The first part of this
two-part blog, published last month, explored the fundamental ideas of money.
Here are some key things to bear in mind as we continue our exploration of this
endlessly fascinating subject.
- Money is a universal
token (metal coins and paper bills) having a value that is expected, but not guaranteed, to be stable over time and is trusted by the people. This trust is usually established by a national government issuing and standing behind its currency (dollars, euros, francs, kroners, pounds, pesos, etc.).
- Money is a great
facilitator of exchange transactions (buying and selling), the core of
- Money has no intrinsic
value. Even when money is equated with silver or gold, the value of money can
fluctuate with the prices of these metals.
- Money must move
quickly and seamlessly from one place to another in today’s largely integrated
worldwide society, which was not previously the case in local, largely isolated
In short, to a large extent, the
legitimacy and value of money is whatever a national government says it is.
A strategic inflection point is a time in the life of business when its fundamentals are about to change. That change can mean an opportunity to rise to new heights. But it may just as likely signal the beginning of the end.
—Andrew S. Grove, Only the Paranoid Survive (1988)
In the late 1960s Intel sniffed the winds of change and made a dramatic decision to build microprocessors instead of random access memory, RAM. Former Intel CEO Andy Grove describes this abrupt change in Intel’s strategy as an inflection point. As we know from mathematics, the coordinates of an inflection point are where a curve changes direction—typically from up to down or the reverse. In the case of young Intel, the RAM business was no longer profitable, and yet, the profitability of microprocessor chips was totally unknown. It was a choice between dying along with the RAM market or possibly dying with an unproven product in a non-existent market. We now know Grove was right, but he could have been wrong. Such is the life of an entrepreneur.
It has been 50 years since Intel’s inflection point was recognized and then mostly forgotten. But the company and the industry it grew up with is facing another inflection point—the demise of Dennard scaling—the 1974 rule that the power consumption of CMOS chips remains constant as transistors are scaled down in size. Continue reading
There’s a widely accepted principle about technology adoption. When a new technology is introduced, people are aware of it and learn how to use it. After a while, people come to embody the practices of using it well and are no longer aware of it. It is just part of our world. We no longer notice how we ever lived without it. Some say this principle is characteristic of the computer age. However, this did not originate with computers. It has always been the case with revolutions in daily life. Those who see the revolution taking place are unlikely ever to forget it. Those who see only the effects of the revolution often don’t fully recognize and appreciate it. I call examples of this phenomenon “extraordinary ordinary things.” For me, the most undervalued extraordinary ordinary thing is the elevator. Continue reading
Spaghetti code is not getting any respect. Software experts denigrate it; coding classes avoid it like the plague; and when students go out into the world, they spend inordinate amounts of time trying to follow their mentors’ instructions. This unalloyed disparagement of spaghetti code is unfortunate, because we owe so much to it. Continue reading