After Thursday, Comcast Will Pick Your Web Sites For You

The Federal Communication Commission will vote Thursday to eliminate regulations that stop an Internet service provider, such as Comcast, from slowing down your connection when you visit web sites, or use apps, that they don’t prefer. For example, if Comcast makes a deal with Apple to push iTunes, they can then throttle your data–that is, slow down your connection–to other music sites, such as Spotify. It would also be legal for someone like Comcast to give a web site like Fox News preferential treatment, so that if you accessed (say) CNN or the New York Times, you would have a slower connection.

Sweden has experimented with not enforcing net neutrality: you can read about their experience here:

Net Neutrality’s Holes in Europe May Offer Peek at Future in U.S.

The New, Improved Bitcoin (Now With Even Less Regulation)

It seems more and more firms are issuing custom currency to raise capital: think Bitcoin with even less regulation.

Is this a good idea for, well, anyone? Mt. Gox–at the time, the second largest Bitcoin exchange in the world–shut down in 2014 after losing over $400 million in customer assets. The name “Mt. Gox” is an abbreviation for “Magic: The Gathering Online Exchange”, and the site was initially launched to help players of the fantasy card game trade cards with each other. These cards can be pricey–one sought-after card, the Black Lotus, recently sold for $27,000–but managing a currency exchange is an entirely different matter, and the site’s rather spectacular failure should surprise no one.

These Initial Coin Offerings (I.C.Os) have even more potential for abuse, since they are not only unregulated, but designed by the firm’s own finance department. Even in a marketplace seemingly founded on conflicting interests–how much do you trust your broker?–that seems problematic.

My advice for the average investor? Join a discount brokerage, like the one with the cool baby, or the even-cooler Law And Order guy, and search their offerings for zero-commission mutual funds rated at four stars or better. Then, decide how much you can realistically save every month, and invest your age (as a percentage of the whole) in a low-risk fund (such as a bond index), and the rest in a higher-risk fund (a stock fund, or index fund). If you update the balance between low and high-risk funds each year, then over time you’ll invest in less riskier assets more suitable for retirement income.

But don’t take my word for it: Peter Lynch, the cofounder of Merrill-Lynch, tells his brokers “Never invest in any idea you can’t illustrate with a crayon.” Sage advice for a post-Great Recession world.

Initial Coin Offerings Horrify a Former S.E.C. Regulator

The Computer That Predicted the U.S. Would Win in Vietnam

The crucial factors were always the intentions of Hanoi, the will of the Viet Cong, the state of South Vietnamese politics, and the loyalties of the peasants. Not only were we deeply ignorant of these factors, but because they could never be reduced to charts and calculations, no serious effort was made to explore them.

Fair warning: the article doesn’t offer much evidence such a computer existed, but the cautionary message is still relevant. Scientific management from Taylor to Six Sigma to Lean emphasizes what can be reliably measured. This approach works best when the value drivers are easy to quantify, such as customer churn, and when the process itself has been largely standardized. Neither was true of the Vietnam War.

The Computer That Predicted the U.S. Would Win in Vietnam

Why We Will Continue to See Catastrophic Software Failures

This article does a good job summarizing why catastrophic software failures are inevitable given our current development practices. There’s an old engineering maxim that once a system becomes sufficiently complex, it will eventually fail no matter how much testing you do. This is why critical systems, such as medical equipment, are designed to “fail safe”.

Unfortunately, almost every application today depends on libraries developed by programmers who may be halfway across the world, which makes designing fail-safe software extremely challenging. Until we address this coordination problem, catastrophic failures like those mentioned in the article continue to be a real danger.

The Coming Software Apocalypse