Depreciation

Source

More than three years ago, based on Paul Butler's The problem with bitcoin miners, I wrote Generally Accepted Accounting Principles. The TL;DR was that the economic life of Bitcoin mining rigs was estimated at 16 months, as Moore's law in a competitive ASIC market rapidly generated more power-efficient rigs. But the Bitcoin miners' accounts were using 5-year straight-line depreciation for their rigs, which was significantly increasing their nominal profits.

Below the fold I look at the same problem unfolding in the heart of the AI bubble.

The Gaslit Asset Class

James Grant invited me to address the annual conference of Grant's Interest Rate Observer. This was an intimidating prospect, the previous year's conference featured billionaires Scott Bessent and Bill Ackman. As usual, below the fold is the text of my talk, with the slides, links to the sources, and additional material in footnotes. Yellow background indicates textual slides.

Hard Disk Unexpectedly Not Dead

As I read Zak Killian's Expect HDD, SSD shortages as AI rewrites the rules of storage hierarchy — multiple companies announce price hikes, too I realized I had forgotten to write this year's version of my annual post on the Library of Congress' Desihning Storage Architectures meeting, which was back in March. So below the fold I discuss a few of the DSA talks, Killian's more recent post, and yet another development in DNA storage. The TL;DR is that the long-predicted death of hard disks is continuing to fail to materialize, and so is the equally long-predicted death of tape.

Luke 15:7

Source

The title of the post refers to the King James Version of the Bible:

I say unto you, that likewise joy shall be in heaven over one sinner that repenteth, more than over ninety and nine just persons, which need no repentance.

Luke 15:7

In the throes of 2008's Global Financial Crisis Satoshi Nakamoto published Bitcoin: A Peer-to-Peer Electronic Cash System. It inspired a large group of enthusiastic advocates who asserted that Bitcoin would possess the following attributes:

• It would be decentralized.
• It would be trustless.
• It would be censorship resistant.
• It would be securely encrypted.
• Users would be anonymous.
• Users could transact without intermediaries.
• Users could transact cheaply.

In short, it would enable users to escape the clutches of the TradFi (traditional finance) system that had so obviously failed. It has been obvious for many years that it doesn't, and in July there appeared a truly excellent mea culpa from a former advocate, Peter Ryan's Money by Vile Means. Below the fold I comment on it, and a couple of other posts describing how TradFi has obliterated Nakamoto's vision.

2025 Optical Media Durability Update

Seven 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.

Here are the subsequent annual updates:

• 2019
• 2020
• 2021
• 2022
• 2023
• 2024

It is time once again for the mind-numbing process of feeding 45 disks through the readers to verify their checksums, and yet again this year every single MD5 was successfully verified. Below the fold, the details.

The Drugs Are Taking Hold

cyclonebill CC-BY-SA

In The Selling Of AI I compared the market strategy behind the AI bubble to the drug-dealer's algorithm, "the first one's free". As the drugs take hold of an addict, three things happen:

• Their price rises.
• The addict needs bigger doses for the same effect.
• Their deleterious effects kick in.

As expected, this what is happening to AI. Follow me below the fold for the details.

Meta: Slow Blogging Ahead

Source

There will be fewer than usual posts to this blog for a while. I have to write another talk for an intimidating audience, similar to the audience for my 2021 Talk at TTI/Vanguard Conference. That one took a lot of work but a few months later it became my EE380 Talk. That in turn became by far my most-read post, having so far gained 522K views. The EE380 talk eventually led to the invitation for the upcoming talk. Thus I am motivated to focus on writing this talk for the next few weeks.

Wikipedia's description of the image is:

Titivillus, a demon said to introduce errors into the work of scribes, besets a scribe at his desk (14th century illustration)

The Selling Of AI

Not AI, just a favorite

On my recent visit to London I was struck by how many of the advertisements in the Tube were selling AI. They fell into two groups, one aimed at CEOs and the other at marketing people. This is typical, the pitch for AI is impedance-matched to these targets:

• The irresistible pitch to CEOs is that they can "do more with less", or in other words they can lay off all these troublesome employees without impacting their products and sales.
• Marketing people value plausibility over correctness, which is precisely what LLMs are built to deliver. So the idea that a simple prompt will instantly generate reams of plausible collateral is similarly irresistible.

