.

I find that I tense up at the strong strain of technoutopianism that runs through bitcoin and cryptocurrency circles.

You're asking the rest of us to bet everything on block. I don't trust anyone to not make a mistake and I don't believe in single lines of defence, no matter how computationally intractable they are on paper.

</comment></comment></comment></comment></comment><comment><USER12> The slides make a number of decent points, but the general tone ends up being self-defeating, which is a shame because many of these points are actually worth debating in depth.

Specifically, on governance of blockchains (as in: trustless distributed consensus systems, and not as in: merkle chains), I do tend to agree with the tweets that devs have a huge amount of pull, and that this is both grossly under-estimated and under-discussed.

</comment><comment><USER13> Isn't he discussing cryptocurrencies in particular rather than blockchain in general? There are many uses for blockchain other than as a cryptocurrency.

Correct me if I'm wrong - I'm not an expert in blockchain by any means.

<comment><USER14> >There are many uses for blockchain other than as a cryptocurrency.

Name one.

<comment><USER15> Governance (DAO's, Ardent United, Aragon, etc.)

<comment><USER16> That's "interesting" as opposed to "useful", because The DAO is most famous for being hacked.

</comment></comment></comment></comment><comment><USER6> Brutally concise. This thread is going to get rough.

</comment><comment><USER17> > Cryptocurrencies are provably inferior when you don't require censorship > resistance

A) This isn't true. They also have predictable monetary policy and anonymity (or pseudonymity, in the case of Bitcoin). These can be _useful_ properties, whether or not you agree with their uses.

B) Even if it were true, so what? Censorship-resistant money seems like a pretty cool technology to me.

> Any volatile cryptocurrency transaction requires two currency conversion > steps.

Sure, in the absence of merchants accepting the currency that is true. But that's sort of like decrying the internet as useless when it came out because nothing was on it. And listen, if you want to go ahead and make a case that cryptocurrencies are structurally incapable of becoming commonly accepted - <USER2> all means, go for it. _That_ is how you attack the concept. You don't attack a new technology by saying it isn't adopted yet:

"Cars can never work because there are no paved roads"

"Credit cards are stupid because nobody accepts them"

If you want to try to make some intrinsic, fundamental case that there is some structural barrier preventing the adoption of cryptocurrencies, that's a perfectly reasonable line of argument to make. Simply stating the obvious, that they are not yet widely accepted, is not.

> Any lottery-based reward creates mining pools, which means a few entities > can and do control things.

While true in a certain sense, an analogy here might be useful: Capitalism is centralized, because people organize into corporations, which end up aggregating capital. This is an accurate description of capitalism. However, capitalism is still distinct from what's commonly known as 'top-down economic planning', e.g. communism. The fundamental difference is that the process is organic, and for the most part, empirically, the organic version of this process leads to better outcomes.

Again, perfectly fine to argue that _this particular one_ doesn't lead to good outcomes for such and such reasons. However, to argue that it is centralized, is kind of missing the point. Yes, powerful entities do form, but their power is not guaranteed. Their power is highly contingent upon their continued performance of their duties, and the collective desire to let them keep their place. This powerfully aligns their incentives with the well-being of the ecosystem.

Now, does this mean that that alignment is perfect? Definitely not. Just like in a capitalist economy, those incentives can and do deviate from each other. _However_ , these things do not exist in a vacuum. All tradeoffs must be considered as alternatives to competing mechanisms. And I think the tradeoff made here by crypto-currencies is a good one, relative to alternative options.

> Limit capacity fee death spirals

This whole slide just ignores the existence of payment channels. The author is sufficiently educated to know he's being disingenuous here, so there's no need to respond to it beyond that.

In summary, and I want to be totally clear on this: There are great reasons to be skeptical of crypto-currencies. There are lots of things they don't do well, and there are lots of very serious tradeoffs that they make that are different than the ones we make with government-backed fiat currencies. They pose real risks to certain pillars of civilization and it's not clear that they are on balance good things. But our criticisms of them should be couched in an understanding of those risks and tradeoffs. They offer real benefits in some dimensions, and they have real costs in others.

If someone is telling you that a politically neutral, censorship-resistant world currency is, a priori, useless, you may want to re-evaluate the source. We may or may not _like_ what something like Bitcoin will do to the world - but the idea that it doesn't have the potential to do _anything_ is really quite silly.

<comment><USER4> > _This powerfully aligns their incentives with the well-being of the > ecosystem_

Like ensuring Bitcoin can't scale beyond the Great Firewall's limits?

<comment><USER17> What do you mean by that? By 'scale' are you referring to transaction scaling? If not I don't understand your point.

<comment><USER4> Bitcoin miners' interests don't always align with the Bitcoin community's. Miners want to keep control. If growing the system means they lose control, it can be in their interest to limit growth (which benefits everyone but hurts them). This appears to have happened with mainland Chinese miners resisting transaction scaling on the Bitcoin blockchain due to their Internet constraints (being behind China's firewall).

<comment><USER17> Ah, yes, that is an excellent example of that sort of misalignment. However, I think its also an excellent example of what's great about cryptocurrencies. Because in that situation, Bitcoin as an ecosystem has an out: A hardfork. If the miners and the users disagree, a new group of miners can form around a separate code-base that addresses this problem in a different way. Everyone in the ecosystem is incentivized for this not to happen, because it dilutes value. However, if the issue becomes salient enough to overcome that dilution, a fork will occur, and that has happened a few times now.

To me, this is a pretty awesome way of discovering the best way to do things. If two parties can't come to agreement, they simply go their separate ways, and organically the system comes to decide which chain is more valuable. I find this to be one of the most beautiful, elegant parts of the crypto ecosystem.

Consider the contrast to a government currency. If you disagree with how the Chinese Communist Party manages the Renminbi, or how the Federal Reserve manages the US dollar, you don't meaningfully have the option to create your own alternative, and let it be judged by the world. This is the truest sense in which crypto is decentralized.

Now, this model is not without its flaws. National currencies have done very well for a long time being managed in this way. The ability to homogenize everyone on a single national currency has real benefits. It's easy to build up lots of infrastructure around it because it's dependable, for instance. Thinking through issues like this are really what's at the root of a well thought out criticism of crypto-currencies, though, IMO.

</comment></comment></comment></comment></comment><comment><USER18> The whole cryptocurrency market is surreal to me for these reasons and many more.

But I did think the same thing about Twitter, especially early on when it was constantly broken. And yet, while it was broken people were still talking about it and it was gaining mommentum.

That's the parallel I see here. Enough of the right people are talking about it that it's going to be a thing for at least the near-term future. The whole eco-system can be flawed, but it has momentum.

And even among those that have been scammed, it's in their best interest to keep pushing the virtues of cryptocurrency as long as they have any left to sell.

<comment><USER19> Except the thing that kept twitter around through the problems was celebrities. People following celebrities like Ashton Kutcher and Kim Kardashian and comedians kept it relevant until it became used in the Arab Spring and then it became "legitimate."

I don't see a parallel there for cryotocurencies. It's just a bubble and I don't see any Arab Spring type of event to legitimize it.

</comment></comment><comment><USER20> Disagree with slide three on "private blockchains". Weaver underestimates the difficulty of reaching consensus among a fixed set of participants by assuming there is just one party that signs blocks. If there is more than one party you end up in the land of BFT. Distributed systems are hard to build. Additionally a solution which is trivial to implement makes that solution good. I wish we had more trivial solutions to these problems.

</comment><comment><USER21> Seems fair.

Would be nice to have a fifth slide explaining friction cost and why it might be a very bad idea to embed ever increasing friction as your formal verification method.

</comment><comment><USER22> Totally off topic but for his bio says for secure messages use Signal/iMessage.

Signal is great but iMessage?

<comment><USER23> iMessage is more popular. You want people to use Signal, but if they don't want or cannot use that, iMessage is his preferred alternative. For a similar reason, I use Signal and WhatsApp. (All 3 are E2EE.)

Nicholas Weaver covered iMessage's strengths and weaknesses before:

(20150804) iPhones, the FBI, and Going Dark [1]

(20150806) Nicholas Weaver on iPhone Security [2]

(20150908) Apple's iMessage defense against spying has one flaw [3]

(20171211) Is Apple Fully Complying With iMessage and FaceTime-Related Court Orders? [4]

I also remember a technical analysis on iMessage by either Matthew Green or Nicholas Weaver.

