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The Revolution Is Now August 27, 2009

Posted by Michael in Economics, Science.

Maybe the internet is about to change everything. Again.

Social networking is making a difference.

The internet has been incredibly efficient at accomplishing what economists call “disintermediation,” i.e., cutting out the middleman in buy-sell transactions, and thereby removing links from the supply chain. The best example is eBay, which is basically a highly efficient global junkyard. Sanford & Son has been rendered obsolete by servers and search algorithms. We don’t need junkyards any more. Online, eBay can directly connect buyers and sellers of junk. Companies like FedEx and DHL have minimized the cost of moving the junk, in part by using the internet to bleed cost out of their transportation networks.

The internet also is amazingly good at creating the “network effect,” i.e., the value of the network infrastructure increases exponentially with each new user supplying free content.

The ultimate disintermediation is on our doorstep — cutting out geography (and borders) in human social interactions, in addition to economic transactions, while the network effect goes wild.

Facebook, Twitter, YouTube, and LinkedIn may be the vanguard of a new revolution.

Vodpod videos no longer available.

It all sounds good to me. It’s IP technology, monster chipsets and fiber optics enabling free speech and free markets in powerful new ways, the consequences of which we can barely imagine. The consumer demand for bandwidth is multiplying every year, especially from mobile devices like smartphones and netbooks.

The technology that makes all this possible creates an equally huge issue — privacy. All this personal information online can by misused by someone — thieves, corporations, governments. The cookies that litter your hard drive right now are child’s play compared to the really sensitive technologies — like deep packet inspection.

The Chinese government uses Deep Packet Inspection to monitor and censor network traffic and content that it claims harmful to Chinese citizens or state interests. This material includes pornography, information on religion, and political dissent.[21] People within China often find themselves blocked while accessing Web sites containing content related to Taiwanese and Tibetan independence, Falun Gong, the Dalai Lama, the Tiananmen Square protests and massacre of 1989, political parties that oppose that of the ruling Communist party, or a variety of anti-Communist movements.[22] China also blocks VOIP traffic in and out of their country (though skype seems to work without problem),[18] as well as visual media sites like YouTube.com and various photography and blogging sites.

Wikipedia: Deep Packet Inspection

So, maybe you are wondering — Michael, what is deep packet inspection?

OK, I’m not really a technology person, but I’ll try to explain. Internet data travels at the speed of light in little chunks called packets. The first part of that chunk, called the header, is basically an address that tells the internet where that chunk is going. The rest is the content of the chunk generated by the user. DPI is software looking, and possibly filtering and collecting, the data behind the header. It’s sort of like your mailman is not just reading the address on the envelope, but opening the mail and glancing at your letter, except your mailman is really just a computer and no human beings actually look at this stuff. This could be done for valid reasons, like detecting virus attacks, or for censorship, like the Chinese are doing.

Telecom corporations worldwide have been looking at ways to serve ads based on deep packet inspection and “behavioral targeting” techniques, but so far have largely backed off based on privacy concerns and the lack of clear regulations or agreed industry standards. Still, this could be a good thing. If you are a golf nut, you would probably prefer to see ads about golf gear on your TV or PC screen, rather than just random stuff that you ignore. On the other hand, you probably don’t want ads being directed at you because the network knows you are a Nazi or you have an S&M fetish.

The opportunities and threats posed by the internet are mind-boggling.  We’ve only just begun to learn what it entails.


1. Retired Geezer - August 28, 2009

Well dangit, that doesn’t explain all the Enhancement spam that I get.

No sireee.

2. sohos - August 28, 2009

When I was stuck in bed after my surgeries I had looked up compression socks for my leg. Now all of the ads I get are compression socks, leg braces, wheelchairs, etc…I bet they think I am in my 70’s

3. xbradtc - August 28, 2009

Age or breast size?

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