In The Back Of The AI Envelope I explained:

why Sam Altman et al are so desperate to run the "drug-dealer's algorithm" (the first one's free) and get the world hooked on this drug so they can supply a world of addicts.

You can see how this works for the two targets. Once a CEO has addicted his company to AI by laying off most of the staff, there is no way he is going to go cold turkey by hiring them back even if the AI fails to meet his expectations. And once he has laid off most of the marketing department, the remaining marketeer must still generate the reams of collateral even if it lacks a certain something.

Below the fold I look into this example of the process Cory Doctrow called enshittification.

The Festschrift For Cliff Lynch

Source

The festschrift that includes the edited version of the draft we posted back in April entitled Lots Of Cliff Keeps Stuff Safe has been officially published as Networking Networks: A Festschrift in Honor of Clifford Lynch, an open access supplement to portal: Libraries and the Academy 25, no. 3. Joan K. Lippincott writes:

The final CNI membership meeting of Cliff’s tenure, held April 7–8, 2025, in Milwaukee, was to include a surprise presentation of the Festschrift’s table of contents. Though Cliff’s health prevented him from attending in person, he participated virtually and heard readings of excerpts from each contribution. Clifford Lynch passed away shortly after, on April 10, 2025. Authors completed their essays before his passing, and the original text remains unchanged.

Below the fold is a bried snippet of each of the invited contributions and some comments.

Tesla's Robotaxi Revolution!

The mythical CyberCab

@ChrisO_wiki tweeted:

How to tell if someone's bullshitting: watch for them to give a deadline that they repeatedly push back.

This was apropos of Donald Trump's approach to tariffs and Ukraine, but below the fold I apply the criterion to Elon Musk basing Tesla's future on its robotaxi service.

The State Of Storage

The Register is running a series on The State Of Storage. Below the fold I flag some articles worth reading.

The Back Of The AI Envelope

Sauce

The rise of the technology industry over the last few decades has been powered by its very strong economies of scale. Once you have invested in developing and deploying a technology, the benefit of adding each additional customer greatly exceeds the additional cost of doing so. This led to the concept of "blitzscaling", that it makes sense to delay actually making a profit and devote these benefits to adding more customers. That way you follow the example of Amazon and Uber on the path to a monopoly laid out by Brian Arthur's Increasing Returns and Path Dependence in the Economy. Eventually you can extract monopoly rents and make excess profits, but in the meantime blitzscale believers will pump your stock price.

This is what the VCs behind OpenAI and Anthropic are doing, and what Google, Microsoft and Oracle are trying to emulate. Is it going to work? Below the fold I report on some back-of-the-envelope calculations, which I did without using A1.

The $740B Prize

Forty-two months ago I wrote The $65B Prize citing Divesh Aggarwal et al's 2019 paper Quantum attacks on Bitcoin, and how to protect against them. They noted that:

the elliptic curve signature scheme used by Bitcoin is much more at risk, and could be completely broken by a quantum computer as early as 2027, by the most optimistic estimates.

It is time to re-visit the "optimistic estimates", so follow me below the fold.

The Dawn Of Nvidia's Technology

Because Nvidia became one of the most valuable companies in the world, there are now two books explaining its rise and extolling the genius of Jensen Huang, Tae Kim's The Nvidia Way: Jensen Huang and the making of a tech giant, and Steven Witt's The Thinking Machine: Jensen Huang, Nvidia, and the World's Most Coveted Microchip. For the later 90% of the history I wasn't there, so I won't comment on their treatment of that part. But for the pre-history at Sun Microsystems and the first 10% of the history I was there. Kim's account of the business side of this era is detailed and, although it was three decades ago, matches my recollections.

Witt's account of the business side of the early history is much less detailed and some of the details don't match what I remember.

But as regards the technical aspects of this early history it appears that neither author really understood the reasons for the two kinds of innovation we made; the imaging model and the I/O architecture. Witt writes (Page 31):

The first time I asked Priem about the architecture of the NV1, he spoke uninterrupted for twenty-seven minutes.

Below the fold, I try to explain what Curtis was talking about for those 27 minutes. It will take me quite a long post.

