Bitcoin is poised to be a digital currency that can be used broadly ranging from daily purchase transaction to international money transfer. However, based on the current analysis, bitcoin is unsuitable for such kind of tasks due to the intrinsic flaws in the bitcoin protocol.
In the bitcoin protocol, each transaction will be broadcasted to the whole bitcoin network, once confirmed by a certain number of nodes, the new transaction will be stored in a new block permanently. Currently, each block is generated in about 10 minutes with the block size of 1 MB. This only allows about 7 transactions per second. For Visa credit card, currently it handles 2000 transactions per second with a peak value of 4000 transactions per second. If bitcoin is really poised to be a world currency, its protocol needs to scale 600 times.
The most common proposal to increase the scalability of bitcoin network is to increase the size of the blockchain. The blockchain can be increase to 2 MB or even 20 MB. However, there are significantly downfall of this approach. First, it still won't be able to scale 600 times. Second, increasing the blockchain size will slowdown the network tremendously, let alone the increased storage.
More creative solutions for this problem is crucial for making bitcoin a mainstream success.
Saturday, December 9, 2017
Thursday, December 1, 2016
The innovation of wechat
Wechat is a popular online chatting software/service made by Tencent. It has a few novel features which enables people to engage with each other in a new ways.
The first feature is called moments. The moments features enables customers to post microblogs with pictures, very similar to twitter or weibo. The difference is that by default the momments are only visible to the "friends" of the customer. In some sense, it is a private twitter.
The second feature is called group. In the wechat groups, customers can chat real time with groups of authorized people. This groups are typically focused on specific topics or tied with specific groups of people, such as alumni from the same school. These natural grouping enhances the trust among the users.
The third feature is called voice messaging, similar to voice mail, it enables people to chat by sending voice messages to each other in real time.
These three features enables powerful new ways to get people engaged and communicate.
The first feature is called moments. The moments features enables customers to post microblogs with pictures, very similar to twitter or weibo. The difference is that by default the momments are only visible to the "friends" of the customer. In some sense, it is a private twitter.
The second feature is called group. In the wechat groups, customers can chat real time with groups of authorized people. This groups are typically focused on specific topics or tied with specific groups of people, such as alumni from the same school. These natural grouping enhances the trust among the users.
The third feature is called voice messaging, similar to voice mail, it enables people to chat by sending voice messages to each other in real time.
These three features enables powerful new ways to get people engaged and communicate.
Thursday, November 17, 2016
Hackathon as a process of creating innovative product
Very well managed software organization typically have established process and routines. Following these established processes are imperative to deliver the commercial software on time with the quality requirements. However, improvised innovation quite often falls into the cracks of the large shipments. A few companies is capable of continuously churning out innovative products over the years, one of them is facebook.
How does facebook create so many innovative products? The answer is hackathon. At facebook hackathon, the engineers are temporarily abstained from the daily responsibilities and are empowered with the freedom to pursue the projects that are interesting to them. Innovation is actually a part of human nature, under the right scenario or an innovation supportive environment, the hurdles of innovation are lifted and people become creative.
The benefits of Hackathon model vs traditional grant based model is compared here.
The first is about scheduling, during Hackathon, which typically last no more than a few days, you can make the call whether this project will make the cut. The traditional grant based model typically will take the applicants months even years to get approval.
The second is about communication, in Hackathon Model, the project description is not required, the end result is a demo of the prototype of the project. In grand based model, the grant application itself can be tens even hundreds of pages. The concepts and methods needs to make sense to the grant reviewer in order to pass. In order to increase the chance of getting approved, grant applicants sometime are reluctant to put ideas that require some leap of faith.
Hackathon is a great alternative model to introduce innovation into the product without significant investments.
How does facebook create so many innovative products? The answer is hackathon. At facebook hackathon, the engineers are temporarily abstained from the daily responsibilities and are empowered with the freedom to pursue the projects that are interesting to them. Innovation is actually a part of human nature, under the right scenario or an innovation supportive environment, the hurdles of innovation are lifted and people become creative.
