TANSTAAFL

Can it ever rise that high? Count with me (M stands for million).

• There are (will be) a bit over 20M bitcoins.

• There are roughly 9 000 000M dollars in M1 and M2 money supplies. But that is not all, there are other currencies like euro, pound, yen or yuan. Let’s assume there is about 30 000 000M of dollars (or equivalent) in the whole world.

If bitcoins capture just 1% of current money market, each bitcoin will be worth 30 000 000/20*1% = 15 000 USD.

If bitcoin becomes mainstream it would capture more than 1%. Then we may be looking on more than 100 000 USD per bitcoin. This is insane!

The joys of digital currency

Few weeks ago I wanted to write an optimistic article about bitcoins. I have been selling my own software for the past years and receiving money online has been a pain. I had to and still have to trust several banks and companies and each one of them takes a cut. PayPal even holds me liable if someone uses a stolen credit card to buy a license for my software.

Digital currency removes a lot of that pain and I would rejoice if there were a way to get rid of all these middle-men that do not add any value.

Bitcoin promises a lot in this regard. A distributed system, not controlled by banks or governments. Double-spending protection. No fake credit cards. Direct transactions.

But then there is this one downside – the limited supply and the inherent and unavoidable deflation it causes.

The devil is in the details

What is the big deal with the deflation? The market will stabilize. Do not worry about it. That is the kind of talk you’ll hear on the bitcoin forum. The few, who raise concerns about the future of bitcoins are not welcome. People there like the deflation and they want it to continue.

So, why is this a problem?

Because it turns bitcoins from a digital currency into an investment commodity. The goal of digital currency is to be used as a currency. Gold is not used as a currency, it is bought and sold in order to make money.

Digital gold is useless to me. Normal people do not pay with gold, they invest in gold. I want digital currency. I want it be used without thinking whether it will be better to wait 2 days before spending a coin or not.

What is sustaining bitcoins now?

It is the marketing hype. It is the promise of astronomical profits. 1 bitcoin > 10 000 dollars, remember? Each time an article about bitcoins appears, new people learn about it, do the math and some of them are lured in by the vision of profits. This is a bubble, because:

Seller’s perspective

I have been accepting bitcoins as payment for my software for some time. Not a single person showed interest. Not a single visit from the bitcoin website (where there is a list of sellers accepting bitcoins) either. There are no buyers there, because:

Buyer’s perspective

You have just installed the bitcoin purse. You have no bitcoins. The software eats your computer resources and you still have 0 bitcoins. Mining does not work – ordinary person has slim chance to mine a bitcoin. You get bored and turn the software off.

You find a store that accepts bitcoins. Should you purchase a bitcoin just to be able to pay with it in that store, which also accepts dollars? Why bother?

Where does this leaves us?

No incentive for buyers to use bitcoins, no incentive for sellers to accept bitcoins. All the good things are shadowed by the terrible deflation that lures in the wrong kind of people – the investors looking to make (real) money.

A tiny detail (limited supply) rendered bitcoin unusable as a currency. Makes me sad.

I want bitcoin 2.0

The concept of digital currency is still incredibly attractive to me. I still accept bitcoins on my web, but I do not expect anyone to actually use them to pay. By doing this, I am validating investments of other people in bitcoins for free (despite owning none). Why? Because I believe that the world needs to know about digital currency and break free from the rule of banks and paypal-like organizations.

But I am ready for the change. As soon as an alternative to bitcoin appears and it solves the deflation problem, I will switch my support immediately. Who’s with me?

When I logged in to my AdSense account today, I could not believe my eyes: “AdSense for Domains – Get Started”. Is this some kind of joke? Apparently not.

Why am I so mad about it? It is because I like Google. And it hurts when someone or something you fancy turns to the dark side.

What is domain squatting?

There is no doubt you have visited a domain owned by a squatter before. Yet you may not be aware of it. They look like a normal low quality web sites. There are links with interesting anchor text, but all of them are actually ads.

Domain squatters register lots of domains and put useless (ad-overloaded) content (=spam) on these domains.

Domain squatters are interested in these types of domains:

• typo-domains – similar to an established site (hohhle.com instead of the real google.com),
• different top level domains – icofx.com instead of the real icofx.ro,
• expired domains – squatters will buy any expired domain,
• any short domains at all.

Google’s reaction

Until recently Google AdSense terms explicitly disallowed its use on web sites without content or on websites without any valuable content – the so called MFA (Made For AdSense) websites.

