Stellar & Ripple: Pretender to Bitcoin throne?

You might know that I am a board member and co-chairperson of CRYPSA, the Cryptocurrency Standards Association. (I write this Blog under a pen name). The organization is brand neutral. That is, we don’t endorse or favor one particular coin over another. Think of CRYPSA standards as the security paper onto which money is printed. The paper can be used for Dollars, Yen and Zlotties. If it prevents counterfeiting then any currency can benefit. Like security paper, the standards we create and the safe practices we promote apply equally to all cryptocurrencies.

But, as with any user network, recognition, adoption and gravitas count! It’s no secret that Bitcoin is the elephant in the room. It is by far the biggest, baddest and most reported new age coin by any yardstick.

ripple_by_Mo

Dollars & cents? Ripple Labs unit = XRP

But Bitcoin has a problem—at least that’s what fifty start up companies want us to believe. The code that validates transactions (also used to mine coins) is transaction bound and hampered by original design. Moreover, alt coin entrepreneurs make a persuasive case for new features that more fully exploit the block chain potential.

Wild Ducks may know of Litecoin, Feathercoin, Dogecoin and Mastercoin, but there are even newer coins attracting the eyes of the crypto and investment community. If you have your ear to the ground, the smart money seems to be betting on digital currency coined by Stellar and by Ripple Labs. The rival companies share an eclectic and storied founder and they are both headquartered in San Francisco.

The New York Observer offers an illustrated history and analysis of the two pretenders in the novel-like style of Wired Magazine. They call it The Race to Replace Bitcoin.

Wow! In my humble opinion, this is a great article! I will assume that you have perused it. Very little recap here—just a Wild Duck commentary and analysis…

Ripple-1Ripple and Stellar co-founder Jed McCaleb has a history. He founded eDonkey, a Napster-like service of the early p2p era and Mt. Gox, the big Bitcoin exchange that collapsed in a spectacular and still-mysterious failure. Another co-founder, Sam Yagan also survived eDonkey and OK Cupid. He is now CEO of dating behemoth, Match.com.

Stelar-1aI know some of the other players, but hadn’t realized that Ripple Labs was making waves (pun intended). McCaleb’s newer venture, Stellar, claims to represent more than just a coin. It is a monetary ecosystem that inter-operates across currencies and boundaries. (Isn’t that what Bitcoin does? It seems that I have a lot to learn)…

I have less programming expertise than these geniuses, and possible less cryptography expertise. But I can outdistance their collective chops on macro economics.

Wild Duck Analysis

It is exceedingly unlikely that any venture will create the next cryptocurrency by design, unless the new coin is directly tied to and sanctioned by a believable and uncontested legacy of Bitcoin prime. In effect, a new coin must be a fork of the original code or at least a proper heir with blood lines and public trust.

Ripple Labs and Stellar have a very bright team. I don’t doubt the need to improve on the Bitcoin protocol, perhaps even with a wholly new technical approach. But the string of failures in McCaleb’s background, the mystery surrounding the first 1.5 billion STRs, and the daffy distribution scheme with Facebook are almost deal killers. This needn’t be an epitaph. There is a path to righteousness…

Cryptocurrency is already hard for the public to understand and harder to accept. For this reason, an heir to Bitcoin needs five things to succeed:

  1. Direct ties to the ownership of all original BTC
  2. Sanctioned by top Bitcoin developers AND blessed by Satoshi in a signed email
  3. The coin must be ZERO growth. It must never fall prey to inflationary economics. It accommodates a growing base and users and transactions by slicing the pie thinner (or ‘mining’ from a capped pool)—never by creating coins out of thin air.
  4. Source code that is transparent, open and without proprietary interests.
  5. A unshakeable commitment to continued decentralization and p2p operation with no mandatory reporting of anything (identities, or anything about transaction beyond date, pseudo-anonymous wallet ID and amount). In short, there must be no authority and no requisite bookkeeping beyond the open and distributed block chain.

There you have it: Our unofficial CRYPSA manifesto of what it takes to dethrone Bitcoin. In short, a successful replacement must be no less than Bitcoin 2. It elevates Bitcoin to the status of emeritus, because it respects the equity of early adopters (and without watering down with ‘newly created shares’)—and it must provably disavow any potential for inflation or manipulation.

Ellery Davies is a founder and board member of CRYPSA. He is also chief editor at AWildDuck.com.

