Optical Media Durability Update

Four years ago I posted Optical Media Durability and discovered:

Surprisingly, I'm getting good data from CD-Rs more than 14 years old, and from DVD-Rs nearly 12 years old. Your mileage may vary.

Three years ago I repeated the mind-numbing process of feeding 45 disks through the reader and verifying their checksums. Two years ago I did it again, and then again a year ago.

It is time again for this annual chore, and yet again this year every single MD5 was successfully verified. Below the fold, the details.

The Exchange You Can Trust

One of the many ironies about "decentralized, trustless" cryptocurrencies is that they are neither decentralized nor trustless. Since in practice you can neither buy nor sell real goods using them, you need to trust an exchange to convert fiat to cryptocurrency and vice versa. Exchanges range from those you definitely shouldn't trust, such as Binance, through somewhat less sketchy ones such as Kraken (now being investigated for sanctions busting) to Coinbase, which presents itself as a properly regulated, US based exchange that is totally trustworthy.

But recently cracks have been appearing in their façade of respectability, big enough that even the New York Times has noticed. The Humbling of Coinbase by David Yaffe-Bellany and Mike Isaac summarizes the situation:

Coinbase rose to prominence as one of the first major crypto companies, a gateway to the chaotic world of digital assets for amateur investors. But as it has grown from plucky start-up to publicly traded company, its status as an industry leader has been threatened by a series of missteps and a steep decline in the crypto market over the last six months.

Below the fold I probe into some of these cracks.

Helium

A major reason that cryptocurrencies have become such a problem is that mainstream journalists normally just regurgitate the hype they are fed by people Talking Their Book. Kevin Roose is a New York Times "technology columnist" who is infatuated with cryptocurrencies. Last March he wrote The Latecomer's Guide to Crypto, which was so bad that Molly White assembled a group of experts to perform a devastating fact-check. Roose responded by justifying "talking his book" in a since-deleted tweet:

Crypto is pretty experiential compared to traditional finance, and it's going to get harder for journalists to report on this stuff if they're prohibited from touching it at all (especially as more activity moves into token-gated Discords, DAOs with ownership requirements, etc.)

He conveniently ignores that conflict of interest policies prevent journalists owning cryptocurrencies, not experiencing them using the paper's money.

A month earlier Roose had published another masterpiece of credulity entitled Maybe There’s a Use for Crypto After All whose subhead was:

Helium, a wireless network powered by cryptocurrency, hints at the practical promise of decentralized services.

Below the fold I compare reality with Roose's naive boosterism.

Another Infinite Money Pump

Datafinnovation's 3AC, DCG & Amazing Coincidences is a long and complex investigation of one of the key elements of the recent "crypto collapse". Fortunately. at FT Alphaville Bryce Elder uses an analogy that helps explain the basic idea. Below the fold I try to explain Elder's explanation of Datafinnovation's investigation.

Regulating "Digital Assets"

I was asked to make a brief contribution to discussion of the President's Executive Order on Ensuring Responsible Development of Digital Assets, concentrating on the technological risks they involve over and above those of conventional financial assets. Below the fold is my contribution with links to the sources.

The Internet Archive's "Long Tail" Program

In 2018 I helped the Internet Archive get a two-year Mellon Foundation grant aimed at preserving the "long tail" of academic literature from small publishers, which is often at great risk of loss. In 2020 I wrote The Scholarly Record At The Internet Archive explaining the basic idea:

The project takes two opposite but synergistic approaches:

• Top-Down: Using the bibliographic metadata from sources like CrossRef to ask whether that article is in the Wayback Machine and, if it isn't trying to get it from the live Web. Then, if a copy exists, adding the metadata to an index.
• Bottom-up: Asking whether each of the PDFs in the Wayback Machine is an academic article, and if so extracting the bibliographic metadata and adding it to an index.

Below the fold I report on subsequent developments in this project.

Mining News

Source

In May I wrote Generally Accepted Accounting Principles, based on Paul Butler's The problem with bitcoin miners. Butler pointed out that mining company financials were based on depreciating their hardware in a straight line over five years, where in reality "The average time to become unprofitable sums up to less than 1.29 years". I summarized the problem:

In simple terms, this excess depreciation means that the company's real cost for creating income is much higher than they report, and thus their real profit as a continuing business is much less than they report, because they are not putting aside the money they will need to replace obsolete hardware.

This was written a couple of weeks after the Terra/Luna crash started on May 7^th, triggering the current "crypto winter", too early to see the effect on miners. Now, as the contagion spreads and successive cryptocurrency companies file for bankruptcy, we are starting to see the knock-on effects. Below the fold, a collection of news about mining.