Now, with AdSense for Domains, Google has changed the rules of the game. They want to reward the spammers. It is no longer needed to actually contribute to the web to make some money with Google AdSense. You’ll actually get paid to make the web a worse place to navigate.

From the money perspective, this makes perfect sense. Domain squatting is here and it will be here for a while, so why not make some money off it? There are no legal obstacles, but there are moral ones. Each company should act consistently. When you simultaneously say that spam is bad and spam is good, you’ll lost trust. Has the economic crisis affected Google so much that they had to abandon their principles in a so obvious way?

What can we do about it?

Well, I personally would have to adjust my opinion about Google if this service is not canceled in a foreseeable future.

Other than that…hmm…anyone interested in writing a Firefox extension that would warn users when they visit a squatter domain? And what about Opera and IE? Can they do it?

Some people say, there are no stupid questions, just stupid answers. I disagree. Some questions are stupid. Repetitive questions, questions with obvious answers, questions the questioned could not possibly know the answer to. When a person asks a stupid question, maybe they just want to interact and that’s OK. But what if a computer software asks a stupid question?

How to create stupid software?

It is really quite easy. Here are some pointers:

1. Assume that every user knows what you know. Ask them questions only a geek can answer.
2. Assume that users are idiots. Keep telling them the same things again and again.
3. Do you have an algorithm that not solve the problem? Add another one or two that do not quite work either, and let the user choose which of the non-working algorithm they use.
4. Let users jump through burning hoops – everyone needs exercise. If they fail near the end, let them repeat the whole course.
5. If you have a dialog box with settings, do not bother remembering what has the user chosen last time. Doing the same thing again and again calms the spirit.

Difference between smart and stupid software

In short: stupid software creates problems while smart software solves problems.

Granted, every software solves a problem, but it can also create them. If a user must go out there and study information unrelated to their problem, before they can use an application, that is a problem. If the software irritates the users and makes them feel stupid, it is a problem.

Smart software has reasonable defaults, with optional geek settings hidden behind small buttons. Smart application provides visual feedback and lets the user see the results of an operation and does not rely on users’ imagination. Smart software respects the user.

All developers are guilty

Including myself, many of my decisions have made my software more stupid. It is usually a symptom of not being balanced and overreacting to something. And it is so damn easy to slip.

A perfectionist would implement a feature with all the bells and whistles and ignoring the users, who just could not understand them.

A fearful person would warn the user via a message box just too often. “Look, you have chosen to load a saved game, but wouldn’t it be better to save your current game before (even if all your characters are unconscious and dying)?” (NWN2)

A lazy person does not have the will to implement a feature properly and instead copies a similar code from somewhere.

May the balance be with us…

- It won’t hurt, I promise.
- But you are invading my privacy!
- Not at all, it is just a probe, it is not like if I used my bare hand or such. This red light will tell me if there is something shitty inside your computer. That’s all.
- Should I take your word for it? What about source code to backup your claims? Your probe runs with administrator rights and it can do anything.
- I don’t think so.
- I do not want it!
- Well, then we’ll wait till you change your mind. Isn’t waiting fine when we already have your money?

The facts

Few days ago, the automatic updater in Vista notified me about new update being available. Because I know that keeping the system up-to-date is crucial when fighting viruses (this is especially true if you do not have a firewall in your modem), I have checked the update immediately. To my astonishment, all the other updates that were previously available for installation, were gone.

The only thing left was KB940510. I usually don’t do that, but this time I have checked its description: “…enable Vista to detect software that bypasses activation…”. So, nothing useful, just 3MB of junk that is going to search through my XXX files. Why is it called an update?

I thought that maybe the disappearance of the other updates was just a glitch, but I do not think so anymore. They have appeared right after I gave up and installed this useless update. Now I am officially probed. What a shame.

The moral

Still, things could be worse, but not much worse. This probe was disguised as an update, but at least the description was telling the truth (hopefully).

It also demonstrates that Microsoft takes the fight with pirates seriously and they will use any methods in enforcing their rights. Each action like this only lowers the user experience of the paying customers, because it shows to them that they do not really own their OS, they are just allowed to use it. If they behave.

In the end, what is the point? Pirates will find a way around it anyway.

It is my belief that the problem of software piracy can not be solved by technological means. It is a social problem and must be solved as such. I am a shareware author and there are cracks and serial number generators for my applications. It does not bother me (much), the people who choose to pay did so, because they found the applications useful and the price adequate. And that is the right way.

BTW, do you know about the (under development) Windows alternative? The ReactOS.