The benefits of Hackathon model vs traditional grant based model is compared here.
The first is about scheduling, during Hackathon, which typically last no more than a few days, you can make the call whether this project will make the cut. The traditional grant based model typically will take the applicants months even years to get approval.
The second is about communication, in Hackathon Model, the project description is not required, the end result is a demo of the prototype of the project. In grand based model, the grant application itself can be tens even hundreds of pages. The concepts and methods needs to make sense to the grant reviewer in order to pass. In order to increase the chance of getting approved, grant applicants sometime are reluctant to put ideas that require some leap of faith.
Hackathon is a great alternative model to introduce innovation into the product without significant investments.
Thursday, August 4, 2016
The innovation and competition of Netflix
The stock of Netflix (NFLX) is one of the best performing security in 2015. However, this year (2016), NFLX has experienced set backs. This blog post describes the innovations that Netflix has brought and the challenges that Netflix is facing.
Prior to Netflix, the primary way for people to watch video for entertainment is through TV and DVD/VHS.
With the prevalence, Netflix leads the wave of video entertainment by providing a monthly subscription based viewing plan. A consumer can pay 9$ per month for unlimited access of the video that Netflix provides. Facing competition from Hulu, Amazon Prime and a high P/E ratio, the question we are asking is "Does Netflix has a durable competitive advantage?".
This question can be separated into two parts, a. content, b. technology. From technology perspective, there is very little substantial differences between Amazon Prime, Hulu and Netflix. If one feature is implemented in one of them, the others will quickly adopt it. In the end, video playing is not as complicated as operating a word processor. The second is content, from what I found, Netflix is not competitive in terms of content, many well received movies or shows are not available through streaming. Netflix is striving to compensate this via producing original shows such as "House of Cards" and acquiring shows that are exclusive to Netflix. Amazon Prime is following a similar path. Although this may mitigate the content shortage problem, it is doubtful whether this is a sustainable economic model.
Because of the traction of online streaming, the traditional video media are losing mindshare from their customers, as a result, they are reluctant to collaborate with the new comers. Instead, they like to put the their content online by themselves, for example HBO online. It seems it is not that hard to setup a video website, the differentiator of the online streaming business is the content. As a result, unless Netflix finds a creative and sustainable revenue to solve the content problem, the challenge that it is facing will persist into the forseeable future.
Sunday, July 17, 2016
The innovation of Pokemon Go
Pokemon Go is a rising mobile game which let players to catch pokemon at specified locations. This provides motivations for people to move around, have fun and enjoy the benefits of physical activity. Since the public adoption of Internet, the increasingly addictive websites/apps are often depicted as the cause of reduced physical activities and the damages to human bodies. Pokemon Go game has changed. Players often reports that they can easily reach their daily exercise goal with a little bit playing.
From innovation perspective, the interesting question is what is new? Geographic active app is not entirely new, for example, four square, waze, yelp allow users to write reviews, feedbacks, report findings on the mobile devices. Mobile game is also not new. What is new is the integration among mobile gaming, augment reality and geographic activity. These ingredients altogether create a compelling user experience with very high return rate.
However, none of these technologies are strictly proprietary, we can expect in near future, augment reality games will comprise a bigger share of the gaming market as well as mobile Internet attention.
From innovation perspective, the interesting question is what is new? Geographic active app is not entirely new, for example, four square, waze, yelp allow users to write reviews, feedbacks, report findings on the mobile devices. Mobile game is also not new. What is new is the integration among mobile gaming, augment reality and geographic activity. These ingredients altogether create a compelling user experience with very high return rate.
However, none of these technologies are strictly proprietary, we can expect in near future, augment reality games will comprise a bigger share of the gaming market as well as mobile Internet attention.