Complicated tax return? Thank TurboTax

Actually, there are two ways in which TurboTax complicates the process of filing your taxes. One is downright nefarious—and the other, just plain stupid.   Continue below cartoon…

Tax Complexity-1

♦ The Nefarious

It’s one thing for a company that builds a business on tax simplification to make their own product more complex. (That’s the topic of the next section, below). But, it’s a completely different animal when a company that helps taxpayers to navigate an unnecessarily complex tax code fakes a grassroots letter writing campaign to covertly lobby that same government to maintain complexity, maintain fees for filing, and even disguises their lobbying as a grassroots effort of everyday citizens.

Read about and weep. It is nothing less than a mob-inspired, profit strategy. This is not a faux pas. It is a stick-it-in your eye, anti-consumer behavior without precedent! Intuit sought to preserve their niche of simplifying your life by secretly pushing government to keep it complex and to require a knight-in-shining armor to unwinding the complexity.

♦ The Stupid & Greedy

Tax Complexity-2aThis year, TurboTax has effectively blocked prospective customers  from figuring out which TurboTax product suits their tax situation. Intuit has not only stripped TurboTax Deluxe of important filing returns. Their flagship product can no longer be used to electronically file Schedule D, for capital gains and losses; Schedule E, for rental real estate, royalties and distributions from partnerships; Schedule C, for profit and loss from a sole proprietorship business; or Schedule F, for farm income. This year, those who need to file a Schedule D or E must trade up to TurboTax Premier, while a Schedule C or F requires the even more expensive TurboTax Home & Business.

But wait! The highest end product sells for more than a hundred dollars. It is more suited to corporations, trusts and foundations. Don’t think that you need the many features of TurboTax Home & Business? No problem. Now, you can choose from a dozen filing form combinations. This not-quite à la carte approach virtually ensures that you will have no way of knowing which products to buy until after you prepare your taxes.

That decision can be blamed by on simple greed in the boardroom and a phalanx of idiots in the marketing department. WildDucks can Infer the rest from my letter to Intuit General Manager, Sasan Goodarzi.


Greetings, Mr. Goodarzi,

I don’t earn a lot, but I have my fingers in different things: Self employment income, dividends, royalties, K-1 trust loss, rental property, and deductions carried forward from past partnerships and business ventures.
I have used TurboTax Dexuxe + State since 1993. I want very much to continue using that product, even if the cost rises…

I wish that I had received your latest offer before purchasing my 2014 tax software.

  • Earlier this week, I walked into my local OfficeMax and was confronted with your new hyper-bifurcated product lineup. (A complex array of options. At least 3 times as many products as on your revised web site today!!).
  • I immediately realized that you were asking prospective customers to make a very complex purchase decision. I had no idea which product to buy.
  • I checked the comparison check list on the product display and discovered that the only way to ensure that I was covering all of my bases would be to purchase your most premium home and business product.

TurboTax DeluxeFor loyal users of TurboTax Deluxe, the cost jump is from $39 (discount price for with 1-state) to over $120. In my view, that’s outrageous.

And so I purchased HR Block Tax Deluxe 2014 + State for $22.49 after promo discount at Newegg.com.

I considered your previous offer of a one-time $25 rebate. For me, it seemed insulting. You were asking me to either make a VERY complex decision (one that I could only evaluate AFTER completing my tax returns), or pay $90 more and apply for a $25 rebate. What kind of offer is that? Not one that I would jump at.

TurboTax was once a premium product in a small field of competitors. Your newest offer is reasonable, but it is simply too late! My advice for next time: Simply raise the price, if you feel that the competitive marketplace can sustain the cost bump. For the past 20 years, the discount retail cost of TT deluxe + state (after coupons and store promo) has drifted downward from about $60 to $39. Sometimes, I can even get it for $29. It is reasonable to adjust the discounted cost upward to $49 or even $59 (equivalent MSRP = $84).

But instead, you chose a complex marketing option that mirrors the current problem with our tax code.  To fan the fire, news services are reporting that your company has secretly lobbied to maintain a complex tax code.

You are entitled to a price increase.  But you botched the execution. You lost a long time customer (and one who has purchased TurboTax for employees and partners).

~Ellery Davies
  Formerly, a faithful TurboTax customer

ISIS burns Jordanian Pilot. To what end?

