Value Unleashed

The Geek's Reading List is a weekly publication written by Valitas advisor, Brian Piccioni. Brian has been part of the technology industry for a third of a century now. He has been a sell-side research analyst for the past 20 years, where he was ranked the #1 tech analyst in Canada for six consecutive years, named one of the best tech analysts in the world, and won a number of awards for stock-picking and estimating. The Geek's Reading List looks at recent developments in the technology sector by discussing articles that Brian compiled over the week. In his own words, the discussions are usually provocative, new, and counter-consensus. The sorts of things not being written anywhere else.

 

The Geek's Reading List
 

1) A Prayer for Archimedes
2) 75 Percent of Bluetooth Smart Locks Can Be Hacked
3) Hacked Bitcoin exchange Bitfinex will reduce balances by 36% to distribute losses amongst all users
4) Abundant Robotics spins out of SRI to bring apple-picking robots to the farm
5) Secure Boot snafu: Microsoft leaks backdoor key, firmware flung wide open
6) Researchers orbit a muon around an atom, confirm physics is broken
7) Samsung Debuts 3D XPoint Killer
8) Millions of Volkswagens can be broken into with a wireless hack
9) The Next Generation of Wireless — “5G” — Is All Hype.
10) Pay TV Providers Lost 700,000 Subscribers Last Quarter

1) A Prayer for Archimedes

Apparently historians no longer refer to the period prior to the enlightenment as the “Dark Ages”. The wholesale destruction of learned texts by people so ignorant of technology they destroyed old books because they didn’t know how to make new ones is not enough to characterize 1000 years of lost opportunity as “Dark”. For what it is worth, historians also like to pretend religious authorities were not “anti-knowledge” back then even though they vigorously oppose almost all scientific progress today. I’m going to stick with the term “Dark Ages”.

“Two of the texts hiding in the prayer book have not appeared in any other copy of Archimedes’s work, so no one but Heiberg had studied them until now. One of them, titled The Method, has special historical significance. It could be considered the earliest known work on calculus. Archimedes wrote The Method almost two thousand years before Isaac Newton and Gottfried Wilhelm von Leibniz developed calculus in the 1700s. Reviel Netz, an historian of mathematics at Stanford University who transcribed the text, says that the examination of Archimedes’ work has revealed “a new twist on the entire trajectory of Western mathematics.””

https://www.sciencenews.org/article/prayer-archimedes

2) 75 Percent of Bluetooth Smart Locks Can Be Hacked

This is yet another example of the pathetic security of most IoT devices. Or course, traditional locks can also be picked but it takes a bit of practice to learn the technique. Nevertheless it isn’t so much the lack of security as the disinterest in vendors in even admitting there is a problem.

“Researcher Anthony Rose, an electrical engineer, said that of 16 Bluetooth smart locks he and fellow researcher Ben Ramsey had tested, 12 locks opened when wirelessly attacked. The locks — including models made by Quicklock, iBlulock, Plantraco, Ceomate, Elecycle, Vians, Okidokey and Mesh Motion — had security vulnerabilities that ranged from ridiculously easy to moderately difficult to exploit. “We figured we’d find vulnerabilities in Bluetooth Low Energy locks, then contact the vendors.  It turned out that the vendors actually don’t care,” Rose said. “We contacted 12 vendors. Only one responded, and they said, ‘We know it’s a problem, but we’re not gonna fix it.'””

http://www.tomsguide.com/us/bluetooth-lock-hacks-defcon2016,news-23129.html

3) Hacked Bitcoin exchange Bitfinex will reduce balances by 36% to distribute losses amongst all users

If you are going to run an exchange with lousy security you might as well share the losses among the suckers you lure into using it. This is a follow up on the most recent multimillion dollar Bitcoin “hack” (most are likely inside jobs). Rather than taking the hit themselves they’ve decided their customers should pay the piper. Why not? It is a completely unregulated industry.