Here There Are Blueberries

Source

On Sunday 4^th May Vicky & I saw Berkeley Rep's production of a thought-provoking new play by Moisés Kaufman, Amanda Gronich, and Tectonic Theater, the team behind The Laramie Project:

about the reaction to the 1998 murder of gay University of Wyoming student Matthew Shepard in Laramie, Wyoming. The murder was denounced as a hate crime and brought attention to the lack of hate crime laws in various states, including Wyoming.

An example of verbatim theatre, the play draws on hundreds of interviews conducted by the theatre company with inhabitants of the town, company members' own journal entries, and published news reports.

The new play, Here There Are Blueberries, is on tour after a 2022 premiere at the La Jolla Playhouse and a 2024 run at the New York Theatre Workshop. Vinson Cunningham reviewed the New York production in The Chilling Truth Pictured in “Here There Are Blueberries”:

There’s something awful about a lost picture. Maybe it’s because of a disparity between your original hope and the result: you made the photograph because you intended to keep it, and now that intention—artistic, memorial, historical—is fugitive, on the run toward ends other than your own. The picture, gone forever, possibly revived by strange eyes, will never again mean quite what you thought it would.

The play dramatizes the process archivists at the US Holocaust Memorial Museum went through to investigate an album of photographs taken at Auschwitz. Photographs from Auschwitz are extremely rare because the Nazis didn't want evidence of what happened there to survive.

Below the fold I discuss the play and some of the thoughts it provoked that are relevant to digital preservation.

The Risks Of HODL-ing

Lamborghini Urus
Alexander Migl, CC BY-SA 4.0

Traditionally, the big risk in HODL-ing cryptocurrencies has been their volatility. Fortunately, now the US government is all-in on cryptocurrencies, this risk is greatly reduced. Progress moon-wards is virtually guaranteed, so it is reasonable to invest a small part of your portfolio into Lamborghinis. HODL-ers can rest easy while the rest of the coins in their wallets appreciate because they are protected by strong cryptography (at least until the advent of a sufficiently powerful quantum computer). But progress moon-wards exacerbates some other risks to HODL-ers, as I explain below the fold.

Who Is Mining Bitcoin?

BTC "price"

It is just over a year since One Heck Of A Halvening, when Tether had pumped the Bitcoin "price" up to $73,094 the month before. Thanks to The Cryptocurrency Industry's Unprecedented Election Spending it was pumped over $100K and is now around $92K. The security of the Bitcoin blockchain depends upon Proof-of-Work, the idea being that it is more expensive to attack than any possible gains. Thus it is important that miners both spend a lot of money to mine coins, and that they can make a return on their investment in doing so. Now it is time to take a look below the fold at how the miners are doing post-Halvening.

Going Out With A Bang

In 1.5C Here We Come I criticized people like Eric Schmidt who said that:

the artificial intelligence boom was too powerful, and had too much potential, to let concerns about climate change get in the way.

Schmidt, somewhat fatalistically, said that “we’re not going to hit the climate goals anyway,”

Salomé Balthus
Uwe Hauth, CC BY-SA 4.0

In January for a Daily Mail article, Miriam Kuepper interviewed Salomé Balthus a "high-end escort and author from Berlin" who works the World Economic Forum. Balthus reported attitudes that clarify why "3C Here We Come" is more likely. The article's full title is:

What the global elite reveal to Davos sex workers: High-class escort spills the beans on what happens behind closed doors - and how wealthy 'know the world is doomed, so may as well go out with a bang'

Below the fold I look into a wide range of evidence that Balthus' clients were telling her the truth.

Cliff Lynch RIP

Source

Last Tuesday Cliff Lynch delivered an abbreviated version of his traditional closing summary and bon voyage to CNI's 2025 Spring Membership Meeting via Zoom from his sick-bed. Last Thursday night he died, still serving as Executive Director. CNI has posted In Memoriam: Clifford Lynch.

Cliff impacted a wide range of areas. The best overview is Mike Ashenfelder's 2013 profile of Cliff Lynch in the Library of Congress' Digital Preservation Pioneer series, which starts:

Clifford Lynch is widely regarded as an oracle in the culture of networked information. Lynch monitors the global information ecosystem for cultural trends and technological developments. He ponders their variables, interdependencies and influencing factors. He confers with colleagues and draws conclusions. Then he reports his observations through lectures, conference presentations and writings. People who know about Lynch pay close attention to what he has to say.