[1] [https://www.lawfareblog.com/iphones-fbi-and-going- dark](https://www.lawfareblog.com/iphones-fbi-and-going-dark)

[2] [https://www.schneier.com/blog/archives/2015/08/nicholas_weav...](https://www.schneier.com/blog/archives/2015/08/nicholas_weaver_1.html)

[3] [https://www.wired.com/2015/09/apple-fighting-privacy- imessag...](https://www.wired.com/2015/09/apple-fighting-privacy-imessage- still-problems/)

[4] [https://www.lawfareblog.com/apple-fully-complying- imessage-a...](https://www.lawfareblog.com/apple-fully-complying-imessage-and- facetime-related-court-orders)

</comment></comment><comment><USER24> I'm not a fan of cryptocurrency and even these slides were horrendous. Seriously, way to make your point so poorly that not even people who agree with you want to read it.

Also, this guy didn't even discuss blockchain tech. Just cryptocurrency.

<comment><USER25> Because without cryptocurrency, as he says, it's a merkle tree and THAT IS NOT NEW. Github already did it. It works. Revolutionary? No.

<comment><USER26> *Git already did it. GitHub is just a site running a Git server for people to use.

<comment><USER25> I choose Github just because of its indisputable scale and financial success. Github pushed git to where it is now. Not linux (we don't even use git remotely like the kernel devs do), not Linus, or any previous system. Github did it.

Say what you will about their ethics, their structure, their politics, that company did this thing and they're now more important to the world of software products than any prior company in that role ever has been.

</comment></comment></comment></comment><comment><USER27> A lot of what you said was crap and it devalues ther correct things you said. That said I assume you used these as a visual aid and maybe delved more than what you posted here, a lot is very extreme.

</comment><comment><USER28> I read some of the slides, but they are authored from an emotional standpoint, which makes it difficult to follow ideas and conclusions. Statements like "public blockchain security is a lie", are just not useful. If this content is used at Berkley I'm worried for peoples tuition. I'd expect more depth and logical statements for a presentation at a university.

<comment><USER23> > Statements like "public blockchain security is a lie", are just not useful.

The good news is the statement you quoted was _not_ made.

> I'd expect more depth and logical statements for a presentation at a > university.

The slides _contain_ logic statements, depth, and e.g. historical comparisons.

Since there's some character assassination in this thread (how sad): Nicholas Weaver's credentials can be found here [1].

[1] [http://www1.icsi.berkeley.edu/~nweaver/](http://www1.icsi.berkeley.edu/~nweaver/)

<comment><USER28> Sorry, I don't know the author and it shouldn't matter. Still think the slides are made up of emotional trigger words rather then arguments and content, you can grab content like this from random reddit threads. How sad indeed.

<comment><USER23> They're a summary (powerpoint presentation); not the actual argument(s). Emotional trigger words stick; empty abstract words don't.

</comment></comment></comment></comment><comment><USER29> What am I missing about Cryptokitties? It was on the last side. A16Z/USV invested $16M [1].

They claim digital collectibles is a viable business.

[1][http://fortune.com/2018/03/20/cryptokitties-andreessen- horow...](http://fortune.com/2018/03/20/cryptokitties-andreessen-horowitz- cryptocurrency-ethereum/)

<comment><USER30> According to USV, the reason is that the underlying technology is really exciting and has lots of potential:

> The (original) internet brought us a world where any site could link to any > other site, and they could all be accessed from anywhere in the world. This > was the first interoperability revolution. The next one will be with data > and digital assets. For a long time, data has been the property of platforms > — with cryptonetworks and cryptoassets, data can live outside of anyone > platform, under the control of users. This has the potential to open up a > lot of innovation. [0]

Matt Levine as usual had a bit of fun with this:

> Look: They are right, and I was wrong, and I am sorry. I thought that > CryptoKitties was just a game that allows you to buy cartoon cats on the > blockchain, and I thought it was silly. But I completely missed the point. > CryptoKitties is actually a game that allows you to buy cartoon cats on the > blockchain, _and put little hats on them_. [1]

[0] [https://www.nickgrossman.is/2018/zombies-eating- kitties/](https://www.nickgrossman.is/2018/zombies-eating-kitties/)

[1] [https://www.bloomberg.com/view/articles/2018-03-22/when- marg...](https://www.bloomberg.com/view/articles/2018-03-22/when-margin-loans- go-wrong)

</comment></comment><comment><USER31> That's not why blockchain is bs.

Let me tell you a little story you might want to remember, so you can tell your grandchildren. This is how you might tell them:

"You think algorithms are hard, little children? You don't want to stay up to date? Well gather round, gather round, let gramps give you a sense of human folly and just how far we have come. Maybe that will let you appreciate how lucky you have it.

"Way back before all these modern doodads, gizmos, and doohickeys, back in aught 9, or "two thousand and nine" as we called it, mathematicians were so clueless about algorithms that they made distributed databases resistant to sybil attacks through proof of work doing random-ass hashes. What that meant is instead of figuring out how to prove nodes weren't colluding, we made them prove they were burning oil - or gas - or coal - or sunlight, or whatever they wanted. But they had to throw their hands up and come up with a random hash, to prove that they were really all working on the problem.

"By 2018, the resulting worldwide bitcoin database used 30.1 terrawatt-hours of power per year to perform the work that a $20 dedicated chip could do in the size of a container of tic-tacs. And that $20 includes 100 gb, a dedicated microcontroller, and 5 years worth of alkeline batteries. The database size borders on nil.

"All because we didn't know any better. That is something like $3,848,100,000 in 2018 money - three _billion dollars_ spent on doing $20 worth of work.

"To put this into perspective, imagine that in 1802, Merriam Webster had purchased fifty thousand tumblers, into which it put printed plates, and then hired fifty thousand workers to open each one every few minutes, and count to see if it had managed to assemble the plates into alphabetical order. (This is called bogosort.)

"Well, if you don't know that there is such a thing as a sorting algorithm, if it's unknown to science, then perhaps bogosort is the best you can do. Such was the state of distributed blockchains in 2018.

"So you need to be thankful for what you have. Oh but it's tough! You have to think it through! Well in my day nobody thought it through. We just shoveled thirty terawatts of coal into furnaces and made little kids cry when they couldn't afford gaming equipment anymore, since all of it was being used to get around the fact that nobody sat down and did the math for a $20 distributed database.

"you kids have it printed in black and white. sit down and learn. we had to take electricity from schools and hospitals, to raise the sealevel to where parts of Hawaii had to be evacuated. This stuff has consequences. Learn your algorithms. Trillions of watts died for them."

<comment><USER32> Blockchains are moving away from PoW to PoS, which requires a millionth of the energy use, so that's not really an argument.

<comment><USER31> Kindly elaborate. Which ones? To what extent? What is the state of the art here?

This was my only issue with bitcoin when I evaluated it several years ago.

<comment><USER32> Pretty much all the newer ones, Nano, Iota and Eth probably soon to.

There is also a debate to use delegated PoS or a hybrid of PoS and PoW to get both of their upsides with none of tbeir downsides.

<comment> yc-kraln Iota is not a blockchain. It's also not a cryptocurrency. It's about 98% scam and 1% insane. and 1% Bosch.

<comment><USER32> Yes, 3rd gen blockchains aren't blockchains anymore. :)

</comment></comment></comment></comment></comment></comment><comment><USER4> In my travels across the country, one angle of cryptocurrencies I take solace in is its relative confinement to younger urban coastals (note: I'm one of these). Its proponents can, for the most part, afford to lose their investment. In a decade's time we'll have a generation of investors with a healthy sense of wariness.

<comment><USER33> That is not true in either case. Cryptocurrencies have gone mainstream recently, receiving a lot of attention by the mainstream press. Additionally, there's no proof that being burned by cryptocurrency shenanigans leads to greater wariness in the group as a whole.

<comment><USER4> > _Cryptocurrencies have gone mainstream recently, receiving a lot of > attention by the mainstream press_

They receive a lot of press attention because people like me, who don't own any cryptocurrencies and never plan to, find them fascinating. When I'm in San Francisco or certain bars in my Manhattan neighborhood, people talk about owning them. When I'm at a restaurant in Phoenix or Salt Lake City or Raleigh, it's people observing the phenomenon just like I am.

> _there 's no proof that being burned by cryptocurrency shenanigans leads to > greater wariness_

Fair enough. My basis is the general wariness that followed the Great Depression. (Counterfactual: no such enduring effect followed the dot-com bust nor the financial crisis.)

