There are already quite a few drones in use in U.S. airspace, but given that commercial drone usage remains off-limits, most of them are either operated by government agencies or for research purposes.
Today, however, the FAA has taken another step in its congressionally mandated process of integrating drones into the U.S. air traffic system. The FAA today announced six test sites in six states (out of 24 that applied) where it plans to test and develop systems for the safe integration of drones into the airspace system.
The focus here is clearly on testing. While the official plan is to integrate drones into the national airspace by 2015, it’s unlikely that the FAA will make this deadline and that we will see commercial drones flying alongside the usual Boeing 737s and Cessna 152s in the very near future. The idea here, after all, is to integrate them into the so-called “NextGen” air traffic control systems that are more famous for their false starts and budget overruns than anything else.
But before drones can be integrated into the current air traffic control system, the FAA wants to create standard procedures for things like lost links to the drone (which is somewhat akin to a plane losing radio contact with the air traffic control) and best practices for setting up ground-control stations, avoiding other traffic and how to certify and deal with the humans that actually operate the machines.
Among the six sites is Griffiss International Airport in Rome, New York, which will handle test and evaluation processes and focus on integrations drones into the heavily congested northeast airspace. The site will be operated by an alliance of 40 public and private organizations from New York and Massachusetts. The alliance will also host a test site at Joint Base Cape Cod in Massachusetts.
The University of Alaska will develop standards for state monitoring and navigation, using test site range locations in seven climatic zones ranging from Hawaii to Oregon (though it’s unclear which airports exactly the university plans to use for this). Nevada, which is already and the vanguard of allowing driver-less cars on its roads, will work on air traffic control procedures and the integration of drones into the regular airspace system.
Texas A&M University in Corpus Christi won support for its plan to develop procedures for handling airworthiness testing and Virginia Polytechnic Institute and Virginia Tech (who submitted a joint plan) will work on failure mode testing and risk evaluation.
Of course we’re not quite sure how the Amazon Prime Air drone delivery project fits in with the FAA’s plans just yet.
Business Insider’s Joe Wiesenthal today published an interesting piece on Bitcoin, partially responding to Paul Krugman’s somewhat inscrutable recent blog post that called the cryptocurrency “evil,” and partially answering the question of why Bitcoin has value. It’s been a topic we’ve been discussing for months, making Wiesenthal’s argument worth digging into.
He breaks Bitcoin into three interrelated characteristics that support one another: It’s a currency, equity, and a social network.
Bitcoin acts as a currency because you can use it as a generic exchange medium in lieu of dollars and other traditional currencies in a growing number of places. Bitcoin also at least behaves as an equity, because the more people who use and accept it, the more the value of each coin — at least thus far — generally rises.
Interestingly, Bitcoin’s ability to act as a currency and an equity are both predicated on its network effects. Wiesenthal puts this succinctly: “Strong, robust network effects are crucial for making the whole thing work.” He links to Antonis Polemitis who makes the same argument: “If people stop using bitcoin, its intrinsic value is zero. Its value is 100% derived by the fact that it is a network.”
If we view Bitcoin’s value as a currency and an equity as supremely predicated on its strength as a network, we can then state that its value rises and falls with the strength of that network. This means that Bitcoin’s value is something that we can therefore better understand.
The gist is that it’s been frakking hard to explain to anyone why Bitcoin makes more sense at $700 than $800 or even $300. However, if we can consistently point to an expanding network, we can presume that Bitcoin’s value should therefore be rising.
This does not allow us to say that Bitcoin’s current price, and its requisite swings, match its inherent value. In fact, I think that we can presume that they do not. According to Coinbase, Bitcoin spiked from $208 at the start of November to $1,049 on the first of December. If we assume that Bitcoin’s network effects gave its exchange rate (currency) or asset value (equity) a proper valuation at the start of the month, we can either argue that its network became (roughly) five times as valuable in the month, or that investors overbid Bitcoin. Its ensuing price slump would point towards the latter.
I’ve correlated the price of Bitcoin to its current news volume a few times, and it’s a connection that I think is quite plain. That’s not a bad thing, of course, as Bitcoin needs the public to become better informed about its existence so that it can grow its buying class and bolster the cohort of sellers willing to accept it.
But if the growth of the network is the growth in Bitcoin’s value, does it not have a risk of negative reinforcement? That’s to say that a strong negative correction in Bitcoin’s price would harm both sides of the table, skewering the positive impacts of network effects by flipping them around.
