@Royal_Arse Asks

Nature, Sports, & Money: Cycles of Life.

Occam’s Razor: who is most likely to be Satoshi Nakamoto?

An empirical attempt to identify Satoshi. Even though it doesn’t matter who / what invented bitcoin, the mystery is deeply fascinating!


Bitcoin is a very non-obvious idea, of the kind that takes years of crystallization; maybe an entire lifetime. An idea born from the cypherpunk mindset, developed over time by a person with a deep passion for economics of the most abstract kind and a mastery of unusual cryptography concepts. The recent suggestions in the press that every other person who has a scientific background could be the creator of Bitcoin only serve to show how little some “journalists” understand about Bitcoin and its origins.

Previously on this blog, I talked about how a search for characteristic turns of phrase occurring in the original Bitcoin whitepaper led me to the essays of Professor Nick Szabo. Here I recapitulate what I found so far, and present new results from a stylometric analysis applied to the usual suspects of Bitcoin.

First, let us review the facts known about Nick Szabo (NS).

  • NS is…

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iPhone and Android Mobile Applications: Native Code or Responsive Design?


LinkedIN stack and codebase for mobile.

When building a brand new web application, should the developers opt for native code or responsive design?  With a surplus of evidence supporting either approach finding a concrete solution is elusive.  So what’s the best play?

Solve a complex problem with solution A or B? Nah, lets use A and B!

Old neck-beards would agree that delivering the best possible experience requires a blend of the two development methodologies.  The magic is hidden inside common ground, where we’ll find objective c code peaceful commingling with javascript, HTML5/CSS3.  How can we blend responsive design and device-native code to create the best possible application?

Like diagnosing ailments, app development is treated case-by-case, where differences in media, technology, expectations and budgets will create emergent flavours of mobile app development techniques.

Using LinkedIN as a test case, they find that the bottleneck in mobile apps is latency, not bandwidth, and the native code can help alleviate this, alongside sprocket-using node.js.

Interestingly, LinkedIn iOS app is 30/70 native-to-responsive, while their Android app inverts that ratio.  As Chrome browser for Android becomes default, more of the codebase will move into javascript and away from java.

Don’t take my word for it, I stole these figures from this great video featuring the lead mobile developer at LinkedIN.  Very informative talk, excellent use of your time if you’re interested in tech.

PS — Prototypes of their new apps are done in black and white, since shades and colours are influential during user testing.  The addition of colour transformed the UI and UX in meaningfully as people respond to these visual stimuli in disparate ways.

Satoshi Nakamoto is (probably) Nick Szabo

Identifying Satoshi Nakamoto through textual analysis. Brilliant piece of investigation that suggest the author of Bitcoin whitepaper is very likely a well-published and respected CS prof named Nick Szabo.


I recently became interested in identifying the pseudonymous creator of Bitcoin, Satoshi Nakamoto. I started from the Bitcoin whitepaper [0] published in late 2008, and proceeded to run reverse textual analysis –essentially, searching the internet for highly unusual turns of phrase and vocabulary patterns (in particular places which you would expect a cryptography researcher to contribute to), then evaluating the fitness of each match found by running textual similarity metrics on several pages of their writing.

Which led me rather directly to several articles from Nick Szabo’s blog.

For those who wouldn’t know Nick Szabo and his documented links to Bitcoin: prior to the apparition of Bitcoin, Nick had been developing for several years (since 1998 [1]) the enabling mechanism for a decentralized digital currency, eventually converging on a system he called “bit gold” [3], which is the direct precursor to the Bitcoin architecture.

According to what seems to be…

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Tutorial: Hacking Lore with simply jQuery to save course material from Bitmaker Labs.

With 3 lines of code we can target all the links on a webpage, open them in their own browser window, save or bookmark.

Tools include: jQuery, Chrome Dev Console, laziness, Dossier.