</comment></comment></comment><comment> a-dub The financial side is weird, but there are some clever implementations of cryptographic protocols in the crypto currency space that could be used for the design of semi-decentralized services that could make the internet better.

This stuff could be the makings of /etc/passwd for the internet.

</comment><comment><USER34> > protection is limited to the amount of money wasted

Somebody hasn't been keeping up with proof-of-stake research.

> spammers who want to occupy space _forever!!!_

Or Ethereum's storage rent proposals.

</comment><comment><USER35> April fools?

</comment><comment><USER36> Blockchain = [https://en.wikipedia.org/wiki/Audit_trail](https://en.wikipedia.org/wiki/Audit_trail) \+ [https://en.wikipedia.org/wiki/Public_key_infrastructure](https://en.wikipedia.org/wiki/Public_key_infrastructure)

</comment><comment><USER37> Has anyone not heard all of this before? And the counterarguments also?

<comment><USER25> There aren't many compelling counterarguments. That's why people haven't heard them.

<comment><USER38> There is one such argument and I don't think you would need another one. If you trust your government to control your money good for you. But most of worldwide population does not trust their governments and for a good reason. If you live in Iraqi or Syria or Somalia would you prefer your central bank to control your money or do it yourself? Blockchain gives you that option.

Wealthy people in these countries use offshore locations to secure their money from their own corrupt governments. With blockchain everybody can have such option and thus motivate governments to create better environments for ordinary people. And it is not surprising to see that democratic countries embrace cryptocurrencies and try to regulate them but more authoritarian regimes just ban cryptos.

</comment></comment></comment><comment><USER39> Since we started intercoin.org I thought I would go through point by point and see how it applies to our project. It's true that his points apply to many projects.

1) Two conversion steps - since Intercoin is designed to be used as actual currency and not just a store of value, people can pay each other anytime with zero fees. Given enough adoption, people stop cashing out (think PayPal, Venmo etc.) and just pay each other in that economy. They do this to save fees and time.

2) Entity to convert currency: Actually this entity can be a simple market maker on an exchange. Within its economy, Intercoin has sidechains for each community and deterministic pricing, with no market makers. And you don't have to worry about eg PayPal or Cyprus banks freezing your money.

3) A "private blockchain" requires far more than that if it is to be used for crypto-currency. The main guarantee is that there are no forks of the log, aka double-spends. Intercoin lets every community run their own distributed ledger, so you don't need to search the whole world for double-spends. That makes it so efficient you can even do micropayments (Netflix, Basic Attention Token etc.)

4) Proof of Work/Stake/blah. Intercoin letting communities run their own ledger the way Wordpress lets them run a blog, it comes with its own set of challenges as small communities can have very few computers. It has to be secure like your end-to-end encrypted email when you get on someone's wifi. So we can't use the traditional stuff. [https://intercoin.org/technology.pdf](https://intercoin.org/technology.pdf)

5) Lottery-based systems create mining pools: yep and in fact any kind of proof of stake creates centralization, while any kind of proof of work creates an arms race that leads to centalization. Intercoin takes inspiration more from XRP consensus protocol and SAFE network design.

6) "Code developers can and do act like central authorities." If this refers to issuing the Unique Node List like Ripple, or reverting transactions like ETH etc. then that's not good. If this means putting out a new client of server software and having decentralized adoption then that's inevitable. Otherwise you get fragmentation like Linux. And even then, there are only a few major Linux distributions. I happen to prefer _collaboration_ on a centralized codebase in this case, but decentralization in everything else. (eg I would be totally OK with WebKit being overseen by the W3C consortium and have new ideas begin as extensions that are finally adopted into the main codebase - think of all the wasted web developer man hours since multiple browsers launched).

7) Protection limited to money wasted - not sure what that means. A person knows their money can't be stolen. In Intercoin our priorities are A) the overall network must never be corrupted, B) no one can steal your money C) no one can freeze your money permanently, in that order.

8) Transactions vs Capacity. VERY good points here, and all global networks are susceptible to this, as are public facing websites (DDOS etc.) This is why Intercoin is designed to be like the original Internet, with each community able to run its own network and set its own policies. That allows a theoretically UNLIMITED number of transactions per second, not 7 or 1000. Usually each validator includes a free tier for the first X transactions per day, to known members of the network. Networks run their own computers and the consensus algorithm is much cheaper and doesn't waste half the world's electricity to work. The validators - being off the shelf computers run by random people — fund themselves through the currency. But they earn money for actually processing transactions, not a lottery.

9) Bad economics - yes this is rampant in cryptocurrency circles (eg people including Satoshi thought Bitcoin being deflationary "sound money" will make people want to spend it, when the opposite is true). Intercoin has among its advisors world-famous economists from diff schools like MMT (Walter Mosler) and Austrian School, Chicago school, precisely for this reason. We want to let communities issue their own currencies and implement UBI on a community level through entirely voluntary means. It brings together people on the left and right.

10) "All ICOs are securities being sold fraudulently" - Intercoin Inc. has raised money through exemptions with the SEC (Regulations D and S) and is now working on registering Intercoin tokens _with_ the SEC as securities ahead of a public offering. Not everyone shirks the law. In fact, we consider tech to be only one of the services we provide for communities. The others are turnkey solutions for regulations (securities, money transmission) and taxes (501c3 for UBI donations, capital losses etc.) so communities can install their currencies as easily as Stripe Atlas lets you open a company.

I hope this addresses it point by point.

</comment><comment><USER40> just name another technology that can offer immutability and transparency

<comment><USER41> Git.

<comment><USER40> I will pay you 10K in USD if you make a smart contract on Git. Publicly committed

</comment></comment></comment><comment><USER40> amazing how much hate. this is a tech social phenomena. given that only select people can downvote imagine the censorship.

</comment><comment><USER42> So, what is that you propose instead?

If nothing then disregard you.

<comment><USER43> That's a bit of a fallacy - you can legitimately point out the shortcomings of something without needing to name an alternative (e.g. criticizing Ponzi schemes). In this case, though, you could actually have an alternative of simply not using blockchain. The world was just fine for a long time without it.

<comment><USER42> For Ponzi scheme, alternative is banks and stock exchanges, _not_ "nothing".

<comment><USER44> For cryptocurrencies, the alternatives are the dozens of alternate ways of transferring funds.

</comment></comment></comment></comment><comment><USER45> I stopped reading when I saw the first slide. Seriously, who puts so much text on a slide?

<comment><USER46> "PowerPoint is also bullshit" is a separate thread.

</comment></comment><comment><USER47> Still preferable to governments printing fiat to finance war and capital crimes, while devaluing you and your generation's labor with institutionalized pro-inflation economics

</comment><comment><USER48> "Every tradeable ICO is really an unregulated security."

I disagree with this claim. It depends on whether the token constitutes an investment contract. If the token has utility, was sold as a utility bearing token (rather than an investment opportunity), and if the project possesses an open codebase which token holders can theoretically modify, then I don't believe said token is an unregulated security.

Yet, the vast majority of tokens do in fact function as unregulated securities, which is why these waters are muddled.

<comment><USER25> If it's a utility then why ICO? Strictly as a fundraising method? To enable resale? None of that requires a centralized consensus chain even in a trustless world.

No, you ICO a utility token because you hope it'll go superluminal by interacting with an ecosystem full of unregulated securities.

<comment><USER48> That may be why you would do it, but many motivations exist in this world. To reduce all these projects to greed-tunnels is to reduce these many motivations and over-simplify the world.

You are approaching the ICO as though there were some Boolean value as to whether they are "good" or "bad," and have returned "bad" for you. In reality, to throw them all in the "bad" bin is lazy and the opposite of due diligence.

Let me give you some examples of other motivations beyond fast cash that might power an ICO:

1\. Ideology

2\. Community spirit

I will not attempt to encapsulate what these motivations mean to various actors, but I can tell you that it's not "just about money" for everyone.

However, I will fully concede that most ICOs are scams. Advertising networks are not being overly cautious by restricting adbuys on ICOs. And most people are not equipped to tell the difference between a scam project and a real one.

<comment><USER48> Did down-voters take issue with my position? Please explain.

I'd love to learn more about your position. I seek the truth.

</comment></comment></comment></comment><comment><USER32> Slide 1: Obviously you need to convert from and to Fiat since crypto isn't used by the majority of people duh.

Slide 2 & 3: Yes, 1st generation blockchains are slow and have high fees. That's why Bitcoin has just implemented the Lightning Network and there are 3rd generation blockchains like Nano and IOTA that have zero fees and instant transactions. Duh.

