Electronic IOUs, The Future of Economics?

June 4th, 2009

Over the course of the economic meltdown, an idea has come to me, and though I have tried to not think too deeply about it, it has continued to come back to me again and again.  The idea is that there is something problematic about the very core of economics.  That the whole foundation of centrally controlled money is inherently flawed. Why? Because it is a limited resource.

There are many economic theories as to the purpose of money.  One is that it is a ‘medium of exchange’.  However, in order to acquire money, you must get it from someone who has it, or someone who issues it.  If you and your trading partners do not have it, you cannot easily exchange your goods with each other.

Consider the following situation.  A reasonably self-sufficient town is hit by economic hard times beyond their control.  Those seeking loans have a difficult, if not impossible time getting those loans.  Those with savings may have found the value of their savings substantially decreased.  Everyone is spending less.  The money supply shrinks.  The farmer finds that the toolmaker has no money to buy his fruit, and farmer has no money to buy the toolmaker’s parts.  Their goods retain their value, but since there is no medium of exchange, they must either resort to barter or don’t do the deal. It is easy to resort to barter if a deal can be made between the two parties, but if Joe wants nothing that Alice has, they cannot effectively barter.  What they CAN do is issue IOUs.  Alice can issue an IOU “backed by her honor” to Joe.

Herein lies the problem with IOUs, in order to be worth something, they need to be honored.  This is a problem that the internet can help solve.  A system on the internet can, publicly, track and maintain the state of everyone’s IOUs.  Not sure if you should accept an IOU from Jim?  Look him up and see how many IOUs he has issued, how many people have given him IOUs, and if he has refused any IOUs, along with timelines for his IOU activity and his IOU balance.

What is to stop someone from just issuing IOUs and not doing any work?  Well, that can be complex, but it starts with the knowledge that when someone dies, their IOUs are worth nothing.  Working backward from this, if Alice thinks she will not be paid back by Jim based on his IOU issue rate, age, IOU income rate, outstanding IOUs and personal history, then she might not want to accept one of his IOUs.

Balance Computation

The system would ‘work through the IOU’ graph to remove all unnecessary IOUs from the system.  For example, If Tom owed Jim and Jim owed Alice and Alice owed Tom one IOU, then those amounts would be cancelled out and removed from the system.

References:

First Time Blu-Ray PC Build

April 10th, 2009

After having finally bought a HDTV, my next task was to figure out what would be my first Blu-Ray source.  This question turned out to be more difficult than selecting the TV.  I was initially leaning toward getting a PS3, since it did have some of the things I wanted in addition to blu-ray playback (web browsing with flash for one).  However, it didn’t really support much more in terms of streaming video and other functionality aside from games, of course.

I then decided to see how much a PC would cost to build that could play blu-ray.  After some research, I figured I could put one together for about the same price as a PS3, around $400. I already had a 400GB hard drive, and a copy of windows vista, so that trimmed a bit off the price, but it’s still a good deal considering that it can do so much more than a PS3.

Orginal Estimates:

  • Motherboard ($76)
  • CPU ($71)
  • 4GB ram ($45)
  • case+350W PS ($30)
  • blu ray player ($135)
  • wireless keyboard + mouse ($30)

Total: $387

I ordered the motherboard, CPU, blu-ray player and RAM from amazon, and got the case from central computer.  As I waited for the items to arrive, I did some additional research on various options for a wireless keyboard and mouse.  It seemed the vast majority of them weren’t really designed for home theater use.  The one I did find (and was referenced in Ars Technica’s HTPC guide), was Gyration’s Wireless remote + keyboard combo.  The price was a bit more at around  $100, but after looking around, I decided I had to try it, so I quickly ordered it on amazon.

Surprisingly, what I thought was the gyration keyboard and remote was the first to arrive.  Upon opening it, I discovered that it was only a remote and no keyboard.  After calling PC Universe (the amazon store that sold it), I discovered that there was a product serial mixup and they didn’t carry that item.  The $100 price tag was for the remote only.  The keyboard + remote costs around $130.  So I figured what the heck and exchanged it for the correct item.  Little did I know that this was only the first in a line of problems that would plague this experience.