Thursday, March 10, 2016
Innovations that increase the competitive advantage
There are two types of innovation that increases the competitive advantage. The first type is the attracter of the customer, the second type is the renter of the customer. The attracter of the customer can fullfill an unmet customer needs, it be a new function, a specific design or cost. The retender can be membership, customer resource investment or departure penalty.
For the bridge, you can put lights on the bridge to make it more attractive to those curious. You can also make the bridge wider, on festivals, you can let vendors to sell arts/crafts, ice cream, pop corn on the bridge, basically converting the bridge into a night market. It becomes not only the best place to cross the bridge but also a good place to hang out with friends and family. These are all the attractors of bridge. There can also be a point card, the more you spend on the bridge, the more points you get. There is also a fast lane, that you can pay and receive a bill later on. Basically, you do need to pay for a fee for passing the bridge, but you feel the bridge is well worth the money.
The retender can be multipass of the bridge, switching discount (if you ask to terminate the multipass, you can be offered a discount for next year's multipass, etc) , loss of the accumulated points.
For the bridge, you can put lights on the bridge to make it more attractive to those curious. You can also make the bridge wider, on festivals, you can let vendors to sell arts/crafts, ice cream, pop corn on the bridge, basically converting the bridge into a night market. It becomes not only the best place to cross the bridge but also a good place to hang out with friends and family. These are all the attractors of bridge. There can also be a point card, the more you spend on the bridge, the more points you get. There is also a fast lane, that you can pay and receive a bill later on. Basically, you do need to pay for a fee for passing the bridge, but you feel the bridge is well worth the money.
The retender can be multipass of the bridge, switching discount (if you ask to terminate the multipass, you can be offered a discount for next year's multipass, etc) , loss of the accumulated points.
How to innovate an operating system when there is a free one there.
A computer operating system is a piece of software that turns the hardware alive. In history, both Apple and Windows operating system have made huge amount of money. However, in recent years, because of the competition from free Linux and Android, operating system are in danger of becoming of low margin business. What could an operating system innovate to keep on fending off the competition from the cheaper ones?
The first one is to improve the customer experience.
Basically, there should be richer open box experiences available on proprietary Operation System than a free operating system. All the software companies that are interested in running promotion should be able to give their free trials installed on the proprietary operating system.
The second one is to improve the developer experience.
In order to improve the developer experience, there are developers who wants to innovate, you got to empower them to innovate on the proprietary operating system because you can provide more components that can be re-used just as is. You got to make better documentation of the API, provide more extensive sample code, keep on enhancing the functionality of the existing API. Implement expensive and widely used algorithm, e.g. singular value decomposition, deep learning, at the low level, so that others love the proprietary implementation better than others.
The third one is to reduce the total cost of ownership.
Owning a computer is not only about acquisition cost. Although the acquisition cost for Linux is zero, maintaining it is not. Focusing on improving the tools that are important to manage each component will likely to reduce the total cost ownership. For example, there should be a dash board for network, dashboard for printing, dashboard for file sharing, dashboard for Internet usage, dashboard for security.
The first one is to improve the customer experience.
Basically, there should be richer open box experiences available on proprietary Operation System than a free operating system. All the software companies that are interested in running promotion should be able to give their free trials installed on the proprietary operating system.
The second one is to improve the developer experience.
In order to improve the developer experience, there are developers who wants to innovate, you got to empower them to innovate on the proprietary operating system because you can provide more components that can be re-used just as is. You got to make better documentation of the API, provide more extensive sample code, keep on enhancing the functionality of the existing API. Implement expensive and widely used algorithm, e.g. singular value decomposition, deep learning, at the low level, so that others love the proprietary implementation better than others.
The third one is to reduce the total cost of ownership.
Owning a computer is not only about acquisition cost. Although the acquisition cost for Linux is zero, maintaining it is not. Focusing on improving the tools that are important to manage each component will likely to reduce the total cost ownership. For example, there should be a dash board for network, dashboard for printing, dashboard for file sharing, dashboard for Internet usage, dashboard for security.
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