Moa’ath al-Kasasbeh-01aThree days ago, ISIS released a video in which the Jordanian Pilot, Lt. Moa’ath al-Kasasbeh, was burned alive in a cage. The result? A blitz against ISIS positions and logistics with the fury of an enraged leopardess. Jordan and the US led coalition is getting sympathy and support from near and far—even from prospective allies with no former stake in this war.

Why do people commit atrocities on a deeply personal and individual level? Think about it before reading further.

Since you’re still reading, you will obviously learn my opinion:Actually, I just can’t figure it out…

I ‘get’ that some people/groups/governments/rebels want land, power, money, sex—or simply revenge on those they feel have brought suffering or dishonor to their people, their cause or their prophet. I also get that they commit atrocities in an attempt to achieve their goals. But, I cannot fathom why the really bad guys inevitably do things that are so grotesquely evil, inhumane and appalling that they bring unity and resolve to their enemies!

Referring to ISIS actions and tweets: “It is a PR stunt”. But PR serves a purpose, even if it is a twisted purpose or one hell-bent on religious fervor. I doubt that decapitations, burning a man alive, and kidnapping a young, female aid worker help the cause of ISIS, even among the angry, dispossessed youth that they routinely recruit.

charlie-hebdo-cover-603x8002Aymenn Jawad Al-Tamimi, fellow at the Middle East Forum and researcher at the IDC Herzliya academic institution, explains that the video is a “wholly new level of public advertisement of brutality” and that it is “designed to terrorize the outside world, especially the Arab states taking part in the US-led coalition.”

How can anyone be so distorted as to think that such disgraceful and abominable tactics achieve anything other than invigorating enemies and generating massive sympathy for the other side. More to the point, do they not realize that their families will be hunted down and killed, humiliated or otherwise brought to justice?

ISIS believes the US led coalition forces to be an infidel, a disciple of Satan or a rabid animal (metaphors that radical Islam invokes toward anyone who is free, living under democracy, has a brain or a conscience). But even if you believe these things, it makes no sense to back a dog (or Satan) into a corner and poke him with a stick—especially if your opponent has satellite reconnaissance, powerful weapons and growing community sympathy.

Related:

Piers Morgan describes his reaction to viewing the ISIS video of Jordanian Pilot, Moa’ath al-Kasasbeh, burned alive in a cage. He didn’t want to watch, but is glad that he did.

Canary Watch deduces federal gag orders

The US government and its courts routinely demand personal user information from email services, banks, phone companies and other online, telecommunications or financial services. These demands compel services to disclose details about email, phone calls and financial transactions. They also gain access to hordes of so called “metadata”, which can be just as personal as a user’s phone calls. It includes information about user relationships, locations, browser configuration and even search history. Many of these demands, such as the infamous National Security Letter stipulate that the service may not divulge that they were asked for the information in the first place. In fact, they can’t say anything about a de facto investigation!…

My friend, Michael, occasionally points out that skirting the law with Wink-Wink-Nod-Nod is still likely breaking the law. His point, of course, is that law is often based on intent. So with this in mind, what do you think about this clever reporting service?…

Canary WatchA service called, Canary Watch, lets online services like Verizon or Google send a continuous stream of data that repeatedly states “We are not currently compelled to turn over any data on our users”. Naturally, if the service suddenly refrains from sending the statement, a reasonable person can infer that the government is demanding personal information with the usual GAG order attached.

If you extrapolate this technique, a service like Verizon could continuously broadcast a massive list of usernames (or shorter hash codes representing individual users). These are the users who are not currently being investigated. Any change to the data stream would allow a 3rd party to infer and alert users who are the subject of an investigation.

With the launch of this service, Canary Watch wins the 2015 Wild Duck Privacy Award. This is the type of cleverness that we like! Why? Because it enhances transparency and helps everyone to control their own privacy, if they choose to do so.

Wild Duck Privacy Award

Further reading: Activists create website to track & reveal NSA, FBI info requests

Can Saudis say “Je Suis Charlie”?

Update: This article was written 2 weeks before the death of the Saudi leader

On Jan 23, (Friday morning, local time), Saudi King, Abdullah bin Abdulaziz al Saud, died. His half brother, Salman bin Abdul-Aziz Al Saud, ascended to the throne as expected. He promptly assured the international community that policies, alliances and contracts would continue as before.

Je Suis CharlieThe Saudi government is publicly standing with France in condemning the slaughter of editors and cartoonists at Charlie Hebdo, a satire magazine. They were gunned down in the name of defending the prophet’s honor.