Lynch is a soft-spoken man whose work, for more than thirty years, has had an impact — directly or indirectly — on the computer, information and library science communities.

Below the fold are some additional personal notes on Cliff's contributions.

Cliff Lynch's festschrift

Vicky and I were invited to contribute to a festschrift celebrating Cliff Lynch's retirement from the Coalition for Networked Information. We decided to focus on his role in the long-running controversy over how digital information was to be preserved for the long haul.

Below the fold is our contribution, before it was copy-edited for portal: Libraries and the Academy.

Paul Evan Peters Award Lecture

At the Spring 2025 Membership Meeting of the Coalition for Networked Information, Vicky and I received the Paul Evan Peters Award.

You can tell this is an extraordinary honor from the list of previous awardees, and the fact that it is the first time it has been awarded in successive years. Part of the award is the opportunity to make an extended presentation to open the meeting. Our talk was entitled Lessons From LOCKSS, and the abstract was:

Vicky and David will look back over their two decades with the LOCKSS Program. Vicky will focus on the Program's initial goals and how they evolved as the landscape of academic communication changed. David will focus on the Program's technology, how it evolved, and how this history reveals a set of seductive, persistent but impractical ideas.

CNI has posted the video of the entire opening plenary to YouTube. Don Waters' generous introduction starts at 14:28 and Vicky starts talking at 20:00.

Below the fold is the text with links to the sources, information that appeared on slides but was not spoken, and much additional information in footnotes.

Elon Musk: Threat Or Menace? Part 6

Source

Mark Rober's video Can You Fool A Self Driving Car? demonstrating why self-driving cars need LIDAR not just cameras was extremely well done, and deserved its 16M views, but it was easily the least bad recent news for Tesla. When your sales figures and your stock price look this bad, desperation tends to set in. And trotting out the co-President and the Commerce Secretary to make sales pitches for you is a clear sign that it has.

Below the fold I look at the flood of bad news for Tesla.

Software Supply Chain Attack

Joel Wallenberg interviewed me on 14^th February for his article in the 28^th February edition of Grant's Interest Rate Observer entitled Memo to the bitcoiners. Alas, it is paywalled, but among the many quotes from me Wallenberg used was that blockchain-based systems "are very vulnerable to supply-chain attacks".

Exactly a week after the interview and a week before the article went to press, we got an example, the biggest cryptocurrency heist in history. Below the fold I discuss the details.

Bitcoin's Fee Spikes

I've written several times, for example in Fixed Supply, Variable Demand, about the mechanism that causes the cost of transacting on a blockchain like Bitcoin's to suffer massive spikes at intervals. When no-one wants to transact, fees are low. When everyone does, they are high. Below the fold I look in detail at a typical Bitcoin fee spike.

Archival Storage

I gave a talk at the Berkeley I-school's Information Access Seminar entitled Archival Storage. Below the fold is the text of the talk with links to the sources and the slides (with yellow background).

The Oligopoly Publishers

Source

Rupak Ghose's The $100 billion Bloomberg for academics and lawyers? is essential reading for anyone interested in academic publishing. He starts by charting the stock price of RELX, Thomson Reuters, and Wolters Kluwer, pointing out that in the past decade they have increased about ten-fold. He compares these publishers to Bloomberg, the financial news service. They are less profitable, but that's because their customers are less profitable. Follow me below the fold for more on this.

Software Liability: US vs. EU

I have written before about the double-edged sword of software vendors' ability to disclaim liability for the performance of their products. Six years ago I wrote The Internet of Torts about software embedded in the physical objects of the Internet of Things. Four years ago I wrote about Liability In The Software Supply Chain.

Source

Last October, Tom Uren wrote The EU Throws a Hand Grenade on Software Liability:

The EU and U.S. are taking very different approaches to the introduction of liability for software products. While the U.S. kicks the can down the road, the EU is rolling a hand grenade down it to see what happens.

It is past time to catch up on this issue, so follow me below the fold.

