Hello all, time for another short post in my non-blog (I’m not really blogging, remember?).

Earlier this month, the Freakonomics Radio had an episode about commitment devices. Commitment devices are one of my main interests in behavioral economics. In fact, there are quite a few examples I collected over the past few months in order to share on my blog (however, seeing how I’m not really blogging, I haven’t come around to it just yet!). I’m intrigued by commitment devices (or commitment contracts) and have a few nifty ideas for apps and web services that are based around the concept.

Anyway, you can (and should) listen to the episode on commitment devices here.

Just yesterday (Feb. 14) Planet Money had an episode on public goods. Public goods just happen to be what I’m writing my thesis on.  So, with two of my favorite economic podcasts reporting on two of my favorite subjects, I’d say I had a pretty good week, at least in media-consumption terms.

Now, how do these two complement each other? 
Well, over at Freakonomics, Dubner et al. discuss murder as the highest form of a commitment device. Then, Planet Money makes the point that autopsies are a public good and ponder whether the government should provide them. In other words, after Freakonomics is done with the poor soul, Planet Money would tell you the cause of death.

And they call economics the dismal science…

3D printing revolution

January 26, 2012

Just a few days ago I stumbled upon this TED talk:

 

and while I was already aware of 3D printing, there was something about this talk that captured my attention & imagination. As I see it, the key statement Lisa Harouni made in her talk is that with 3D printing the economies of scale disappear. You can make just one of something. That’s disruptive.

However, even though the printers themselves are becoming increasingly more affordable and are expected by many to be a house hold item in the not so distant future and as ubiquitous as standard desktop printers with their disappointing two dimensions, there’s still a key ingredient for success. I wouldn’t buy a 3D printer right now even if I had the money and space to spare. The reason is quite simple – I wouldn’t have anything to do with one. What exactly would I print? I’m not a designer and in order to print a part you need a physible – a digital plan for an object the printer can read.

A few months ago, with the passing of Steve Jobs, I watched a few documentaries about the early days of the personal computer. What Jobs and his nemesis IBM understood back in the early 80′s was that the mass adoption of personal computers does not depend solely on an affordable price or ease of use. They needed a killer application, a software that would make the computer a must have in the office and all in all a hot commodity. For the Apple II it was VisiCalc and Lotus 1-2-3 was IBM’s killer app. 20 something years on, the same held true for the iPhone. It is arguably the fanciest gadget the world has ever seen, but how much success would it have gotten if Apple didn’t open app development to 3rd parties?

The point I’m trying to make is that in order for the 3D printer to become a product consumed en mass it needs to offer many physibles. It’s hard to say right now whether the business model will be more like Apple’s walled garden or Android’s open sphere (or maybe both), but if 3D printers take off, I’m sure we’ll see “design stores” where professional studios and skilled individuals offer their designs for free or a fee (small or hefty, depends on the complexity and the size of the target audience). Just as you can hire freelance graphic designers to design a logo, you’ll be able to get freelancers to build a model to suit your needs. I even think that there will be “do-it-yourself no design or experience required” services that would allow novices to build physibles with a simple drag-and-drop interface, just as there are services online right now that let you build apps without any coding.

Design sales will also become another stream of revenue for companies. A week or so ago a small piece of plastic broke in the refrigerator at my parents’ house, causing one of the doors to open up spontaneously. Apparently, replacing that small piece of plastic would cost an outrageous $75 for the part alone. Just as printer makers make their money on the ink or toner cartridges, I suspect the refrigerator manufacturer sees some nice revenue from parts replacement. In a 3D printing future, that stream of revenues will become a completely passive one – no need for actual manufacturing, shipping, handling suppliers etc.

Take the two paragraphs above an put them together. What do you think you’ll get? That’s right, pirating. The same way some of us download movies or music that fell from a virtual truck on the internet, or get paid apps for free for our phones, pirated physibles will be available out there on the internet too. After all, even if the cutting of costs mentioned above would lead to a lower price for a design, many people wouldn’t want to pay $60, or maybe even $6 to download it.

After zealously telling all of this to those around me in the days since watching that TED talk, I saw this article yesterday:

Forget MP3s: Soon You’ll Download Your Sneakers From The Pirate Bay

Here’s a small taste:

As a renowned hub for trading files, The Pirate Bay is in a perfect position to be the go-to place for free physibles, which it can facilitate while making money from ads. “We’re thinking of temporarily renaming ourselves to The Product Bay,” the announcement jokes, but hopefully it’s half-serious.