“Since the exchange used a service to individually segregate each customer’s funds in unique wallets, only some customers’ funds were drained, while others retained their full balances. The question then became would Bitfinex limit losses to only users whose wallets were compromised, or distribute them equally amongst all users (since the attack was essentially indiscriminate amongst random wallets). We now have an answer, as the company has posted that they will distribute losses amongst all users to the tune of 36.067%, which is the total loss experienced by Bitfinex.”

https://techcrunch.com/2016/08/08/hacked-bitcoin-exchange-bitfinex-will-reduce-balances-by-36-to-distribute-losses-amongst-all-users/

4) Abundant Robotics spins out of SRI to bring apple-picking robots to the farm

The article and video don’t really tell you much about the machine or its limitations. I suspect not all fruit are easily accessed by the sucker gizmo due to branches. Nevertheless it is credible that a commercially viable machine might emerge from this work. Video: https://youtu.be/TBcWZcjXr-I

“Steere said, “Seeing fruit and picking it without damaging it is the big engineering challenge. If you bruise or cut the fruit it loses its value.” According to SRI Ventures President, Manish Kothari, it had not been possible to automate the task of apple picking before recent breakthroughs in computer vision and image processing were made. He said, “You direct this robot to go someplace, see and pick an apple, and go again. It’s a very non-trivial engineering challenge. To detect apples very precisely you have to see down at the millimeter level in real time. That requires software, and on the hardware side, chips that allow you to do real time image processing on the fly.””

https://techcrunch.com/2016/08/10/abundant-robotics-spins-out-of-sri-to-bring-apple-picking-robots-to-the-farm/

5) Secure Boot snafu: Microsoft leaks backdoor key, firmware flung wide open

Long story short this development is being used as proof of the dangers of backdoors to encryption algorithms. If the backdoor key leaks or is cracked (and knowing there is a back door probably brings you a long way to cracking it) and presto you no longer have security. Given these ease with which NSA has been penetrated there are probably all kinds of foreign operatives working inside it and you can rest assured the Russians or Chinese has ready access to any proposed backdoor.

“Microsoft has inadvertently demonstrated the intrinsic security problem of including a universal backdoor in its software after it accidentally leaked its so-called “golden key”—which allows users to unlock any device that’s supposedly protected by Secure Boot, such as phones and tablets. The key basically allows anyone to bypass the provisions Microsoft has put in place ostensibly to prevent malicious versions of Windows from being installed, on any device running Windows 8.1 and upwards with Secure Boot enabled.”

http://arstechnica.com/security/2016/08/microsoft-secure-boot-firmware-snafu-leaks-golden-key/

6) Researchers orbit a muon around an atom, confirm physics is broken

Unexpected results are the sorts of things which make experimental physicists giddy. In this case they created an artificial atom with a muon, rather than an electron, orbiting the nucleus. The orbital radius turned out to be significantly different from what was predicted by the standard model of physics and that difference could mean a significant revision to theory.

“Their first attempt showed something strange: the value for the radius they got was significantly smaller than the one obtained when you measure using an electron. Remember, the muon and the electron should be equivalent, so there should be no difference. Currently, we have no physics that could explain the difference. The finding had a statistical significance of over five sigma, which is the standard for announcing discovery in physics. Still, it might have been possible to dismiss this as some sort of experimental oddity. Or at least it was until the team gathered even more data, pushing the significance up to over seven sigma. At this point, there was no way around the fact that we have what has become known as the “proton radius puzzle.””

http://arstechnica.com/science/2016/08/researchers-orbit-a-muon-around-an-atom-confirm-physics-is-broken/

7) Samsung Debuts 3D XPoint Killer

I wrote about 3D XPoint, the new non-volatile memory technology introduced by Intel and Micron about a year ago. There are still plenty of unanswered questions regarding 3D XPoint, not the least of which is cost. Samsung has provided almost no details regarding its Z-NAND technology but the price range seems good. Samsung has about 50% market share in SSDs so it has a strong incentive to keep ahead of the competition.