Slide 4: False dichotomy. Yes, there are a couple of scams in the crypto sphere, even 5% of the top 100 are scams, e.g. Eos, Verge, Veritaseum. Is 5% 100%? No. Duh + Facepalm.

</comment><comment><USER49> This is an exceptionally terrible 'presentation'.

He says something about distributed trust and then puts 'THIS IS A LIE'. That's not evidence and it isn't an argument.

He states that developers act as a central authority, which as it relates to the rules of creating new units and where they go to, is not true, since those rules are already established for the given chain.

He says there is a fee auction death spiral, which also is demonstrably false. Even bitcoin, with it's ludicrous restriction of throughput by political means, hasn't actually gone through a death spiral from fees which rationally should have made anyone think very hard about its future.

He says almost every exchange is full of fraud. This is debatable, but does not actually have anything to do with crypto-currencies (which is what he is actually talking about instead of "blockchain").

The last slide is basically just venting about stupid things people have done and bought in to, but also has nothing to do with crypto-currencies not working.

It's amazing to me that people seem so certain of themselves while having such hollow arguments.

<comment><USER6> >He says there is a fee auction death spiral, which also is demonstrably false.

Pretty sure its demonstrably true seeing as BT has gotten so bad the marketing changed from currency to store of value.

<comment><USER49> I'm not sure how bitcoin's artificial restriction of throughput (which still didn't kill it in any sense) means that all cryptocurrencies either suffer from a fee death spiral or spam. Neither has seemed to happen even in extreme circumstances.

Bitcoin's nonsense propaganda has nothing to do these assertions of inherent flaws with crypto-currencies.</comment></comment></comment>


NYT Infographic Explaining Consumer Price Index - <AUTHOR> http://www.nytimes.com/interactive/2008/05/03/business/20080403_SPENDING_GRAPHIC.html

<comment><USER2> It is pretty, but I guess a simple tree map (example: <http://news.bbc.co.uk/2/hi/technology/8562801.stm>) where the sizes of the various rectangular pieces give some idea of the %age would have been much better.

</comment><comment><USER3> This is very cool.</comment>


Was the JetBlue Turbulence Incident Avoidable? (Answer:  It Was) - <AUTHOR> http://cliffmass.blogspot.com/2016/08/was-jetblue-turbulence-incident.html <comment><USER2> JetBlue 429 was rocked by severe turbulence over South Dakota on Thursday afternoon, August 11. Thankfully, the flight I was on avoided the area (Southwest 1415). We left Denver around 11 am and flew NNW over southeastern Wyoming, Nebraska, the Dakotas, and on into Canada. We didn't reenter the USA until we dipped south over Vermont. We still arrived in Boston 20 minutes early, possibly because of the jetstream.</comment>


How much does employee turnover really cost? - <AUTHOR> https://medium.com/latticehq/how-much-does-employee-turnover-really-cost-d61df5eed151#.p105nzhlz <comment><USER2> Two thoughts:

* It's a good idea to try to quantify the cost of losing an employee. If you at least understand what basic costs you'll incur, such as cost of hiring, training, etc. it'll give you a basis for realizing the importance of minimizing turnover (perhaps you'll even conclude that turnover isn't a big deal in your case). But it's very hard to quantify some of the largest costs such as employee moral. I was once at a company where an entire (small) team slowly left after a single person departed. Perhaps any individual's departure could have been handled without too much of an issue, but the loss of entire team and all the institutional knowledge contained there was quite damaging to the company.

* The article mentions some tips for retaining employees and I think they are spot on. But I don't think it emphasizes the importance of salary enough. A lot of employees jump ship because of the higher salaries they can get when they move around. Meanwhile, the original company they left will likely have to pay market rate to get someone with similar experience (and none of the institutional knowledge), so they would have been much better off if they would have just bumped their employee's pay to market rate in the first place. By the time it gets to a counter-offer stage, it's often too late.

EDIT: The article briefly mentions the importance of paying market rate salary, but I missed this sentence when I read it over the first time. Updating my second bullet accordingly.

<comment><USER3> I've been to management seminars where they downplay the importance of money, saying that employees are mostly motivated by other factors. Then I talk to my co-workers, the ones that are quitting, and about half of them leave because they've been working for 2+ years without a raise.

I worked at a company where a company decided to introduce a new management program (LEAN) into one department. That 16 person department saw 18 people leave during my 6 months at the company, and only three of the original team was there when I left. That is to say, five people started work after I showed up and left, before I quit to be a WFH dad.

And yet, nobody blamed the brass or the people implementing the LEAN program.

<comment><USER4> I'm guessing few would book a management consultant simply telling to pay people more money - consultants who want a job instead have to explain how to motivate for free.

But the people who share a lot of the blame for this idiocy and who have no good excuse are "heterodox economists" and TED talk presenters telling us how money doesn't motivate people past a certain point, or how it actually makes people less creative, all supposedly to criticize "capitalism" but in fact to make the market work worse for employees who now actually have to argue with management that yes, money does motivate them, with the manager replying "I know it doesn't so tell me what's really bothering you" or what-not. I mean it's not like companies seek less profit having seen the TED talk, instead they learn that they can cut expenses by avoiding "needless" raises. Quite the heterodoxy, that.

<comment><USER5> Money doesn't motivate people past, oh, a half million or so a year, maybe.

<comment><USER6> Exactly yes. I used to make over a million a year as a big 3 partner in management consulting. I dialed back to half time and am UNBELIEVABLY happy!

<comment><USER7> Is that because you saved enough making a million a year you can now afford to work only half time and absorb the pay cut?

</comment></comment></comment></comment></comment></comment><comment><USER8> I've often been shocked at how a theoretically rational profit seeking business will happily throw millions down the drain rather than compensate an individual based on value. Ultimately I've concluded that although they may be greedy, most businesses don't make rational profit seeking decisions. They make decisions that stroke their ego, and sometimes their ego can't accept the value that certain employees bring to the table. They are just coders right? /s

Nowhere was this more apparent than at my first big job. The company's first full time engineer was still working there, and still extremely essential to the operation of the business. (It was actually bad that he was so essential, but that's another story). This company made several hundred million dollars a year. Online. And almost daily this individual used their tribal and historical knowledge to keep the site up. He left. I doubt he was paid a million dollars, but I have no doubt that paying a million dollars to keep him around would have been a cost saving measure.

<comment><USER9> It's not about what salary that engineer deserved, but what they could command. That engineer might have done $1 million worth of work a year, and deserved a $1 million salary; but he couldn't go to another company and proclaim he was worth $1 million. He could probably go elsewhere and get a slightly above average salary, your company knew that, and that is why they paid him that.

<comment><USER10> You know what's even worse at trying to surface? When you _saved_ your company millions of dollars! I'm not talking theoretical dollars here, I'm talking about last year X cost $Million, and this year due to my finding out some egregious mistakes and fixing them, that cost was measurably less by seven figures, and no one bothers to tell that story to the higher ups! I just wonder what these people do all day? Darn few managers I have ever worked with seemed able to even tie their shoes properly.

Meanwhile, I had to sit through an all hands meeting where some dingy broad got a 5 figure award for cooking up an Access database that some asshat manager used for like a week!

Franz Kafka could not dream this up!

<comment><USER11> Because of stories like this I am generally against publicly praising individual employees. Whenever you do that there is gonna be somebody who did something great you don't know about and aren't praising. There might even be people who think that what the person you are praising did something bad. I remember a all-hands meeting where somebody got praised for working all weekend. Later in private several people were disgruntled and claimed the person only had to do so because they had messed it up before despite being told to use a different approach repeatedly.

Just praise people in private, actually trust them and listen to them and reward them accordingly comes compensation time.

<comment><USER12> I don't think I agree; I think that your examples show that it's important to know your employees' accomplishments, and to praise people accurately. Public praise matters; I like it when my managers and coworkers acknowledge good work I do, and it's nice hearing that my coworkers are doing good work, too. Why should we all labor in the shadow? Why should we be afraid of praise?