On Not Being Immutable

Economist 2/1/25

Regulation of cryptocurrencies was an issue in last November's US election. Molly White documented the immense sums the industry devoted to electing a crypto-friendly Congress, and converting Trump's skepticism into enthusiasm. They had two goals, pumping the price and avoiding any regulation that would hamper them ripping off the suckers.

Back in November of 2022 I added an entry to this blog's list of Impossibilities for The Compliance-Innovation Trade-off from the team at ChainArgos. It started:

tl;dr: DeFi cannot be permissionless, allow arbitrary innovation and comply with any meaningful regulations. You can only choose two of those properties. If you accept a limited form of innovation you can have two-and-a-half of them.

Fundamental results in logic and computer science impose a trade-off on any permissionless system’s ability to both permit innovation and achieve compliance with non-trivial regulations. This result depends only on long-settled concepts and the assumption a financial system must provide a logically consistent view of payments and balances to users.

This is a semi-technical treatment, with more formal work proceeding elsewhere.

Two years later, the "more formal work" has finally been published in a peer-reviewed Nature Publishing journal, Scientific Reports, which claims to be the 5^th most cited journal in the world. Jonathan Reiter tells me that, although the publishing process took two years, it did make the result better.

Below the fold I discuss Tradeoffs in automated financial regulation of decentralized finance due to limits on mutable turing machines by Ben Charoenwong, Robert M. Kirby & Jonathan Reiter.

Paul Evan Peters Award

Year	Awardee
2024	Tony Hey
2022	Paul Courant
2020	Francine Berman
2017	Herbert Van de Sompel
2014	Donald A.B. Lindberg
2011	Christine L. Borgman
2008	Daniel E. Atkins
2006	Paul Ginsparg
2004	Brewster Kahle
2002	Vinton Gray Cerf
2000	Tim Berners-Lee

It has just been announced that at the Spring 2025 Membership Meeting of the Coalition for Networked Information in Milwaukee, WI April 7^th and 8^th, Vicky and I are to receive the Paul Evan Peters Award. The press release announcing the award is here.

Vicky and I are honored and astonished by this award. Honored because it is the premiere award in the field, and astonished because we left the field more than seven years ago to take up our new full-time career as grandparents. We are all the more astonished because we are not even eligible for the award; the rules clearly state that the "award will be granted to an individual".

You can tell this is an extraordinary honor from the list of previous awardees, and the fact that it is the first time it has been awarded in successive years. Vicky and I are extremely grateful to the Association of Research Libraries, CNI and EDUCAUSE, who sponsor the award.

Original Logo

Part of the award is the opportunity to make an extended presentation to open the meeting. The text of our talk, entitled Lessons From LOCKSS, with links to the sources and information that appeared on slides but was not spoken, should appear here on April 7^th.

The work that the award recognizes was not ours alone, but the result of a decades-long effort by the entire LOCKSS team. It was made possible by support from the LOCKSS community and many others, including Michael Lesk then at NSF, Donald Waters then at the Mellon Foundation, the late Karen Hunter at Elsevier, Stanford's Michael Keller and CNI's Cliff Lynch.

A Prophet Of The Web

While doing the research for a future talk, I came across an obscure but impressively prophetic report entitled Accessibility and Integrity of Networked Information Collections that Cliff Lynch wrote for the federal Office of Technology Assessment in 1993, 32 years ago. I say "obscure" because it doesn't appear in Lynch's pre-1997 bibliography.

To give you some idea of the context in which it was written, unless you are over 70, it was more than half your life ago when in November 1989 Tim Berners-Lee's browser first accessed a page from his Web server. It was only about the same time that the first commercial, as opposed to research, Internet Service Providers started with the ARPANET being decommissioned the next year. Two years later, in December of 1991, the Stanford Linear Accelerator Center put up the first US Web page. In 1992 Tim Berners-Lee codified and extended the HTTP protocol he had earlier implemented. It would be another two years before Netscape became the first browser to support HTTPS. It would be two years after that before the ITEF approved HTTP/1.0 in RFC 1945. As you can see, Lynch was writing among the birth-pangs of the Web.

Although Lynch was insufficiently pessimistic, he got a lot of things exactly right. Below the fold I provide four out of many examples.

Storage Roundup

It is time for another roundup of topics in storage that have caught my eye recently. Below the fold I discuss the possible ending of the HAMR saga and various developments in archival storage technology.