Need I say more? :)

Update Jan 29: As one courteous commenter noted, there is already a quite extensive depository for physibles: http://www.thingiverse.com/ . Furthermore, it appears there are diverse methods for 3D printing, especially when it comes to the materials used for the creation of the objects. My best guess is that much like processes we’ve seen with other innovative technologies (e.g. video-cassettes in the 80′s and high capacity discs twenty years on) it will take some time for the industry to converge upon a standard. We shall have to wait and see!

Update Jan 31: DMCA takedown notes for physibles, which are then found on the pirate bay.

The end to Bitcoin?

October 19, 2011

Interesting piece on the Guardian about the demise of the crypto-currency, or at least its value.

The value of Bitcoins … has plummeted across exchanges – to a level where it costs more to “mine” them than they are worth.

…part of the problem seems to be precisely what economists remarked on when its value began to spike as more and more people piled in: the appreciation in value was a speculative bubble, caused by people hoarding the currency, rather than the start of a new (or parallel) economy.

Previous post about Bitcoin over here.

Passwords Prevented

September 12, 2011

A nice quick read by David Prague over at Scientific American: Passwords Prevented. Allow me to give you a taste:

I was astonished when my daughter told me that her school has instituted a new security initiative. Student passwords must now be at least eight characters long, must contain letters, numbers and punctuation, and may not incorporate any recognizable English word. And the password must be changed every 30 days.

Can you guess what this password is meant to lock down? The fifth-grade homework-downloading Web page.

 

Even though the claims the writer makes seem so trivial, often they are not implemented. I strongly believe in KISSing and periodically remind myself the words of Antoine de Saint-Exupéry :

A designer knows he has achieved perfection not when there is nothing left to add, but when there is nothing left to take away.

Something to think about for you UX guys.

Cheers,

Alon

 

What is Bitcoin?1. Bitcoin has been making some serious noise lately on the internet. I admit I haven’t spent a lot of time to meticulously examine it, but I will say that for the time being I am both intrigued and skeptical. And I’m not the only one.

2. The founder Satoshi Nakamoto is a mystery man, and to my best understanding no-one, including the people who run Bitcoin, have ever met (some question his existence). These same people try to portray a very simplified economic system. So simplified that one might wonder how much thought was really given to it, especially regarding the way it will evolve and grow. Someone made a comment (can’t find the source) that suggested computer science graduates shouldn’t pretend to know everything, including economics. From my experience with founders that lack a suitable background, I tend to agree. Economies evolve and develop. What may work now, won’t in the future. No economic system can be planned fully in advance.

3. Jason Calacanis recently wrote a post titled Bitcoin P2P Currency: The Most Dangerous Project We’ve Ever Seen (thanks for not sugar-coating it). Here’s what he had to say:

After month of research and discovery, we’ve learned the following:

1. Bitcoin is a technologically sound project.
2. Bitcoin is unstoppable without end-user prosecution.
3. Bitcoin is the most dangerous open-source project ever created.
4. Bitcoin may be the most dangerous technological project since the internet itself.
5. Bitcoin is a political statement by technotarians (technological libertarians).*
6. Bitcoins will change the world unless governments ban them with harsh penalties.

4. I got word on Calacanis’ post from boingboing. First comment there mentioned Flooz. As it happens,

“Flooz.com was a dot-com venture, now defunct, … the company attempted to establish a currency unique to Internet merchants…” (wikipedia)

And here’s the interesting part:

Evidence indicates the company was at least partly brought down by fraud. In 2001, Flooz.com was notified by the Federal Bureau of Investigation that a Russian organized crime syndicate was using Flooz and stolen credit card numbers as part of a money-laundering scheme, in which stolen credit cards were used to purchase currency and then redeemed. (wikipedia)

In other words, where there is money, there will be those that will try to abuse the system. If Botcoin’s main mechanism against fraud will be based around keeping BTC face value so low it won’t appeal to abusers, it will not appeal to the masses as well.

5. Either way, I’m sure we’ll hear a lot more about Bitcoin in the months to come. In the meanwhile, here’s Bitcon’s intro video:

And Jason Calacanis’ interview with Gavin Andresen (Bitcoin’s technical lead) and Amir Taaki (founder of BitcoinConsultancy.com) on This Week In Startups:

 

Update 9-11-11:
James Surowiecki about Bitcoin on MIT Technology Review (here).
And Krugman has a few words to say too.

First post

May 16, 2011

A few words of introduction.

 

T B D :)