MasterCard Enables Fraud

Yes, the headline is clickbait. However, it is also accurate.

So I had some fraudulent charges on my MasterCard back in June. That did not unduly alarm me. I knew I needed to call my card issuer and disput the charges. I did so and they reversed them, cancelled the card, and issued a new one. All was well with the world. This is what should happen, after all. Alas….

TL;DR: Cancelling a card and getting a replacement after a fraudulent doesn’t necessarily stop the fraudulent charges due to some fuckwit at MasterCard thinking that “force billing” (allowing a merchant to obtain the new card number) is a good idea. My conclusion: “force billing” should be illegal.

Continue reading “MasterCard Enables Fraud”

Leap Second on Dec 31. Sigh.

Yet again, we have a leap second being added to UTC to further complicate everyone’s lives. Well, that might be overstating it, but it sure complicates the lives of server and network administrators, among others. The notion is that leap seconds are required to keep UTC in sync with Earth’s rotation and to prevent our clocks eventually being so far out of sync that solar noon will be at midnight. That notion is wrongheaded in the extreme, though.We would simply use some adjustment to get from UTC to local time once it started getting far enough out of sync. Local time would still continue to be approximately related to mean solar time. Continue reading “Leap Second on Dec 31. Sigh.”

The Greek Crisis, Money, and, Bitcoin

Over the past week or two, there has been a nontrivial amount of commentary on Bitcoin and Greece. Many commenters seem to think it is a prime opportunity for Bitcoin to go mainstream, or even go as far as being adopted as an official Greek currency. Others are much more skeptical, or downright derisive of the idea. I’ve discussed Bitcoin before (here, here, and here for instance). If you’ve read those posts, you’ll have a fair idea where I’m going to fall on this particular issue. Continue reading “The Greek Crisis, Money, and, Bitcoin”

Bitcoins and Currency

Much has been made of Bitcoins and other so-called digital cryptocurrencies. I remember how, in the early days, Bitcoin was supposed to be the cure for all the woes of modern fiat currencies and the central banking system. Even at the time, I failed to see the logic in that claim. I should mention that I have profitted some from Bitcoins, mostly by the fluke of having mined some when it was trivial to do so.

Before I get into Bitcoins, however, I should define a few terms. First, a fiat currency whose tokens have no real intrinsic value, or a negligible one. The only reason a fiat currency has value is because there is some authority that mandates its use for some process that is not optional. In other words, its value exists by fiat. The dollar (take your pick which one) has no intrinsic value – the coins and notes used to represent dollars and cents merely score keeping tokens made of base metals or paper or what have you. Furthermore, most of the dollars that circulate never actually physically exist in this day of digital transactions.

Central banks, on the other hand, are more complicated and simple at the same time. Wikipedia has a reasonable write-up on central banks over here. It’s easy to get bogged down in the details, though. Roughly, the central bank usually oversees the operation of commercial banks, manages interest rates (whatever that means, really), and often is responsible for producing the national currency.

Neither fiat currency nor central banks are problematic on their own, regardless what many fear mongers would have you believe. A fiat currency is arguably better than a commodity currency (gold, silver, copper, leaves, etc.) as long as there are sensible controls on how much is circulating. Central banks serve an important mediation role between commercial banks and also as a banker for the government.

Where the problem comes in is fractional reserve banking. I do not use the term “lending” because you cannot lend what you do not have. Basically, the fractional reserve system is an institutionalized fraud which allows commercial banks to “lend” money they do not have so long as they have a sufficient reserve level. This has the side effect of multiplying the money supply well beyond the amount put in circulation by the central bank. This sounds wonderful – more money is good, right? Wrong. For a good description of what is wrong with this system, head on over to Positive Money. Their take is UK centric but their illustration of the problem applies everywhere.

The practical upshot of the current money system is that without continual inflation, the economy will completely fall over dead because there will not be enough money to pay the interest on loans and therefore borrowers will default. As borrowers default, eventually the money supply starts shrinking making it harder and harder for the remaining borrowers to pay their obligations. You end up with a downward spiral of defaults leading to reduced money supplies, deflation, hoarding, and other problematic situations. In other words, the economy becomes illiquid and stalls. By continually increasing the supply of money circulating, this default spiral can be staved off. Positive Money notes how this is problematic in the current system in which the commercial banks are chiefly responsible for the total money supply.