Dude to Dev: Learning Software Development in 9 Weeks


Long-standing analogy I’ve abused when asked about learning Ruby on Rails or Javascript goes, “…akin to forced learning of a foreign language.  But in two months, and its Finnish.  Plus, you’re parachuted into Vaasa buck naked like Les Stroud grazing the land and listening to the locals.”

Don’t think it’s been told like that, but you get the essence: adaptability will determine survival rate.  Hard work goes a long way and the view of your surroundings will never be the same.

Bitmaker Labs has been outstanding.  My only issue is that I can’t stay longer.  The staff, my classmates, and the guests that frequent are an admirable combination of accomplished and ambitious, smart and engaging, curious and weird.  The nascent Bitmaker culture will thrive for long to come, as will its student who grasp Ruby on Rails, Javascript, jQuery, and numerous other software development languages, libraries, frameworks and techniques.

Coding is a mixture of art and science.  Our cauldron is a MacBook, the ingredients as simple as Google and practice.  It’s a powerful toolkit to bring information or entertainment into the world, since online activity is overtaking print, TV and real life for many.

Software developers are navigating that process for us.  The best of whom explore minds of others to discover and enhance human-machine interactions.  They do so by studying behaviour, language and logic.  If successful one can ply their talent in development, design, engineering, marketing and many other disciplines.

If you’re learning to code or a prospective students at Bitmaker or another software develop bootcamp, prepare for hard work.  Computers are stupid and learning how to chit chat with them is complex.  Two tips:

Know your machine.  Mac, Linux, Windows in that order.  Whatever your choice know how it works! Practice with the tools/apps you’ll be using while developing software: a text editor (Sublime), command line, console(s), Chrome Dev tools, etc).  Learn how to type fast and know keyboard shortcuts.  Memorize them right now, so important.

Do the pre-work suggested. Without completing the prework your asking Grampa to fight Colton Orr.  It’s gonna be a massacre.  Get battle-ready by doing the suggested pre-work, plus further reading and coding practice.  Those prepared will be both more likely to have fun during the course and obtain employment based on technical merit.

With limited experience and talent, and a lot of time invested you can create some cool stuff.  Modest few simple functions, but the door is open for more features and better style with time.

Next stop: something like this: http://bl.ocks.org/mbostock/6747043

UPDATE: This code ended up here.

Also, more fun with D3 on the Stats page.

Search, Social Networks & the Robots that Ruined Them

Wrote this a few years ago, proud of the content and wanted to give it a bump.

@Royal_Arse Asks

Many social media experts have lamented on deterioration in the quality of search engines and social networks recently.  The criticism is wide-ranging, but one specific area so pervasive and influential on the content we consume needs to be explored in great detail: the impact of algorithms.

Understanding how filtered-algorithmic search skews your information consumption is vital to the Information Revolution.  Is it a good thing that two different people searching identical topics at the same time will yield dramatically different results?  Eli Pariser discusses what he calls invisible algorithmic editing at Ted:

To paraphrase a few key points:

  • There is a shift to how information is flowing online and it is invisible.
  • Facebook noticed that I was clicking more links from a certain type of friend .  Without consulting me about it, the contrary links were edited out: they disappeared.
  • Phenomena observed even when logged out — search…

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7 Simple Lessons from 7 Years in Banking, Finance, Economics & Trading

1.  Fees are the devil, period.  Either learn how to manage your own investments or suck up the fact that you won’t beat the market

trading floor(or index funds) over the long term.

2.  Free markets don’t exist.  Every government on Earth has their hands in any pot they can get themselves into.  They are either corrupt or stupid and will waste your money — or worse, prohibit citizens’ ability to acquire goods and services at fair market prices with laws and tariffs — every chance they get.

3.  Slow money is smart money.  Don’t chase fads or trends unless you are an agile, informed and attentive investment professional.  By the time George Costanza or Betty Draper knows about a trend in the markets, the pro’s are positioning on the other side and plan to sell to the latecomers: retail investors.

