The Internet of Torts

Rebecca Crootof at Balkinization has two interesting posts:

• Introducing the Internet of Torts, in which she describes "how IoT devices empower companies at the expense of consumers and how extant law shields industry from liability."
• Accountability for the Internet of Torts, in which she discusses "how new products liability law and fiduciary duties could be used to rectify this new power imbalance and ensure that IoT companies are held accountable for the harms they foreseeably cause.

Below the fold,some commentary on both.

The Blockchain Trilemma

The blockchain trilemma

In The economics of blockchains Markus K Brunnermeier and Joseph Abadi (BA) write:

much of the innovation in blockchain technology has been aimed at wresting power from centralised authorities or monopolies. Unfortunately, the blockchain community’s utopian vision of a decentralised world is not without substantial costs. In recent research, we point out a ‘blockchain trilemma’ – it is impossible for any ledger to fully satisfy the three properties shown in Figure 1 simultaneously (Abadi and Brunnermeier 2018). In particular, decentralisation has three main costs: waste of resources, scalability problems, and network externality inefficiencies.

Below the fold, some commentary.

Decentralized Web Summit 2018: Quick Takes

Last week I attended the main two days of the 2018 Decentralized Web Summit put on by the Internet Archive at the San Francisco Mint. I had many good conversations with interesting people, but it didn't change the overall view I've written about in the past. There were a lot of parallel sessions, so I only got a partial view, and the acoustics of the Mint are TERRIBLE for someone my age, so I may have missed parts even of the sessions I was in. Below the fold, some initial reactions.

Shitcoin And The Lightning Network

The Lightning Network is an overlay on the Bitcoin network, intended to remedy the fact that Bitcoin is unusable for actual transactions. Andreas Brekken, of shitcoin.com, tried installing, running and using a node. He describes his experience in four blog posts:

1. Can I compile and run a node?
2. We must first become the Lightning Network
3. Paying for goods and services
4. What happens when you close half of the Lightning Network?

Brekken's final TL;DR was “Operating the largest node on the Bitcoin Lightning Network has been educational, frustrating, fun, and at times terrifying. I look forward to trying it again once the technology matures.” Below the fold I look into some of the details.

Amazon's Margins Again

AMZN operating margins

I've been pointing out that economies of scale allow for the astonishing margins Amazon enjoys on S3, and the rest of AWS, for six years. Now, This is the Amazon everyone should have feared — and it has nothing to do with its retail business by Jason Del Rey and Rani Molla documents AWS' margins in this table.

Amazon’s $52.9 billion of revenue in the second quarter of the year came in a tad below what Wall Street analysts expected — and that doesn’t matter whatsoever.

That’s because the massive online retailer once again posted its largest quarterly profit in history — $2.5 billion for the quarter — on the back of two businesses that were afterthoughts just a few years ago: Amazon Web Services, its cloud computing unit, as well as its fast-growing advertising business.

Below the fold, I discuss one of the implications of these amazing margins.

DINO and IINO

One of the things that I, as an observer of the blockchain scene, find fascinating is how the various heists illuminate the deficiencies of actual, as opposed to the Platonic ideal, blockchain-based systems.

I've been writing for more than 4 years that, at scale, blockchains are DINO (Decentralized In Name Only) because irresistible economies of scale drive centralization. Now, a heist illuminates that, in practice, "smart contracts" such as those on the Ethereum blockchain (which is DINO) are also IINO (Immutable In Name Only). Follow me below the fold for the explanation.

School's out (meta)

Grandkids are sick, or didn't get into the camp their parents wanted, so blogging will be close to non-existent for a while. Sorry about that!