Of course, the governments of Saudi Arabia, Tunisia and Iraq are waging war against extremist group Islamic State with expanding air and ground support from a US-led international coalition. Yet, I am sickened by the irony of their “outrage”.

saudi-arabia-domestic-violence-sThe Saudis have no compunctions in savagely beating Raif Badawi for the crime of promoting free speech and debate. They have no problem beating women who drive a car or who travel without a male relative. We must take stock of our affiliations. It’s time to run with those who share our ideals and who appreciate a common humanity. The Saudi royals are neither just, moral or humane.

The fact that so many in the west consider the Saudi kingdom to be moderate or “a friend” is both ironic and a travesty. These are barbarians with starkly warped ideals. Saudi Delegate at UNThey are as backward and ruthless as those who slaughtered the journalists at Charlie Hebdo in Paris. Both groups respond to free thought and debate with righteous violence.

It’s time for western governments and NGOs to recognize that the Saudis are no more evolved than the Ayatollahs in Iran or the Imams and Muftis who promote and export Sharia Law the word over.

Consider the relationship of China with the US and Canada. The Chinese are a major trading partner, but few would suggest that this partnership indicates a shared kinship of political ideology or compatible individual freedoms. China’s government may change some day, but for now, modernization is limited to their economy and with a slightly heightened awareness of environmental issues. Democratic process and Personal freedoms be damned.

Saudi FlagLike China, the Saudis are our temporary trading partner. We must not confuse trade or even military cooperation with friendship and we must constantly reevaluate the limits of our business and financial arrangements. Unlike China, Saudi Arabia bankrolls extremism and exports intolerant ideology that destabilizes the global community. They are no better than ISIL, Boka Haram or the most radical of Sharia-inspired zealots. The Saudi government is barely shy of being an enemy to every free democracy. I am not against constructive engagement. But we should also understand an ideological adversary and maintain a comfortable distance.

Suggested Reading:

Pet Peeve #4: Time zones are for locals

Have you ever made a list of pet peeves? I’m not referring to the behavioral quirks that couples develop over years of cohabitation. That’s part of every relationship and it is only addressed through give and take and a lot of patience. Rather, I refer to the little things that have become institutionalized all around us—and yet, we know that they are just plain idiotic. The problem is that they are too small to be picked up by the national news and too common to believe that they can be avoided.

Let’s say that you are driving along a road that comes to an end by forming a ‘T’ at the side of a much busier road. The cross street is busy, but it’s not divided. You plan to make a left turn after clearing a string of high-speed cars approaching from the right.

Conditions are good and there are no obstructions. There is no one coming from the left. Looking to the right, you can see a mile down the road. There are 4 cars speeding toward you, a long space and then a major throng of cars that will tie up the intersection for minutes. You get ready to drop the hammer as soon as that 4th car passes the intersection. You are patient, in a good mood and your car is well tuned.

Traffic Intersection

What’s the dumbest thing that the driver in car #4 could do? Does he have the power to ruin your day and raise your blood pressure while trying to be a nice guy? He sure does!

He can hesitate—slowing just enough to get honked by the parade behind him and just enough to close your window of opportunity. If you are in a hurry to get somewhere, he will ruin your morning faster than you can mime “Move your friggin’ tailpipe!!”. He is oblivious to the fact that his gesture of good will has backfired.

Cross street drivers who let up on the gas are one of my three pet peeves. But today, I was reminded of another minor irritation. From now on, I will call it “Pet Peeve #4”.

I have a good friend in Germany. He is a high tech entrepreneur and tends to move about the globe. His businesses are in Australia and New Zealand, and he spent a long part of the past year in Shanghai. I never know where he will be. But he is currently in Germany and he knows that I am in America.

Realizing that we need to discuss an important matter, he asks me if I will be available during my weekday mornings, between 9 and 11 AM my time. Noting that he has already contemplated the time difference, I check my calendar. “Sure. That works for me,” I tell him… “Why don’t you set the schedule? Any morning this week is good.” He commits to have a colleague figure out the final date.

Taj MahalMinutes later, I receive a Google Calendar link for my approval. It asks that our meeting be established on Wed 26 Nov 2014 from 21:30 to 22:00, India Standard Time. I was unprepared for the involuntary groan that arose from the pit of my stomach. Here, is an open letter to my buddy and the colleague who scheduled our conference to be held on India Time…

C’mon guys / gals… The Internet works on “Internet Time”, also known as UTC or GMT. It is effectively Earth time. It never changes with seasons, war, edict, accidents or daylight savings. It just moves forward as the universal heartbeat of the Internet.

clocksPlease don’t make me translate your Indian Standard Time. I will get it wrong. I always do.