4.  If it sounds like a gimmick, it is.  Trust you gut.  Most people have the basic instincts required to suss out a charlatan.  If you don’t, as PT Barnum would say, “… a sucker is born everyday” and ignorance is readily exploited.  The pressure and expectations at large financial institutions demand bankers seize every opportunity, whether born from hard word and diligence or counterparty ignorance.  Some more cliches for emphasis: KISS, there is nothing new under the sun.

5. Buying discounted securities and holding until they realize their full value is the only way to ensure you’re investing with a margin of safety and thus can rest comfortably knowing there is a reasonable chance of growing your capital over the long term.

5.  Forecasting is biased, or worse, fabricated misdirection.  Due to perverse incentives at large institutions [both public (central banks, think tanks etc) and private (banks)] or pure guesses.  Some economists and portfolio managers can be trusted but it takes years to figure out who, and WHEN, advice should be embraced.

6.  Financial service providers carefully toe the line between partnership and exploitation.  They will extract as much as they can in fees while tactfully managing loyalty and client experiences.

7.  Much of the dogma (or marketing) in the investment sphere is not supported by recent academic literature.  Efficient markets, risk = return, time in the market vs. time out of the market.    The primary findings by many academics who review investment fund performance: fees destroy most returns, markets (prices) follow a random walk and pricing inefficiencies abound in all corners and in most asset classes.

Disclaimer: I was institutionalized at the Bank for closer to 6 years than 7, but the headline was cleaner with the stretch.  I am an expert in financial markets, but still have tons to learn and if you contest any point please share your thoughts in the comments.

Blackberry Valuation Study: What is $BBRY worth?


I love the keyboard and email!

Update (25-Sept-2013): Fairfax came in with a sweetheart $9 bid for BBRY not 4 trading hours after they announced horrible results and material staff reduction as part of broad restructuring.  As suggested below, BBRY is worth $7-9. Thanks to Prem Watsa et al for validating the following fundamental analysis.


Having lived in Southern Ontario my entire life, and worked briefly near Waterloo-area Blackberry (formerly RIM) headquarters I am very frequently asked my opinion on the stock price.  Mostly I tell people to ignore it, and sell if they own, but more on that later.

Throughout the agonizing drop from pinnacle of the mobile phone pantheon BBRY has always been top of mind.  The goal of this post is to KISS and answer the question in the title: what is the stock worth?

During early 2010 the nascent post-GFC recovery pushed shares of BBRY upwards from ~$40 bottom to reach $60-80.  After this run I started advocating employees of RIM, and other holders of the shares, divest themselves in favour of the iPhone-producing Apple $AAPL (for the risk takers) or cash (for those less apt to stay in the market).  Since then, as we all know, RIM dumped their founders Jim & Jim, overhauled their branding, and oh yea, watched their stock price drop ceaselessly from $80 to $10.

What is the true value of BBRY shares?

To find the rock-bottom valuation we’ll use tangible book value (TBV).  This strips out many assumptions that go into valuing a business as a going concern by assuming the worst: BBRY will immediately enter bankruptcy, never sell another device, or collect another nickel from subscribers (which is not going to happen anytime soon).

Using this hypothetical scenario gives us the most basic and reliable valuation.  By adding together the Co’s real assets and subtracting their long-term debt we find BBRY tangible book value (TBV) is roughly $7.

To find this value we add two their 2 core assets: cash + real estate ($5.86 + $1.31 = $7.17) and then subtract LT debt ($0) to arrive at TBV of $7.17.  This is the theoretical minimum price at which shares should trade around.

As a value investor, it would thus be prudent to buy BBRY if and only if it trades below $6, which will likely to occur IMO sometime in tax-loss season (Nov/Dec 2013).

What about Book Value?

Plain old book value (BV) incorporates some assumptions into our valuation, specifically intangible assets and cash flows.  The resultant mixture of data muddies the waters as the value of these elements is less clear and reliable.  Adding in these murky elements has ramification on the range of potential valuations and should evoke more scrupulous analysis of the figures below.