<comment><USER11> I don't think that this means that we have to labor in the shadows. Typically people notice pretty well who is competent, who puts in effort and who actually gets work done. In a healthy organization that also will get acknowledged organically in all kinds of ways. High performers will be asked for help by others, people insist that they will be invited to meetings or that their opinion will be asked on certain matters. We shouldn't be afraid of praise but of awkwardly praising a subset of people in a all hands meeting where we might miss people who did good work and now will feel that their work isn't acknowledged. This also easily gets political. You have one manager who judges their employees wrong and their reports who did questionable work get praised at the all hands. Maybe they were recommended for praise although there manager knew they didn't really deserve it but needed done if their reports to also be mentioned. It frequently also leads to a hero coder culture. Someone who stays up all night and implements a feature that management wants really badly in a hard to maintain and buggy fashion will get praised at all hands. People who end up fixing the mess won't. Very frustrating for people who fixed it. Obviously this will kick off a feedback cycle leading to more and more all nighters producing crappy code.

</comment></comment></comment></comment></comment></comment><comment><USER13> Software development has some "special" traits that are not necessarily covered by this analysis.

For one thing, you can't just measure what a developer has _done_ ; you need some sense of how easy maintenance is _going_ to be. Given two brilliant solutions that required an extraordinary developer to create, one may be an indecipherable mess and the other may have been built in a way that makes typical maintenance tasks very straightforward. From the outside they may look the same but the cost difference is huge.

Some people are really good at writing solid code, and replacing them may mean _introducing_ headaches that you didn't have before. Also, a particularly weird bug may cost your team tremendous amounts of time (and possibly more), and you may not have the right people to deal with that quickly.

Also, "cost of hiring" probably isn't referring to the cost of having a really bad hiring staff. If those people are not doing a good job of filtering résumés or otherwise finding the right people, or if they leave good candidates dying on the vine due to slow response times, _there is a big cost_. It is extremely important for companies to look good _from the outside_ to attract candidates.

<comment><USER14> Maintenance (and maintainability) are definitely key questions for software development.

The first point, about keeping people who write maintainable code, I agree with 100%.

The second one, about keeping codebase expertise, seems complicated.

On one hand, we all know there are weird bugs and edge cases best handled by knowing the code intimately. What's 20 hours of QA and engineering for an unfamiliar team can be a 5 minute tweak for the guy who wrote the method, even with clear code and good tests. Weird bugs do happen, and just knowing that what it _isn 't_ can help with finding some awful probabilistic issue.

On the other hand, I wonder if this is a "controlled burn" kind of issue. Everyone's heard of systems that work fine for 20 years and then explode as soon as the expert leaves. Normally that's a design and maintainability issue, but at some level we're talking about bus factor here. You're definitely trading fewer crises for worse crises, but I don't know the rate on the tradeoff.

Obviously unplanned turnover is still a huge issue, but I do wonder what the right balance is on "just knows how to fix it" versus "institutional knowledge is safer than personal".

<comment><USER15> It's possible to write bug or enhancement requests against the system if it takes too long for new contributors to come up to speed. I do this from time to time.

It's important to remember that specify specific exit criteria, like "it should take one command instead of fifteen to add a new request to the XYZ endpoint."

</comment></comment></comment><comment><USER16> Here is a strange thing I have seen: Turnover is bad for a company overall, but good for H.R. HR teams are more important the more there is a need for recruitment. I have seen them be the part of the company that says "we are a team like a sports team, not a family," implying churn is OK. That is good for their productivity, particularly if their workload is on boarding and "culture" as well as recruiting.

<comment><USER17> Turnover is not always bad by any means. Often a company accumulates (bad hires, acquisition, good apples going stale) people who would be better off gone for everyone's sake.

There's good turnover and bad turnover.

<comment><USER18> But when turnover is high the good ones are much more likely to be leaving.

<comment><USER19> "Good" and "bad" mean different things at different times to the same company.

<comment><USER18> True, but how often is the guy producing awful, half working, over complicated code "good" for the company? That person is typically the last to leave. And we've all seen management reward the firefighter that is also the arsonist, they are never "good" for the company, but the company thinks they are.

</comment></comment></comment></comment></comment><comment><USER20> Many managers have the mindset that they can find replacements easily. If you don't do the job, there are 5 people lining up for this position. They don't realize the cost of turnover, partially because it is hard to quantify the cost. In the good old days, IBM and other blue chips would spend lots of money and send employees back to school and train them well. Nowadays, everyone is considered to be replaceable.

<comment><USER21> In my experience, this is not true in San Francisco. I've never worked anywhere in the bay area where engineers were thought of as easily replaceable. Everyone knows how hard it is to hire competent engineers around here. Even if people were lined up to replace a lost employee, just the interview process for hiring people is expensive as it takes multiple people out of their role to sit and interview someone for a day. When you lose someone, you end up with an empty position for at least a month, as even if you do hire someone right away they have to quit their current job and leave notice.

<comment><USER22> There could be a disconnect between hiring managers and HR and upper management. The hiring managers you know probably do understand the cost of replacing a lost employee and how hard it is to hire. The HR department that's actually in control of this, and of salaries, doesn't, or just doesn't care.

I have a theory that a lot of the terrible mismanagement we see with modern American corporations comes directly from HR. Didn't W. Edwards Deming say that companies would be better off just eliminating their HR departments altogether?

<comment><USER10> It would help considerably if every business school in the nation wasn't following the exact same idiotic playbook.

</comment></comment></comment></comment><comment> shawn-furyan If a 'mission that matters' is important enough to spend 3 paragraphs on, but salary only deserves a single dismissive paragraph, then why exactly do we never have enough teachers?

If people really had such a great preference for mission over compensation, then the public sector, and non-profits could be 'selective'. I mean, the public and non-profit sector usually don't even have to do bullshit PR vanity projects (cough __Microsoft-Google-Facebook-Amazon-Exxon-GE-BP __) to convince people that they are not evil on balance. Still, it 's the massively profitable companies that have the luxury of selectivity, not the ones with the best missions.

Like so much in 'management methodology' literature, there is such a willingness in this article to prefer anything (like small ungeneralizeable psychology studies[1]) that confirm clearly absurd magical beliefs (e.g. there are easy cheap scalable alternatives to compensation for retaining employees) that it is impossible to take the advice therein remotely seriously.

[1] that are being misinterpreted, to boot

[edit: added the footnote, grammar]

</comment><comment><USER23> I feel like the tighter your developers are with each other, the higher the impact of turnover. I personally know from experience that when my high performing friends move onto bigger and better things, they constantly encourage me to go with them or find something new myself. Entire teams can end up leaving through a sort of snowball effect.

</comment><comment><USER24> The article goes out of its way to mention 'regrettable employee turnover' which is a polite way to identify the group "people who left you wanted to stay" vs "people who left and you are happy with it." However, that requires that you also understand the impact of an employee on the organization.

There are people who have been "let go" because their manager had no idea what they actually did, and that caused a huge impact on the organization overall. There are people who have been "retained" because their manager felt they were key to the success of the group/project but didn't realize the toxic impact they were having on the organization.

These are the "inverted" cases where you really need to keep the person having high impact and manage out or move the person who is creating stress on the rest of the team.

</comment><comment><USER25> Not hard to see the obvious.

Look at Costco compared with Sam's Club. You can see the difference since Costco employees tend to stay longer there.

[https://hbr.org/2006/12/the-high-cost-of-low- wages](https://hbr.org/2006/12/the-high-cost-of-low-wages)

<comment><USER26> Another example in this vein is Henry Ford's $5 work day – wages dramatically above then-market rates prompted outrageous enthusiasm and loyalty from workers.

[http://www.henryford150.com/5-a-day/](http://www.henryford150.com/5-a-day/)

<comment><USER27> There's a lot more to it than that.

>The $5-a-day rate was about half pay and half bonus. The bonus came with character requirements and was enforced by the Socialization Organization. This was a committee that would visit the employees' homes to ensure that they were doing things the "American way." They were supposed to avoid social ills such as gambling and drinking. They were to learn English, and many (primarily the recent immigrants) had to attend classes to become "Americanized." Women were not eligible for the bonus unless they were single and supporting the family. Also, men were not eligible if their wives worked outside the home.

[http://www.forbes.com/sites/timworstall/2012/03/04/the- story...](http://www.forbes.com/sites/timworstall/2012/03/04/the-story-of- henry-fords-5-a-day-wages-its-not-what-you-think/#3acd0e971c96)

<comment><USER26> I didn't know that – thanks for sharing!

</comment></comment></comment></comment><comment><USER28> This article missed the fact that the cost to the company in trying to keep the employees who will leave every year might be greater than the cost of losing them. For e.g., in the example given in the article, the company loses 1.57 million due to employee turnover. However, who knows how much the company might have to spend to keep those employees from leaving. The cost would be high because the effort spent on employee retention is spread over all employees, even those who won't leave. Hence, even a small expense per employee, might end up costing more than the cost of losing certain percent of them.

