An ancient business recipe for modern success.

In 2009, I commented on the similarities between eBay and ancient king Croesus: in both business models one becomes enormously rich by owning a money standard. 2,500 years ago, the newly introduced money standard was gold coins, now, it's digital coins. eBay's 2009 strategy to make PayPal the largest part of the company is beginning to bear a hefty fruit:

CNET. July 20, 2011 1:44 PM PDT.

eBay reported second-quarter earnings of $283 million, or 22 cents a share, on revenue of $2.76 billion.

Overall, PayPal is carrying eBay. PayPal delivered its first $1 billion quarter and had 100.3 million registered accounts, up 15 percent from a year ago.

Note, that this growth happened during one of the worst recessions in American history. This would make Croesus proud. The business model he invented in the 6th century BC continues to work like a charm.

tags: money, business, model, commerce, system, deontic, payload, transfer, economics

A money lightning bolt! A digital one!

Another entrant into the mobile payment market:

The Square hardware is a small, inexpensive card reader that plugs into the audio jack of a compatible device, including a mobile phone (it's starting with the iPhone and currently has job postings up for BlackBerry and Android engineers). It processes credit card payments, geotags their locations on a map, and e-mails a receipt to the buyer.

As I wrote earlier, eBay is also betting on the emergence of the digital wallet. Long-term, money - a digital signal - will be handled by software, rather than dedicated hardware, but the Square solution might succeed as a short-term stop-gap effort to get small businesses onto the mobile transactions bandwagon.
I wonder how IPv6 is going to affect the picture. Ideally, you would just "ping" your money to the vendor, without any credit cards at all.

tags: money, transfer, payload, control, greatest, infrastructure

Routing the signal: Nature, Nurture, and the Fed.

A remarkable similarity between the way neurons in the brain work (a nature's invention) and the way devices (a human invention) control transfer of energy, e.g. signal, in electronic devices. In the first case, signal propagation is mediated by releasing chemicals into neural environment. In the second, energy propagation is mediated by releasing electromagnetic radiation into electronic environment.

From Second Nature, by G.M.Edelman (1972 Nobel Prize in Medicine):

Each of these value systems releases a type of neurotransmitter or neuromodulator under particular circumstances. ... On receipt of salient startle signal, say a loud noise, these neurons release a neurotransmitter called noradrenaline into the surrounding space, as if from a leaky garden hose. The result can lower the threshold of synaptic responses of multiple neurons, leading to more firing as well as to changes in the synaptic strength among these neurons. p 31.

US Patent 7,587,107. Claim 1 (obfuscating terms removed):

A method of controlling energy propagation, comprising: guiding energy...; blocking the ... energy ... by electromagnetically saturating ... the guiding structure along the ... path... with electromagnetic radiation.

To control the economy, the Federal Reserve acts in a very similar way. It lowers or raises background interest rates, which either facilitates or inhibits transfer of money between economic agents.

In system terms, the Control affects certain properties of the Route(s) to change delivery of a particular Payload.

:: payload, control, distribution, problem, pattern, transfer, example

Just like viruses, elements of previous technologies embed themselves into inventors' designs:

On 21-22 October 1879, Edison and his staff conducted their first successful experiments with a carbon-filament lamp in a vacuum. The filament was made from a piece of carbonized thread. By New Year's he was demonstrating lamps using carbonized cardboard filaments to large crowds at the Menlo Park laboratory. A year later, Edison began manufacturing commercial lamps using carbonized Japanese bamboo as filaments.

1904 Fleming invents the vacuum diode

British engineer Sir John Ambrose Fleming invents the two-electrode radio rectifier; or vacuum diode, which he calls an oscillation valve. Based on Edison's lightbulbs, the valve reliably detects radio waves. Transcontinental telephone service becomes possible with Lee De Forest's 1907 patent of the triode, or three-element vacuum tube, which electronically amplifies signals.


1943 First vacuum-tube programmable logic calculator

Colossus, the world’s first vacuum-tube programmable logic calculator, is built in Britain for the purpose of breaking Nazi codes. On average, Colossus deciphers a coded message in two hours.