Why Bother?

Some investors would stop here and proclaim that value is only found below $6 per share and that anything higher is rip off since BBRY is a complete disaster and they have no chance to survive since their sales are about to vapourize.  Maybe so.  However valuing BBRY as going concern is only fair given they have millions of customers which generate +$3 Billion in sales every 3 months!  It’s not the struggling coffee shop in Miramichi, New Brunswick but a massive global enterprise.

Taking a fair outlook on their future business prospects by assuming a significant, but not catastrophic, decline in operational cash flow will boost the value per share.  Additionally,  we must add the other intangible assets like patents & intellectual property to round out our KISS study.

Starting with the latter, intellectual property & patents where some analysts have suggested BBRY owns $4.00 per share worth of assets.  Adding $4 to TBV makes a potential stock price of $10-$11 seem reasonable.  However, over the course of the past 6 weeks shares have traded for ~$9 (ignoring the huge leg up over last few days).  This is our first of 2 example of the market doubting BBRY through ‘discounting’.  By discounting their intangible assets (and cash flow, as well see below), the market doesn’t view the patents value as $4, but more like $9-$7 (Stock Price -TBV) = $2.

You might ask, “Why is the market doubting the patent values and not the cash or RE value?” and the answer is simple: assets which are easy to value (cash & RE) are discounted LESS than that which is complex or valued less reliably (patents etc).  We can be fairly confident that TBV is more static and reliable than BV for this reason.

Furthermore, the market is fully discounting cash flow that BBRY generates. Analysts from CIBC modelling their cash flows over the next 5 years and suggest — even with considerable drop off in sales and subscribers — BBRY generates $2 bil/year, which adds $10 of value to each share.  The market, however, is calling BS and is valuing BBRY operations at $0.  Using these optimistic assumptions, some firms have $20 price targets.

This is a mighty kick in the groin to a former titan of the mobile industry, but investors might view this as a sign that market is wrong and has undervalued BBRY since you can buy the assets of the business and get the cash flow for free.

Note the previous recommendation of staying away until BBRY sells for around $6 still hold to ensure margin of safety and reasonable rate of return to compensate for risk.  Will it ever regain former glory?  No, at least this author is highly doubtful.  Will it reach $6 per share or less?  Yes, I believe it will before Xmas this year, but what the hell do I know?

So, what do you think $BBRY is worth?

Exports and Forex in North America: Cheaper Loonie Equal More Exports to US?


Despite strong loonie growth in exports to the USA exceeded that of total exports.

Admittedly this is an incomplete analysis, but here is a look at how exchange rates impacted exports leaving Canada: a) to the USA, b) total exports. In theory, a weak loonie would incentivize US businesses to buy good and services from Canada. However, when the loonie is roaring 2001-2007 growth in exports to the US rises faster than total exports!

Public Salaries Inverse to Disclosure: Conservatives Support Big Government, Again.

ImageDecisions are being made by unelected officials in closed meetings impacting every Canadian; nothing new in the Developed World where the skew of wealth and income align harmoniously with distribution of power and influence.  Acknowledging the comfort of politicians in Ottawa (and elsewhere) doesn’t explain why the Conservative Party of Canada (CPC) would recklessly violate their core principals by watering down a bill to promote transparency on salary and expenses.

MP Brent Rathgeber is going Independent after the decision by CPC to suppress his bill promoting disclosure. In a resignation letter he writes:

“Clearly, the Government’s decision not to support my Private Member’s Bill on CBC and Public Sector disclosure and transparency in Committee was the proverbial straw that broke the camel’s back“

These days the Conservative Caucus sees folks come and go like leaves in the breeze (see Mike Duffy expense scandal).  Mr. Rathgeber is resigning for reasons unrelated, sort of.  It’s about money, an ideological clash, a shady resolution that evokes a whiff of ethical malfeasance.