The problem with inflation, however, is that it is basically stealing from the future to pay for the present. The dollar I put in a safe today will be forth far less in real value when I take it out in thirty years. At an annual inflation rate of two percent, that dollar will lose nearly half its real value over thirty years. Put another way, what you could buy today for $1.00 will cost you $1.81 in thirty years if inflation stays constant at two percent. If you start playing around with the mathematics and plug in the underlying cost of interest owed to the commercial banks, the implications become frighteningly clear. The current system is not sustainable and it is amazing it has not totally collapsed previously.

Enter Bitcoin. The creators of Bitcoin looked at the current situation and observed that inflation is bad and that we clearly need a currency with some sort of built in hedge against inflation. What if we create a currency that has an absolute upper bound to the number of currency units that will ever be created and prevent any central agency from having any control of the system.

That particular notion would make perfect sense in a steady state economy. A steady state economy is one where economic activity is neither growing nor declining. This is, of course, the only economic state that is actually sustainable, but that’s not the point of this discussion.

In the real world, economic activity is growing, on average, and it will continue to do so as long as the population continues to increase and demand for “stuff” continues.  That means, if you have a fixed currency supply, there will always be more and more stuff being chased by the same number of currency units. As the level of activity increases, the average prices must decrease if the currency available does not also increase. In other words, this situation ultimately has deflation built into it. While this is not necessarily bad in itself, it does cause some behaviour that is less helpful. Hoarding currency becomes profitable as it becomes more valuable over time, which, in turn, further reduces the currency supply, leading to further deflation. In short, even without a shrinking money supply (such as in the case of the default cycle mentioned above), the economy will eventually become illiquid.

The situation just described is exactly the situation with Bitcoin. What the designers of Bitcoin have created is not a currency but a scarce commodity akin to gold or silver. The same reason we abandoned gold and silver as currency units makes Bitcoin unsuitable as a general purpose currency. However, like gold or silver, it is useful for single transactions at a specifc moment in time, and, potentially, as an inflation hedge.

In other words, while I do hold a small number of Bitcoins, I do not believe they should ever become a mainstream currency. That would be more deleterious to the overall economic health of the world than the current central bank based fractional reserve system of fiat currencies. And that is saying something because the current system is so horribly broken that its ultimate collapse is almost certainly looming large on the horizon.

Ring Road Deal

So it seems we finally have a deal for the southwest Calgary ring road. More specifically, a deal for the portion that crosses Tsuu T’ina land. Of course, we are years away from having an operational road, but this is the first actual progress in essentially half a century. No, “almost” deals do not count as progress. Now we have actual real progress. And now we can let the armchair quarterbacks and backseat drivers get on with the hand wringing about the cost and how our tax payer dollars are going to waste and so on. Since I feel like it, I’m going to take apart some of the arguments they will make.

First up, there are complaints about the cost. Yes, it is expensive. But consider the fact that the Tsuu T’ina own the land we want to use. (I’m sure there are some legal confusions involved there, but whatever confusion is there, they essentially own the land.) They were at least part of the land for some purpose and those uses will have to be relocated at some cost and inconvenience.

Some people are arguing that it is not reasonable for the members of the band to benefit financially from the arrangement or that the magnitude of the benefit is too high. That’s simple jealously at its root, I think. After all, who wouldn’t be jealous if his neighbor suddenly had several tens of thousands of dollars?

Let’s take the fact that it is the Tsuu T’ina out of the picture. Suppose the land in question crossed a big estate owned by you on which you operate dozens of rental complexes, provide services, and generally rely upon it for your livelihood. Would you still agree that you shouldn’t be paid for your land and for your inconvenience? Would you still agree that it is unreasonable to compensate your residents? Would you still agree that you should not gain materially by the transaction? Would you agree that you should not be allowed to negotiate the best possible deal for yourself? Exactly. If it’s reasonable for one landowner in the context, it’s reasonable for any landowner in the same context.