<comment><USER29> That's a valid point, that it could potentially be more expensive than it's worth. In other words, it is possible to spend too much on trying to make your employees happier.

I wasn't trying to argue that the optimal amount to spend on employee turnover is infinite, but I do think most companies dedicate less than the rational/optimal amount of effort on it.

<comment><USER28> I totally got your point. I am playing Devil's Advocate to those who are recommending going to the other extreme and spending enormous amount of money for employee retention, including a significant increase in per employee salary.

</comment></comment></comment><comment><USER30> While yes, it's important to quantify, I'm not sure the article is that actionable for most startups, or even businesses that don't have large HR departments. Most software development managers I know would just pull estimated values out of their ass, instead of actually creating a formal model for tracking things like "cost of onboarding and training".

It sure would be nice to have some case studies, perhaps? Has anyone worked at a place that tried to calculate required onboarding costs for high-skill, salaried positions? I've only ever seen places just create random budgets for online programs like Linda.com, but these programs never seemed relevant to the positions that, well, were the most significant to the company, to put it nicely.

I just suspect unless you had a quant in an HR department, this sort of thing just will never get calculated correctly.

<comment><USER31> I commented above, but I don't think you need to get this perfect. What you want is a baseline number, even if it is low. If that number is $X to replace this person (fully, including estimates of rampup time and lost productivity), and they want a raise of $Y, and $Y < $X, the rational employer will give the raise. Heck, the rational employer would give $X-1.

Now, is the world full of rational employers? Nope.

</comment></comment><comment><USER32> It's funny. The smart companies I know are all moving away from hiring full- time devs. They want a very small core team of highly skilled devs, all with relatively high equity, combined with tons of freelancers/consultants on a call-list.

By far the biggest cost to software companies is employee turnover because the second greatest cost is employee education and training. We've measured developer productivity in multiple ways and time to full productivity within any new team/project generally is 3-6 months. Average empployment time at any single company in the tech industry is now 18-24 months. It makes more sense to pay 3-4x for most work, rather than have to deal with HR, education, and retention overhead.

<comment><USER33> Do freelancers/consultants magically need no onboarding and become fully productive on day 1?

<comment><USER34> With freelancers you can just stop paying them after day 1 if they don't and try another. In some verticals of software development there is a ton of supply.

<comment><USER35> That tends to get you a reputation, which makes it harder to find more freelancers.

</comment></comment></comment></comment><comment><USER36> employee turnover is why enterprises rarely build any useful software and have to buy startups to more forward

projects or operations with fragmented continuity because of turnover contribute near zero additional value and existing value decays quickly over time - each time a role is replaced more knowledge is lost - to the point the project is permanently on life support

paying people more and more to stay isn't enough - you also have to remove all the oxygen stealing layers of bureaucracy to create a bearable working environment - but that isn't usually possible in an enterprise as everyone senior tries to avoid being responsible for anything which almost always leads to more management and compliance layers until someone soils the bed over cost

I take my hat off to Microsoft over the last couple of years - what those guys (Scott Guthrie?) have done with .NET, SQL etc. appears, from the outside, to have reversed that trend

</comment><comment><USER37> Years ago I left a great job that I loved working at a Fortune 200 company because I had to make a family-related move. The company I worked for also had a significant presence in the city I was moving to. My boss gave me a referral to someone there with the logic that I was already known to be a reliable contributor, and at the very least it would be lower risk for the company to move me there rather than hire a new unknown person.

I got several job offers in the new city including one from the same company. Problem was...the company was 20% lower than the best of my other offers! Apparently there was a company policy limiting how much of a raise could be given, so they straight-up couldn't compete. I got the distinct impression that I could have taken a job with another company, then come back 6-12 months later and gotten a much higher offer. Basically mandated turnover. Talk about an awful policy.

<comment><USER38> One place I worked couldn't possibly give me the pay rise I asked for, yet they are now using 1 and a half employees to do my job (one full time, one part time).

</comment></comment><comment><USER39> Managers, here me now.

1) Money is a factor because my job is difficult.

2) Up to date technology is important because I want to build interesting products.

As a developer, these are my motivations.

<comment><USER40> Money I'll give you, but the vast majority of software is not going to be "interesting" or progressive. There are tons of major corporations doing "boring" work.

<comment><USER41> Money works perfectly fine as compensation for boring work :)

</comment></comment></comment><comment><USER42> I wonder if taking such a view can be short-sighted. While it is true that employee turn-over can be costly, perhaps that is also one of the ingredients that make tech successful. The valuable employees that you hire have gained their skills at a number of other companies and the employees that have left are contributing to other companies. While this isn't on your balance sheet, it is contributing to the tech community as well. I wonder how you would go about quantifying this.

From my experiences, those in tech for the most part have come from the tech community and stayed in the tech community. Employee mobility is creates a mixture of ideas and also lets individuals to be trained in certain disciplines by those that are most capable at it. In return, companies get employees that were well trained by other companies thus increasing the value of tech companies as a whole. I wonder if this becomes a trend and companies try to close their borders tighter (somewhat reminiscent of U.S. politics right now, huh?) that companies will see short term gains, while the entire industry would suffer in the long run.

</comment><comment><USER43> The cost of not having employee turnover can be substantial also.

It would've been interesting to see this addressed. In some particularly bad cases, organizations atrophy and lose the ability to respond well.

</comment><comment><USER44> I've never heard of a manager being reprimanded for high turnover. I would guess that this metric has to bubble up to the level of investors' analytics to make a difference in management performance assessment. Perhaps Glassdoor sees a market for such a product. The stakes are high enough that it would move the needle at an organization like YC.

</comment><comment><USER45> > "Instead, focus on growth, impact, and care"

Since a lot of tech companies employ young talent (relative to other industries), this video by Simon Sinek on "Millennials in the Workplace" can be enlightening:

[https://www.youtube.com/watch?v=hER0Qp6QJNU](https://www.youtube.com/watch?v=hER0Qp6QJNU)

Forewarning, he goes off the deep end on a few points, but IMO the general ideas are valid.

<comment><USER46> I've seen this talk before, and he makes a ton of assertions mostly backed by often-repeated cliches rather than data (e.g. participation trophies). This is a really good talk I've seen posted in response to this very video before, so I'll post it again.

[https://www.youtube.com/watch?v=-HFwok9SlQQ](https://www.youtube.com/watch?v=-HFwok9SlQQ)

</comment></comment><comment><USER47> What is the cost to companies of letting demoralized employees stick around to wait for options/RSU/bonuses to vest? I'm in the process of leaving a company now where I've been watching this happen for the better part of two years, and I keep wondering how much more productive and successful we could have been if those people had been let go and filled with some new, motivated recruits.

</comment><comment><USER48> In my business I do try to minimise turnover for almost purely emotional/moral reasons. It's good to have a team that as close to friends as possible. The technical cost of staff turnover is minimal because systems and processes should be designed in a way that anyone can leave without impact to the business for obvious reasons (illness, relocation, family circumstances)

</comment><comment><USER49> In my studies of history, I'm finding this current thrust of individuals as stores of wealth over firms and nations to be quite interesting. Back in the colonial period, everything revolved around national wealth. The crown alone sanctioned and funded expeditions, chartered corporations, and fought wars.

Over the last few centuries, power gradually shifted to the firm, then to markets, and now finally to individuals. Used to be, you had to pick the right parents, pick the right industry, and hope the political winds don't shift against you to earn a decent, livable life.

Now, all you need is intelligence and mental fluidity to weather hardships. No longer is a job loss catastrophic. Just about anyone born in a Western nation can, if he decides to, gain an education and make his way up the social ladder.

This is completely unprecedented from a historical perspective. The ability of the not-well-off to earn and enjoy the benefits of education was far and away only the province of the extremely gifted, the John Rockefellers of the world. It's easier than ever for someone born dirt-poor to become a CEO or politician.

Soon the world will turn completely on merit. It'll be fascinating to watch the way our societies go next. Certainly affluence will continue to push out into the developing world. But how will modern Western societies evolve? Will we conquer aging and produce scions of unimaginable ability? Death is the ultimate limiter of the power of individuals.

<comment><USER50> >Now, all you need is intelligence and mental fluidity to weather hardships. No longer is a job loss catastrophic. Just about anyone born in a Western nation can, if he decides to, gain an education and make his way up the social ladder.

What Western nation do you live in?

Because in the Western nation I live in, both job loss _and_ education can be catastrophic for many people.