“Samsung’s Z-NAND will deliver 10x faster reads than multi-level cell flash and writes that are twice as fast, the company said. At the drive level, they will support both reads and writes at about 20 microseconds, suggesting some of write performance comes from an enhanced controller. …The first drives will have a terabyte capacity. Like today’s high-end SSDs they will draw a full 25W from a PCIe Gen 3 slot to deliver maximum IOPS. Costs will be “a little bit more than standard triple-level cell flash shipping today, but it will be more cost effective than alternative memory technologies,” said Shiah, in a nod to 3D Xpoint.”

http://www.eetimes.com/document.asp?doc_id=1330285

8) Millions of Volkswagens can be broken into with a wireless hack

I would not be surprised if substantially all cars with electronic key systems can be broken in to. The fobs themselves are very simple devices and eavesdropping, even from a distance, should be straightforward. Of course anybody can break into any car just by breaking the window. Actually stealing a car with a electronic key to start it is probably much more difficult.

“Millions of Volkswagens built over the past 20 years can be broken into with a hack that exploits the cars’ remote control key systems, security researchers have found. Most VWs built since 1995 use one of a handful of electronic “master keys” to remotely open and lock the doors, and those keys can be extracted by reverse engineering the firmware, the researchers wrote in a new paper. That alone isn’t enough to break into a car—the master key has to be combined with a unique code generated by each remote key device. But the researchers also devised a way to do that, assembling a piece of radio hardware costing around $40. The radio device eavesdrops on the signal sent from the key fob to the car. Once the signals are decrypted, the researchers were able to make copies of the key fob and open the car door.”

http://www.pcworld.com/article/3106859/security/millions-of-volkswagens-can-be-broken-into-with-a-wireless-hack.html

9) The Next Generation of Wireless — “5G” — Is All Hype.

This is a counterpoint to most of what has been read about 5G. I believe the mistake which is being made is assuming all 5G systems will run at millimeter wave radio which is not the case. Nevertheless, the point about needing fiber is a good one even though microwave backhaul can work in many cases. Absent a competitive infrastructure the technology will remain limited.

“Here’s what you need to understand: “5G” is a marketing term. There is no 5G standard — yet. The International Telecommunications Union plans to have standards ready by 2020. So for the moment “5G” refers to a handful of different kinds of technologies that are predicted, but not guaranteed, to emerge at some point in the next 3 to 7 years. (3GPP, a carrier consortium that will be contributing to the ITU process, said last year that until an actual standard exists, “’5G’ will remain a marketing & industry term that companies will use as they see fit.” At least they’re candid.) At the moment, advertising something as “5G” carries no greater significance than saying it’s “blazing fast” or “next generation” — but because “5G” sounds technical, it’s good for sales. We are a long way away from actual deployment.”

https://backchannel.com/the-next-generation-of-wireless-5g-is-all-hype-1790239b8ca8#.w2z1vtdx9

10) Pay TV Providers Lost 700,000 Subscribers Last Quarter

Consumers with decent broadband now have alternatives to pay TV and cable. Netflix and other streaming services provide a cost effective alternative. Mind you as the article notes the industry’s response has been to continuously raise prices (and though it is not in the article, lower quality). I have zero interest in sports but even ESPN is losing a lot of subscribers (http://www.outkickthecoverage.com/espn-loses-4-million-subscribers-in-past-year-080416) due mainly to the same phenomenon.

“Moffett has consistently argued that the numbers are actually worse when you factor in how the housing market rebounded without a corresponding spike in pay TV subscriptions, suggesting that when many people move — they aren’t reconnecting traditional cable. Moffett’s research note also took aim at subscriber tracking metrics in a TV industry that hasn’t always been receptive to a candid look at the numbers. “The pay-TV industry is struggling with a measurement problem,” he said. “The most commonly cited numbers are Nielsen’s estimates of cable network subscribers.” “Company-reported numbers are, by contrast, lagged 30 to 90 days (based on the payables from their distributors), making changes in trend a bit harder to discern,” said Moffett. “And Nielsen’s numbers don’t include new OTT distributors like Sling and Sony Vue, which at this point, may represent 800,000 subscribers.””

http://www.dslreports.com/shownews/Pay-TV-Providers-Lost-700000-Subscribers-Last-Quarter-137633