There is a reasonable argument to be made that the Tsuu T’ina themselves will benefit from the road and that, as a result, the compensation is too much. And that is true. They will benefit from the road. But that will not happen immediately. There will be much disruption as the road is constructed and longer yet before anything can be done to exploit the traffic. But even accepting the argument as reasonable, who benefits more from the road? Almost certainly the citizens of Calgary and other traffic passing through the region. The Tsuu T’ina do not have a large enough population that they need major roads to support it. Calgary does. The population differential is three orders of magnitude, after all. So is it not reasonable that those deriving the most benefit from the project pay for it? (Let’s leave aside the fact that it’s provincial money involved which means other Albertans are on the hook too. That’s a whole other argument.)

I’ve read a few comments by ignoramuses who think that we should never, under any circumstances, direct any resources toward any First Nations simply due to the fact that they don’t bother using it to improve their houses. Well, first off, except for corruption, that’s not actually the case. And you see the same sort of corruption elsewhere. But let’s assume it isn’t corruption. Could it simply be that the people themselves value different things than we do? Perhaps they value common meeting areas or other things? Or, perhaps they have had a significant infrastructure debt inherited from previous years and it has turned into a money pit? Whatever the situation, none of it justifies denying a deal simply because it might benefit the people directly. Flip it on its head. What if they wanted something from us? We would think it perfectly reasonable that we benefit from a deal with them, right, especially if the benefit to us was relatively minimal?

Now, we haven’t seen the full details of the agreement yet. That is supposed to be released tomorrow. Until then, there is no way to accurately judge if it is fair or not. My first reaction is that it likely is fair, or at the very least, the very best deal that could be negotiated in the absence of the ability to expropriate (which applies to ordinary land owners but not First Nations. I’m not entirely certain I agree that expropriation is a reasonable power in the first place but that’s another argument altogether).

For the moment, I’m pleased that decades of brangling over a road are likely done and we can get on with things.

Luca Wins Masterchef

I don’t generally care one way or the other who wins competition shows, even when I watch the shows. Masterchef turned out to be buck the trend this year. When it started way back, I really didn’t have any particular favourites. Indeed, I really didn’t care if I watche dit or not and, in fact, I didn’t watch a lot of the earlier episodes and didn’t particularly stress about missing an episode. But then, the show got interesting.

As with any show of the sort, some of the contestants were real characters. A few were in the “love to hate” category. Some were real nice folks. Others were just odd. But what’s more, the people developed over the course of the show. People improved as time passed. People changed. Some stagnated and washed out. Others improved continually. In particular, Luca really began to shine in the final weeks.

And Luca did not just shine in the kitchen. He shines as a human being. When fellow contestants found themselves short on ingredients during pressure tests or mystery box challenges, he cheerfully shared if he could. As he put it, he wanted to win based on skill, not an artificial handicap of the other contestants. Now that is a real classy, stand-up guy for you. And so, based on that, I was really rooting for him to win. Every week he was still in the competition put me that much more on the edge of my seat. And, finally, he made it to the final two. And then, after a tense nail-biter of a final, and editing and dialogue well calculated to keep you in suspense, the final announcement that the winner of this year’s Masterchef was Luca ellicited cheers.

So here’s to Luca, winner of Masterchef, and one all around stand-up guy!

WTF, CP?

Anyone who isn’t living under a rock knows that Calgary has experienced an unprecedented flood on both the Bow and Elbow rivers. While the water is down to manageable levels now and cleanup is proceeding at a staggering pace, the state of emergency persists and a large chunk of the downtown core is still without power, not to mention low lying areas outside the core.

In the wake of all this, at roughly 4:00 this morning, some genius at Canadian Pacific Railway thought it would be a good idea to run a loaded freight train across a bridge that is well over a century old (probably over 125 years). Ordinarily, this would not be a particularly dangerous thing but given the unprecedented flooding and the fact that the Bow river is still running very high, the logic of this decision totally escapes me. I suspect this is the sort of decision that controllers have gotten away with many times over the years with questionable structures surviving by pure fluke. Alas, that was not to be the case today. The bridge started to callapse as the train had mostly finished passing over the bridge. Clearly the bridge was not sound and from the descriptions of the failure, it sounds like one of the bridge piers was undermined and the weight and vibration of the train’s passage caused whatever was still holding the pier up to collapse. Of course, once that happened, the river flow would have ensured it continued to collapse.