<comment><USER51> If it's catastrophic, you're probably not taking advantage of the resources available. I know many people who feel pigeon-holed or trapped simply because they are unaware of how insanely easy it is to drop what you're doing, go to school, and get hired elsewhere. There are so many resources and options out there if you're willing to weather the change. Most people are just too scared to consider it and they misinterpret that as a problem with the market itself.

<comment><USER52> Exactly! I switched careers by doing nothing more than studying in my local library, and then applying for jobs once I felt I was ready to interview.

<comment><USER53> Now imagine you work two jobs to pay for food and shelter, you don't have a car or a library within walking distance, you couldn't afford any education beyond high school, and employers are statistically much more likely to ignore your resume because your name sounds black.

<comment><USER51> I admit that this sort of individual is particularly hard hit. There are programs that can help with different aspects of that situation, but no guarantee all will work with enough synchronicity to facilitate a full college education. That said, people who have it that rough also have nothing to lose. That's exactly the sort of person who could tolerate temporary homelessness if it means a better future. If the baseline goal is to improve their financial station, they should be going after trade skills, not full college. Trade skills could get them a stable career, a car, and solid resume. After that, they can consider going further, but there is definitely a path.

<comment><USER53> Of course there's a path, but it's a very difficult, not at all guaranteed path. Compare this path to a guy with money in the bank, a college degree, a decent resume, and 60 hours of spare time a week saying "just study a little and start applying to jobs, anyone can do it", and you can see why this thread seems so condescending. And imagine saying "you've got nothing to lose" to someone like this with a kid. This isn't a contrived scenario, there's millions of people like this in America. You might say it's irresponsible to have kids in this situation, but it's not quite that simple.

There's no doubt that we live in a better world than the past, but I don't think it's helpful to spread this idea that anyone can succeed if they just try hard enough. That's the goal, not the reality, and it will never be the case that everyone has an equal chance to succeed.

<comment><USER54> Depends on the kid, the family and the market. Willing to move for the job? No? Why not? Willing to work in a related field until you can get into your first choice? Why not? Willing to switch jobs 3 times in the first 5 years? Why not?

Folks have unequal chances for sure. But a significant fraction of the differences are, what they're willing to do.

<comment><USER53> These questions are still from the perspective of someone with money, education, and options. Imagine you're talking to someone below the poverty line, not your friend with a comfortable but unsatisfying job.

> Willing to move for the job?

Sure, how? What if I have no money and no credit? You're asking me to come up with a down payment on an apartment, transportation to another city, some kind of rental van or moving service, and a landlord who will take someone like me.

> Willing to work in a related field until you can get into your first choice?

Related field? I can't get anything above a minimum wage job. My "first choice" would be literally any job with predictable pay and hours.

> Willing to switch jobs 3 times in the first 5 years?

I'm working three jobs right now so my family can eat.

Again, this is not a contrived example. Millions of people live like this.

<comment><USER54> My buddy from down south moved to Silicon Valley, with his wife and newborn baby. They camped in the State Park in a tent while he interviewed. It took moving, taking an entry-level job and doing whatever was asked for him to succeed.

<comment><USER53> That's great, but you're essentially describing the last steps of a successful transformation. How did he get the skills and experience to qualify for entry level jobs in Silicon Valley? How long was he interviewing, and how did he pay for food during this time? Did he have any savings or fallback plan in case he couldn't get a job? If so, how did he prepare that? How much did it cost to get his family to the valley, and where did that money come from?

<comment><USER54> No plan; no fallback; crummy $100 car; cheap gas at the time.

Its good to plan things; but sometimes the friction prevents action. That's all I'm getting at.

<comment><USER53> I really feel like you're ignoring the substance of most of my comments. Friction is often a factor for people who have the means to do this, but do you understand that many people don't have the means? At the absolute minimum, your friend needed several hundred dollars in the bank, and a resume that included more than high school and minimum wage jobs. I think you're taking this for granted, but it's nearly insurmountable for, again, millions of people in America.

</comment></comment></comment></comment></comment></comment></comment></comment></comment></comment></comment></comment></comment><comment><USER55> Some other perspectives:

\- Salary is VERY important for most engineers - most of us are making incomes where making a little more money might be important. That said, consider the incentives that drive the decision makers (managers) who decide on salaries. The managers who say "Yes we can keep these people but no we don't have to pay them more" are much more likely to succeed than the ones who say "I need more money for the same headcount". Unless you've put serious institutional capital in the bank in the form of previous success, you won't win this argument with higher management. (By the way, I agree with the general premise that turnover is really expensive and most companies, including their upper management, don't take it seriously).

\- I think that this is another example of the "Hard to measure, easy to measure" divide in otherwise scientific management that defines most companies today. It is easy to measure salary. In fact, you are usually required to report it in most accounting schemes. Measuring cost of employee acquisition is easy for some parts only. On-boarding and training costs can be relatively well quantified. But what about lost productivity? What about lost innovation? Trying to measure "what isn't there" has never been easy. Managers will make decisions based on the hard data at hand. There is almost never enough hard data to justify greatly increasing their salary, and most managers won't go out on a limb (lacking hard data) to try and justify this. I can't say I'd do differently in their situation...

</comment><comment><USER56> It depends on a lot of factors including but not limited to: age of company, industry, how much tribal knowledge this person possesses and estimated ramp time. As an example: a 2 year old tech company, an employee that's been around since inception and possesses a lot of quirks and random information in their head, it's going to cost the company a shit load of money.

<comment><USER57> That's a business documentation problem. No different than if they get hit by a bus.

</comment></comment><comment><USER58> The problem is that these costs don't explicitly show up anywhere or get improperly allocated. It's not like HR comes in and says to someone that has a P/L "we're allocating a whole bunch of expenses to you because of turnover"

</comment><comment><USER59> Notice the article starts by talking about the mythical "superstar" instead of the more common "sub-performer" or "redundancy". Employee turnover FUD is all over, when existing dysfunction is ignored. I interview and hire in 3 days. I run through tens (if not hundreds) of interviews and the commensurately large resume pool. 1-2 hours every day, is barely a chore for the ability to hire someone smart and interesting to work with day to day who has the skillset we need. Employee turnover is expensive in tech, but not replacing specialized workers that are no longer useful, is worse for both sides.

<comment><USER29> I agree completely with this. I was writing about turnover of high performing employees, which is crazy expensive. Turning over low performers is valuable and important for companies to do.

</comment></comment><comment><USER60> What are the ramifications if we learn that employee turnover is very cheap?

<comment><USER57> Lower wages

</comment></comment><comment><USER61> This is one of those areas that would be amazing for academic study, but I doubt any company that would tell an interesting story would allow it. I would love for someone who had started with studies of tribes with an oral tradition to go into a software company and study how they work. I get the feeling that several similarities will show through even in a company that expects good documentation.

<comment><USER62> Karen Ho went to Wall Street for her dissertation: [https://www.amazon.com/-/dp/0822345994](https://www.amazon.com/-/dp/0822345994)

Anthropologists don't commonly live in mud huts, that's just a prejudice.

<comment><USER61> > Anthropologists don't commonly live in mud huts, that's just a prejudice.

Where the heck did that come from. I'm well aware of cultural anthropology and have worked with a couple on academic grants. I just think those more familiar with oral tradition of tribes would have an amazing time in a software company.

Also, just for your information, not all tribes live in mud huts, that's just a prejudice.

<comment><USER62> The mud hut was intended as a sideswipe at the fairly large HN faction that believes that only the hard sciences are a worthwhile pursuit and that the arts and humanities are for penniless losers. Also, Nigel Barley's _Notes from a Mud Hut_. (Yes, now I realize how the previous comment can be misunderstood, sardonic groans don't translate into written text.)

<comment><USER61> I probably wouldn't have taken quite the offense if I wasn't actually typing this from a reservation in the US. My first vision of tribal is a bit different.

</comment></comment></comment></comment></comment><comment><USER63> > _When a capable person on your team wants a role bigger than her past > experience, do you give her a shot or do you simply hire someone with more > experience?_

This spoke to me the most as I've seen this happen at multiple places. lack of growth seems to be the most common reasons for employees leaving (apart from stagnating salaries) and that's something a company can easily invest in

</comment><comment><USER64> IDK. I've been at a few organizations where the cost of employee turnover almost certainly would have been negative.

</comment><comment><USER65> Reading this made me think - maybe the work to live / live to work personality divide isn't actually real. Maybe people are divided more into two categories of those who are pessimistic that work will help them achieve self- actualization, and those who are optimistic about achieving self-actualization at work, or perhaps have already found it at work.