And please don’t figure it out in “USA-Eastern Standard Time”.  Here in the US, politicians shift Daylight Savings dates, sometimes splitting it by local counties. In some areas, they change it by only 30 minutes for border towns. (Yes! We are that nuts).

So please: Just tell me the time in UTC. It is the only time that should ever be cited when dealing with anyone that you can’t reach with a personal handshake.

P.S. Don’t take insult when I post your suggested meeting time (and this sarcastic response) to A Wild Duck. Sure, you helped me to discover a new peeve—But you have also hit upon my funny bone!

Faithfully yours,
~Ellery

Bitcasa: Headed for the Abyss

I was an early Bitcasa supporter. I jumped on the bandwagon early and I blew my trumpet loud and far:  Bitcasa: Unlimited storage, version history & sync  (Feb 8, 2013)

bitcasa-sBut consider this shockingly short timeline:

• September 2011: Bitcoin co-founder, Tony Gauda, excites investors with a business model that supports an “Infinite Drive” service.

• Feb 2013: My first year is $49/year for “Infinite” storage. Throughout the year, there are numerous bugs with both uploads, downloads and on both web and PC client. Although the beta had ended, I chalked it up to a learning experience.

• Sept 2013: Bitcasa’s visionary co-founder and charismatic CEO, Tony Gauda, is eased out the door. He is reluctant to explain the reason for his sudden departure, even to his fans and email correspondents.

Listen closely to the first 2 minutes of this interview with Mr. Gauda, and tell me if Bitcasa has executed on plan. “The customer with 10 terabytes of video is ½ of 1%. But we love this type of customer… We don’t care how much data you have. We don’t meter it!”

But don’t blame Tony. Blame the directors, probably influenced by near sighted investors. Tony’s business model was solid. As often happens with visionary entrepreneurs, he was given the bum’s rush. He was shown the exit door practically before he even launched.

• Early 2014: Bitcasa announces a stunning price increase.  For newer users, costs increase 1200% (by twelve times). Early users like me see a staggering 2400% increase (from $49 year to $99 per month). Like many users, I am stunned. I am forced to revisit a history of gushing endorsement: Bitcasa bursts its bubble.

• Feb 2014: Bitcasa charges my credit card without authorization. The cost of my plan has risen from $49/year to $99/month. But in a gesture of magnanimity, the company offers to extend my subscription at my “current rate”  which they consider to be $99/yr (not really my current rate—but I was aware that my actual current rate was a one-time special).

I secure a written promise that my credit card data will not be retained and an explanation of how I can ensure that Bitcasa cannot retain that information. Again, throughout the 2nd subscription year, there are numerous bugs with both uploads, downloads and on both web and PC client. Nothing has improved.

• Nov 2014: The Infinite storage plan is retired (Whaa!?!! We are still in the midst of year #2). Can you imagine how this makes early adopters feel? We were duped into referring other users with incentives and offers related to our Infinite Drive plan.

Bitcasa (cartooned)Bitcasa requires users to migrate data into a new plan with only 5 weeks notice. But wait—there’s more. Let’s get personal…

a) Even though I am in the midst of my year, Bitcasa makes another unauthorized charge to my credit card (Again, and after promising that my card data had been deleted). The hat-in-hand excuse that I receive from the support staff is ludicrous. These schnooks ware fed a line from on high.

b) The migration fails miserably. I am a tiny client. I use only 638 MB, and yet none of my data—whether uploaded or mirrored—can be migrated to the new plan. I have wasted dozens of hours trying the Bitcasa tools and failing to get support. It simply doesn’t work.

c) Perhaps just as alarming, there has never been any progress on the numerous bugs with both uploads, downloads and on both web and PC client.

I could go on. But I think that the writing is on the wall. Fair warning. This one is headed for the abyss.

Oye, Bitcasa! Say it ain’t so! Even if you have contempt for your customers (I don’t think that you do), I doubt that you could have intentionally orchestrated a better demonstration of how to spit in the eye of testers, users, investors, and especially anyone giving their credit card to you in good faith.

Past thoughts on Bitcasa: The good, the bad and the ominous.
~Ellery