The rest of my components then arrived from amazon.  I had already purchased the ATX case from Central Computer, a local supplier.  As I begun to assemble, I realized that the motherboard was a micro-ATX motherboard, not an ATX motherboard!  Checking amazon, the board was clearly listed as an ATX board, but after checking some other internet sites, I saw that it was indeed a micro-ATX board, and that amazon had the wrong information on their product page.

After sighing heavily, I went to the local supplier to exchange my ATX case for a micro-ATX case.  The cheapest one they had was $85.  I knew I was not gonna get anything like the $30 deal I got on the ATX case, so I decided to get it.  I also saw a good deal in frys on a 1TB HDD, and I’ve always been one to buy a hard drive when it was on sale, so I got that too.

After that, the rest of the build proceeded smoothly, installation of Vista went fine.  HDMI port with sound through the motherboard worked fine with the sony TV.  The Gyration Keyboard and mouse worked like a charm.  The precision on the air mouse is not as high as a regular mouse, but it’s still pretty good.

Finally, to test, we checked out the movie 300 at the local blockbuster, only to find that it was a horrible movie to use to evaluate the quality of Blu-Ray playback, because it was shot in a deliberately grainy style.  A couple of days later, Cars arrived from netflix, and upon starting the movie, I immediately noticed a significant stutter, especially in the wide panning scenes.  It quickly became intolerable.  Tweaking the BIOS settings helped a little, but it was still very noticeable.  Using Cyberlink’s BD system analyzer revealed that the onboard video (nvidia 7100) was too slow for blu-ray playback, even though the motherboard manual clearly states that the board is capable of full 1080p blu-ray playback.  After another sigh, I did some research on video cards, and ran out and got a Diamond ATI HD 4350 with a HDMI port.  Cars looked great, no stutter, nice smooth pans, the works.  I spent a bit more than I had originally planned, but it was worth it, because now I have a video card that can also play WoW and many other games!

Final List:

Final Cost: $817

Lessons Learned:

  • Be vary careful about motherboards’ onboard video.  They may say they support blu-ray playback, when in reality, the quality may be poor.
  • Go with a separate video card unless you can find exactly the motherboard that you want.
  • Many video cards don’t have HDMI ports because they don’t have onboard audio.  Many video cards have DVI to HDMI adapters that don’t support audio, so make sure you either have a connection for audio (eg a separate receiver), or you get a card or adapter that allows you to send both video and audio to a HDMI port.
  • Don’t trust amazon’s catalog.  There were two errors in shopping for computer components at amazon: (1) wrong motherboard and (2) wrong wireless keyboard/remote.  For mainstream products, I’m sure amazon is fine, but for computer components, I’d be more inclined to buy them locally or at a different supplier.

Links:

science of board games

March 10th, 2009

We have lately been working on a set of Twilight Imperium mod rules.  Some of us think that the ’stock’ twilight imperium is not that fun, and it takes too long.  Consequently, our mission is:

  • To make twilight imperium more interesting to play
  • To make the game shorter

As such, we pondered different game mechanics from other games (both other board games and computer games).  Since there is a bit of the ‘puerto rico’ flavor in TI anyway, we took that a step further.  There is also a debate amongst us about whether combat should be central to the game.  Should it be possible to take a ‘non-military’ path to victory?  I say yes, because it creates more strategic options for the player.

Throughout this process, we’ve been researching, simulating and playtesting different mechanics.  I’ve come across another interesting site that analyzes board game mechanics: http://www.scienceofboardgames.com/

-Tom

A Better Company Organization (part 2)

September 22nd, 2008

What follows are some more thoughts on an article I wrote a little while ago.