Does a work-to-live kind of person become a live-to-work kind of person if his workplace is genuinely happy? Does he forgo attempting to find happiness at work because he doesn't have the expectation of finding it, thus being more likely to accept poor work conditions in exchange for higher salary?

Interesting questions.

</comment><comment><USER66> There should be some further study in this area. I'm skeptical of the quoted costs of replacing employees and missed productivity ie.. 213%. Not to mention replacing poor performers can often be a value gain not loss. About cost, we're talking managers' time - but maybe hiring is most valuable thing they can be spending time on, other than directly generating revenue.

<comment><USER29> I agree with you -- I wrote this with regrettable turnover in mind. Parting ways with a low performer is definitely a valuable thing to do!

<comment><USER66> I see now - we're talking only regrettable employee losses. Thanks.

</comment></comment></comment><comment><USER67> Estimate the floor for replacement cost based on the average recruiting fee for the title.

<comment><USER67> The ceiling will be significantly higher. But it's an interesting floor given that most employers know and hate paying for recruiters.

</comment></comment><comment><USER68> Hard to believe a graph when its author can't even type $13,000,000.

</comment><comment><USER69> TLDR; Losing an employee has cost of 1.5X to 2.1X of his/her annual compensation.

A surprise case study here should be Amazon which has turned this wisdom upside down on its head. There have been rumors of 40% to as much as 70% churn at Amazon and despite of that company thrives.

<comment><USER44> I have more than one data point about that. Amazon burns people out at a furious pace. It seems like long term survivors strike a balance between not caring and careful career management. People find a way to live in such systems, and until they face a crisis, like attracting people after their explosive growth phase, companies can hold on to bad practices for a long time.

</comment></comment><comment><USER70> Would love to post this internally so HR sees it, but I'm afraid to appear on their radar ;)

</comment><comment><USER71> Not a very informative article. The costs are high, so try to minimize turnover. It's simple.

<comment><USER72> I think you missed the forest for the trees - the author clearly states that a quantitative approach to understanding turnover is needed and that everyone knows "The costs are high, so try to minimize turnover. It's simple." but it's hard to take action on a qualitative indicator. He then presents what appears to be a reasonable equation to estimate how much turnover costs a company.

<comment><USER71> The "quantitative approach" here is hardly worth considering. Maybe I should write for Medium. I could just as easily throw a bunch of crap together and call it journalism and provide some random numbers and factors and call that an equation!

<comment><USER73> > Maybe I should write for Medium

Considering this is a medium opinion piece, which are essentially blogs, you very well could.</comment></comment></comment></comment>


Ask HN: Is it possible that FB and Google are sharing user data? - <AUTHOR>

Paging through my friend suggestions on Facebook today I saw many familiar faces. I corresponded with all of them on GMail but we never had contact on Facebook. We have no mutual friends, I've never looked at their profiles, I'm pretty sure some of them don't even know my real name so they couldn't have looked at mine. I never gave FB access to my GMail account so I'm struggling to understand how this could be. I realize that network analysis can sometimes be effective but this looks a little too good to be true.<p>Any ideas? <comment><USER2> It's also possible your contacts gave Facebook access to their contact list.

<comment><AUTHOR> Is this access offline? Because some of the friend suggestions are from pretty recent contacts. So if the access is not offline they'd have had to email me and only then give FB access.

</comment></comment><comment><USER3> I expect this is the case. Just yesterday I received an email at my gmail account that suggested I might know someone with whom I am already connected on Google+.

Perhaps Google is giving up on Google+, and trying to cut its losses by selling out to facebook.

I've been meaning to set up my own mail server for a while, specifically to avoid being tracked by Google. I guess I'll make that more of a priority.

</comment><comment><AUTHOR> Actually, I was being stupid. I just realized how they do it. The FB app has access to the contacts of every person who has me in their contact list. So basically without me ever giving them the info they know everyone I ever spoke to on the phone.

It's a brave new world.</comment>


'Frankenstein' Manuscript Shows the Evolution of Mary Shelley's Monster - <AUTHOR> https://www.smithsonianmag.com/smart-news/frankenstein-manuscript-shows-evolution-mary-shelleys-monster-180968240/?no-ist <comment><USER2> It's interesting how golems, Frankenstein monsters and robots have _always_ turned on their creators, in fiction at least.

Another early example:

[https://jerz.setonhill.edu/theater/rur-rossums-universal- rob...](https://jerz.setonhill.edu/theater/rur-rossums-universal-robots/)

 _> Robots of the world, you are ordered to exterminate the human race… Work must not cease!"_

And recently of course now we have the paperclip AI:

[https://wiki.lesswrong.com/wiki/Paperclip_maximizer](https://wiki.lesswrong.com/wiki/Paperclip_maximizer)

<comment><USER3> Exciting fiction thrives on conflict. It's more fun to read a book where everything goes wrong than one where everything goes right. Authors recognize that.

<comment><USER2> True. Yet this fairly rigid tradition may also affect real world AGI policies.

</comment></comment></comment><comment><USER4> I would love to read these, however, if they are only printing 1000 of them, I doubt I will be able to afford them. Is the text available online? I didn't see it after a quick read of the article.

<comment><USER5> I guess it isn't mentioned in the article.

[http://shelleygodwinarchive.org/contents/frankenstein/](http://shelleygodwinarchive.org/contents/frankenstein/)

<comment><USER4> Thank you! Now, I have some reading to do.

</comment></comment></comment><comment><USER3> A couple of books, first _The Man Who Wrote Frankenstein_ [1] and later _Shelley Unbound: Discovering Frankenstein 's True Creator_[2], argue that _Frankenstein_ was actually written by Mary Shelly's husband, Percy Shelly.

[1] - [https://www.amazon.com/Man-Who-Wrote- Frankenstein/dp/0943742...](https://www.amazon.com/Man-Who-Wrote- Frankenstein/dp/0943742145/)

[2] - [https://www.amazon.com/Shelley-Unbound-Discovering- Frankenst...](https://www.amazon.com/Shelley-Unbound-Discovering- Frankensteins-Creator/dp/1936239604/)

<comment><USER6> Do you mind explaining what the motivation might have been for that, as the books see it?

<comment><USER7> Taking just from the summary of the second link, apparently Shelley was involved with the Illuminati.</comment></comment></comment>


Apple's diversity chief leaving - <AUTHOR> http://www.businessinsider.com/apple-diversity-vp-denise-young-smith-comments-white-men-2017-11 <comment><USER2> Comments moved to [https://news.ycombinator.com/item?id=15724324](https://news.ycombinator.com/item?id=15724324).</comment>


Show HN: StudyDesign.io – Study Design and Sample Size Tools - <AUTHOR> https://www.studydesign.io/ <comment><AUTHOR> StudyDesign.io provides a single place where statistical calculations for the design of experiments, such as sample size calculations and subject randomization, can be performed.</comment>


Exploring the new .NET "dotnet" Command Line Interface - <AUTHOR> http://www.hanselman.com/blog/ExploringTheNewNETDotnetCommandLineInterfaceCLI.aspx <comment><USER2> I think there a lot of good ideas in this post and if Scott can make them happen .Net development will get a big shot in the arm. Things like native compilation and NuGet package generation are great but I think the biggest change is in the attitude of the Microsoft world. They are finally realizing that not everyone likes/needs a GUI and that some (lots of) folks are much more efficient with their existing workflows for things like Ruby & Python.

Now, if only I could shake the feeling of a license monster hiding right around the corner ready to bash my head in as soon as I make something useful. :/</comment>


Ask HN: Where is Paul Graham? - <AUTHOR> Where is Paul Graham these days? What does Paul do on a daily basis? Is he still working full time at YC? <comment><USER2> Maybe he has "called in rich".

</comment><comment><USER3> Don't have any inside knowledge, but I think he said on Twitter that he was taking an extended vacation in the UK, where he was born.</comment>


Show HN: Points – Summarize web pages into bullet points - <AUTHOR> http://pointsapp.co/

<comment><AUTHOR> Hello everyone, I am the creator of Points, which summarizes news articles and web pages into bullet points.

Any feedback would be much appreciated!

<comment><USER2> This is your fourth such post in 12 days:

[https://news.ycombinator.com/submitted?id=hughrjones](https://news.ycombinator.com/submitted?id=hughrjones)

It's getting a bit spammy.</comment></comment>