Does Bitcoin’s reliance on its network make it less stable than a traditional currency? I think so, but not necessarily fatally. Krugman quotes Brad Delong on the things you can’t do with Bitcoin:
Underpinning the value of gold is that if all else fails you can use it to make pretty things. Underpinning the value of the dollar is a combination of (a) the fact that you can use them to pay your taxes to the U.S. government, and (b) that the Federal Reserve is a potential dollar sink and has promised to buy them back and extinguish them if their real value starts to sink at (much) more than 2%/year (yes, I know).
You could argue that paying your taxes with dollars is a form of network effect, but that feels like a stretch. What this means is that Bitcoin’s value is less moored to things that we can jokingly call offline.
What is important to take from the above is that Bitcoin’s ability to expand its network is critically important as the supply of coins continues to grow. There is a hard cap of Bitcoins that will be released, but we are not there yet. So, Bitcoin fans want expanding utility (network) to grow at a higher rate than new coins are introduced.
There is another issue involved with the long-term utility of Bitcoin that is worth discussing, which is that its price volatility makes it hard to sell tangible goods (as opposed to non-tangible digital services, etc.) with the stuff. If I sell you a Tesla with Bitcoin, and the next day Bitcoin falls 25 percent before I can cash out my coins, that’s a pretty big deal. So Bitcoin needs a more stable price, which can only come to fruition after its network becomes large enough to have validated the price of Bitcoin at a certain level. And for that it needs to attract more retailers, which are kept out by its price swings.
This is all simple in summary: The utility of Bitcoin as a currency and its value as an equity depend on its network, which provides the market opportunities for Bitcoin to behave as either.
Fitbit has just released a major update to its iOS app for iPhone 5s, allowing the smartphone itself to track steps, distance and burned calories.
These are basic features, and just a fraction of the metrics provided by one of Fitbit’s own hardware devices, such as the Fitbit handheld or the Fitbit Flex wristband. With a Fitbit Force, for example, you can track all the basic information as well as flights of stairs climbed and sleep. Plus, it acts as a watch feeding you the information on a digital screen.
Still, the accompanying app has always been an integral part of the Fitbit hardware experience, as it offers a dashboard for every metric as well as a log tracking nutritional intake.
In other words, the app gives a robust outlook of overall health over time, which has made Fitbit a big contender in the space against Nike and others.
With the launch of the M7 motion coprocessor in the iPhone 5s, Fitbit has decided to offer “basic” tracking from the phone itself, likely with the intention to entice an upgrade.
The update comes just in time for New Years, as the pudgy masses resolve to lose the holiday weight.
Twitter has had a rough few days in the markets, slipping from north of $74 to just over $60 at the end of trading today. That’s not even half the story, however: Twitter’s December is one for the record books.
If dropping almost 20 percent in a few days of trading is dramatic, so too is Twitter’s epic run from December’s opening price of $40.76 to its high in the month of $74.31, a rise of more than 82 percent in just 18 trading sessions. The massive rise in Twitter’s value far outstrips the ensuing minor correction.
Put another way, Twitter is still up around 50 percent in the month, a huge rise in its value that no one seems to understand. Twitter has yet to report earnings as a public company, so we have essentially no new information that we can use to vet the firm. The rise in its stock price is therefore hard to attribute to any specific thing other than exuberance.
As TechCrunch reported earlier today when Twitter’s slide was underway, investors currently do not expect the company to report positive earnings per share until 2015. Therefore, the public will likely value Twitter on its ability to grow its revenue, a financial metric that is slowing for the company.
However, Twitter itself remains, presumably, as strong as it was when it went public at $26 per share. Therefore, the saga of its stock price can be essentially discounted until we have more data on the firm.
And that investors are willing to take profits after a huge bull run is about as surprising as the sun deciding to rise tomorrow. So keep in mind that Twitter’s rise is likely mere speculative earnest. The real report comes with earnings.
But let’s have some fun. The New York Times:
Max Ganik has no doubts that Twitter’s stock — up 145 percent since it first began trading on Nov. 7 — is firmly in bubble territory.
“But that doesn’t mean it’s going to stop going up,” said Mr. Ganik, 16, a junior at a high school in Scarsdale, N.Y., who doubled his money by lunchtime on Thursday trading Twitter stock options, and planned to dive back in on Monday. “Traders are going to drive up the price. The valuation doesn’t actually matter at this point.”
It’s all different this time!