So the question then becomes why did the city allow the bridge to be used? After all, it is within the city limits. Well, it turns out that the city has no authority over railroads at all. That’s right. Zero. None. The city cannot even enforce noise bylaws or bar trains from blocking intersections during rush hour. It further turns out that even the province can do nothing. Apparently railroads are only beholden to the federal government and its agencies. What that means is that the city had no authority or access to inspect any of the rail bridges or to bar the railroad from operating trains. Yet it turns out that within the city limits, the city is responsible for the safety and response to any problems caused by railroads.

So, not only is the city still dealing with the aftermath of an unprecedented flood, but it also has to deal with the aftermath of a bone headed decision by a flunky working for a private company over which the city has no authority whatsoever. Thanks to this #nenshinoun, the city has to divert resources from handling the flood cleanup to dealing with this secondary crisis.

It seems clear now that regulatory reform is absolutely required. Make railroads beholden to the same municipalities that other transportation companies are. Let the municipalities manage all infrastructure in their boundaries instead of everything except the railways. After all, municipalities are uniquely qualified to manage infrastructure in their geographic areas. Furthermore, allow the provincial transportation departments to enforce their regulations as well. No mroe of this incomplete oversight from the federal authorities who are either understaffed or simply not competent to the job.

Update 19:11. The bridge is actually 101 years old according to current news reports. It was also apparently inspected several times before the train was driven across it. It seems I was also correct in assuming that it was a failure at the bottom of a bridge pier, which, to be fair, there is no way they could have seen it in an inspection. However, since they apparently didn’t even know that the neighbouring bridge was not connected at the foundations, it is clear that they should not have been opening the bridge until they could inspect the foundations. After all, if you don’t even know what is connected together, how do you know the foundations of the bridge are still sound? Calgary was able to have some certainty about its bridges because they are anchored into actual bedrock. Any bridge not so anchored probably should be considered suspect after such a flood as we have had.

“Personal” Computing Long Term

It may be inconceivable to many people today, but the era of everybody having personal computers with massive capabilities sitting around mostly idle to read email or write a letter to grandma are numbered. The vast majority of people do not need a full blown totally independent computer. They don’t do anything remotely complex or out of the ordinary on it. Or, if they do, they don’t do it often enough to really warrant having such a resource intensive device.

As technology develops, it becomes clearer and clearer that most people just want to get their email, write their letters, and maybe balance their chequebooks. Very few people need that two dozen core monster with four ganged high power video cards connected to more screen real estate than Times Square. If you need it, you know it, and you likely know what you’re doing and what you’re going to pay for it. For the rest of the world for whom tablets or smartphones seem to be sufficient, any sit-down computing they do at a keyboard and monitor certainly does not need even the low powered computers currently available.

Now suppose that instead of every person having a desktop computer with monitor, keyboard, mouse, etc., plugged in and sucking up power, most people had, instead, a much lower power device more akin to the processing power in a high end smart phone attached to a reasonable sized screen, keyboard, and mouse. Even that, alone, reduces the power footprint noticeably and if you multiply that by hundreds of millions, you’re suddenly talking about real energy reduction.

Now suppose you take some of that energy reduction and budget that for larger centralized processing resources. Make those resources available on a usage basis to people who need something more than their TinyBox™ device occasionally, say to render an edit of Christmas at Uncle Fred’s, or whatever. Or maybe they need to store some files that are larger than the TinyBox™ can handle, or maybe they want to be able to access them from other TinyBox™ devices.

Sure, it sounds like we would rapidly get back to the same energy consumption we had before. However, once the installations reach a certain usage level, something magical happens. The actual required resources to service the needs of the users stops rising linearly and starts to look more like a logarithm. This is the so-called ecnomy of scale graph. The reason this works is that as the number of users increases, the likelihood of too many users needing resources at exactly the same time decreases. As a result, the total computing power required for all their computing needs tends to reduce. If the controller software further prioritizes particular types of work loads, the overall load can be spread around through off-peak time, thus reducing the overall peak further.