Ever notice how some companies start losing employees after their stock price tops off? This was definitely more true in the dot com days, less so now. However, the point remains the same. If an employee has a really good idea (which may or may not be in the company’s area of expertise), what would the employee gain by giving his idea to the company? He would lose the monetary compensation that he would have otherwise gained, and a good amount of recognition, which would probably go to the ‘head’ of the company instead.

It seems that the employee would more likely set out on his own to create his own company, in this way, he would have more freedom (to succeed or fail), and more incentive to work hard since it is his name and financial future that is on the line.

However, there are many things that need to be ‘re-invented’ when someone leaves to form a new company. Why not structure a company in such a way as to have all (or most) of the positive aspects, and none (or little) of the negative ones? As described before, a company could offer its employees several compensation packages: (1) time-based, (2) project based, or (3) cashflow based.

An additional feature could be that the employee could elect to not collect his company ‘profits’ as cash compensation, but rather retain them within the company for usage toward future company projects (thereby avoiding getting taxed prematurely, as would also happen if the employee set out on his own).

Is management overhead a problem? If rentacoder.com (and other sites) work, then why can’t they work for this type of application? If anything, it would help to more formally and thoroughly investigate the ‘cost-benefit’ for a particular project before going too deep in the implementation.

(reposted from old blog.  First posted May 21, 2008)

The Rise Of ‘On-Demand’ Manufacturing

September 22nd, 2008

The days have come when you can design something and get it manufactured without any factories…

the story comes from wired:
http://www.wired.com/techbiz/it/magazine/16-04/bz_instapreneur

Some sites referenced in the article:

http://www.zazzle.com/
http://www.ponoko.com/
http://styleshake.com
http://www.spreadshirt.com

and of course, the original…

http://www.cafepress.com/

(resposted from old blog.  First posted March 26, 2008)

A Better Way To Organize A Company?

September 22nd, 2008

After reading Paul Graham’s article, “You Weren’t Meant to Have a Boss”, I decided to write about an idea I’ve had for a while. The basic idea has been illustrated in some form on some sites like rentacoder.com. The basic idea is to structure a company in such a way that all members have a choice in how they want to be compensated for their work (monetary compensation of course).

Background (What’s wrong with the typical corporate structure)

In my experience, two main things motivate people to work hard:

  1. Money
  2. Doing stuff you like

When someone has one or the other, then they will tend to work moderately hard. But when they have both, then will work extra hard! In the typical corporate structure, decisions are generally handed down from the upper management, especially financial decisions. An employee’s idea that can potentially save the company millions of dollars will generally not net the employee a corresponding increase in salary, even if it does manage to make it to upper management and get implemented. As a result, a typical corporate structure is sub-optimal in satisfying both points listed above.

Solution

A company should offer several forms of compensation to motivate its employees:

  1. Salary (pay per hour of work)
  2. Project-based compensation
  3. Cashflow-based compensation

An employee would start off with a salary. This would allow the employee to gain a feel for how the company works and take the time to review projects and opportunities on which he may be interested in working. After a while, he may choose to take a pay cut in exchange for more free time (eg work 20 hours a week instead of 40, taking a corresponding reduction in pay). In his newly freed time, he may work on a project (the work handed out in this part of the system could be managed by a rentacoder.com like system), and get paid upon advancement of the project.

He may also embark upon a new project (or an addition to an existing project) which will generate additional cashflow for the company. This involves the highest risk, of course, and there is no guarantee of success. In this case, the employee is launching his own ‘mini-company’ within the company. He may be the only owner or there maybe multiple owners, with resultant income divided according to a pre-arranged agreement.

In this way, the company is more like an aggregation of smaller companies, rather than one large company, however, many of the benefits of being within a company will be available to its employees (access to company resources, etc)

Given this flexibility, employees have an incentive to work hard (they make more money), and they can choose the projects they want. They may even embark on a completely new project not within the company’s core business (though it would be much harder because of the lack of expertise in this new area). The employee would not have to fear (as much) about someone stealing the idea, because the employees in the company would be subject to a certain code of conduct, and thus they could more freely share ideas with each other.

(reposted from old blog, first posted March 20, 2008)