He explains his position in a detailed video from CBC: how his bill was gutted by bureaucrats who are terrified to disclose their earnings and expenses.

Publishing a simple and concise record of public payrolls and expenses is certainly a benefit to Canadian taxpayers.  Alternatively, suppressing the information serves no one, has little, if any opportunity costs, and comes off sleazy.  Disclosure should no harm or shame if the funds are used fairly and appropriately.  But clearly they aren’t.

Increased accountability will force a culture shock onto overspending MPs and overpaid public employees.  The entitlement-soaked public sector has most provinces spending far beyond their means, so we need a tighter grip on the purse strings desperately.

The debt and budget deficits in California, notoriously corrupt financial basket case, were recently compared to those facing Ontario.  The financials are so dire in Ontario that you’d sooner move from a Malibu mansion into a Kapuskasing camper than trade books with Canadas’ largest province.

Any effort to reduce spending is timely given our austere circumstances.  Disclosing salaries and expenses serves a purpose and should be a standardized practice for all people, businesses and other third parties receiving taxpayer money.  Its our god damn money in the first place.

Conservative principals ring through repeatedly throughout the letter from Mr. Rathgeber:

“A return to balanced budgets, limiting the size and scope of government, the aforementioned open and transparent operation of government, belief in markets and eliminating corporate subsidies are all matters of importance to my constituents but have all been sacrificed to the altar of electoral calculation… I can only compromise so much before I begin to not recognize myself.  I no longer recognize much of the party that I joined and whose principles (at least on paper), I still believe in.”
Won’t make a big splash at the water cooler but taxpayers should immediately take notice of the toxic policy and dismal spending records.  These events provide financial details of our government, but also a lens through which we can closely observe their culture and ethical standards.

Our tax-and-spend, free-for-all government in Ontario (and throughout North America) breeds Bev Oda and Mike Duffy, ORNGE, helicopter trips for Peter MacKay, McGuinty $1 Billion gas plant, Green Energy Act, etc.  The CPC fails on their promise of financial sanity.  This lacks discipline and restraint, void of common sense.  Avowed to oppose waste and porky legislation, CPC exhibit through policymaking they want taxpayers money to be distributed without account.

A scorching finale to the resignation letter:

“I joined the Reform/conservative movements because I thought we were somehow different, a band of Ottawa outsiders riding into town to clean the place up, promoting open government and accountability.  I barely recognize ourselves, and worse I fear that we have morphed into what we once mocked.“

He describes the shameful mechanics of dark alley politics.  The bill gets diluted time and again, rewritten so meaningfully as to be ineffective, contradictory to the philosophical agreement and jovial verbal support from his colleagues.  Only a machine so well-lubricated by the saliva deposits transferred from ambitious lips upon swollen Executive asses could turn mandatory salary and expense disclosure into rubbish.

None of this was determined in an open forum, as voting members were given the chance to oppose the Bill on-record and all declined.  Yet, in the shadows where voting took place they moved against the disclosure bill, breaking the back of an prairie boy trying to do some good in the world.

This is a shameful mockery of conservative principals, a big slap in the face to average Joe’s handing over 1/3 to 1/2 of their earnings, and a sad day for Canadian politics.  The taxpayers, who finance this whole Dog & Pony show, are too busy complaining about the banks hiring foreign workers.  But, this isn’t exclusively about Canadian politics since we’re not alone among the class of people who are oppressed by ignorant and corrupt governance.

Conjure up the state of affairs in Greece, California, Spain, Illinois,  Italy, and Turkey.  Their government got so lazy and bloated that their insolvency forced reduced living standards upon the working class.  Government excess thrust depression on the regular folk who relied on their stewardship.  But greed, money, power, got’em.  And those well-laid plans are too often egregious misallocations…

The full piece is a must read.  Find it here:


More background from CBC http://www.cbc.ca/news/politics/story/2013/06/05/edmonton-brent-rathgeber-resigns-conservative-caucus.html

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