Of course, all of this will require a major paradigm shift from the users and it will require solid infrastructure from the providers of the centralized infrastructure. Additionally, it will likely only ever be viable in areas with high population density like city centres or highrises. Still, it will come as energy budgets become tighter. In fact, ultimately, the end result will likely be that any portable device one has will interface directly with the chosen centralized resources and even having a fixed display and keyboard installation will likely become much less common.

Yes, people, I know I have just described “the cloud”. While I don’t see how “the cloud” as implemented today is at all a good idea, ultimately, it will happen and it will have a net beneficial effect on the environment (so-called “emissions” – there’s more to an environmental footprint than just CO₂, people!) when it gets here.

 

Urban Planning for the Long Term

I recently had the opportunity to learn about some of the future plans for LRT expansion in Calgary. Ordinarily, that wouldn’t be anything to write home about. In this case, however, the city is seeking input on which route to take through the areas that were developed before rights of way were protected for future LRT development. Thus, we have the usual wrangling and nimby. Again, nothing spectactular there except for one thing. One of the proposed routes goes through a natural area while the other two disrupt existing urban development, notably two of the busiest streets in the city.

My original knee-jerk conclusion was that the natural area option (running along an existing heavy rail line) was the best because it didn’t disrupt existing traffic patterns on very busy roads. Roads, I might add, that I used to use regularly and, thus, I understand clearly the impact of reducing road capacity on travel on those roads.

After studying the situation for a while, however, I came to a very different conclusion. The natural area is simply too far from the actual development for people to bother using it. Proponents of the option are quick to say that feeder buses will solve that, but I live in an area that has only feeder service. It is so inconvenient that I choose to drive even when transit would be a better choice and I am more predisposed to taking transit than many. That means disrupting one of the busy roads is a better option. Of the two, it turns out that the busiest road (where most of the buses currently run) is the best option. After all, the buses run on that road for a reason.

Clearly reducing road capacity on a major arterial connection into the downtown core is problematic in the short term. Even with the traffic eliminated by the LRT, which should be substantial for it will replace a lot of bus traffic (well over 1000 per day according to the information I have, on a typical four lane urban street), there will still be a large volume of traffic on that road. Some will displace to neighboring roads which should also see a corresponding decrease as a result of the LRT so it may not be nearly so bad as it could be, especially if the remaining capacity of the road is designed sensibly (with appropriate turn bays). So, really, it’s probably not nearly so bad an impact as the knee-jerk assessment suggests.

There is, however, another important factor to consider. Once this line is built, it is built. It is unlikely that the resources will be available to relocate it. It will likely be in service in a century or two so long as the city remains. But what will the city look like more than a century in the future? Most likely, it will look very much like it does today with one notable difference. There will be a great deal less automobile traffic and a great deal more localized travel. The same factors that are influencing localization of services now will only intensify as automobiles become more and more expensive to operate as the resources to produce and power them become more expensive. For those who believe the electric vehicles will solve this problem, consider the expensive of producing batteries and also the required infrastructure to support charging them. And even if electric powered vehicles do extend the personal automobile horizon, it will, eventually, come. And, if by some miracle that horizon fails to materialize, would we not all benefit from less automobiles on the road through increased safety and reduced air and noise pollution?

So it seems that by planning for the ultimate future with very little automobile traffic within the urban area and building infrastructure with that in mind now, our future infrastructure costs can be reduced. Also, we can begin to encourage the change that will come eventually to happen sooner, and thus we begin to benefit from the change sooner. This does, however, require a paradigm shift in urban planning – a shift away from planning for automobile traffic and toward planning for pedestrians and non-automobile traffic.

To make a long story short (I know, too late!), I have recently come to the conclusion that we should simply not be bothering to accomodate personal automobile travel but, instead, focus heavily on mass transportation system and making it convenient for pedestrians and cyclists to travel where they need to. Unfortunately, due to existing economic realities, it is not practical to do so in many areas of the city and this is where we need a massive paradigm shift in the planning processes.