The Digital Wallet of the Future (1996)

The rest of the world did move on to smart cards in limited form, from phone cards to credit cards. The USA never did implement these cool ideas; and our credit-card companies JUST NOW put chips in their cards... but then blew it by still resorting to signatures instead of PINs.

I mean, that's what he's describing and what PocketPCs were? That's not what the current crop of smartphones beat Microsoft at.

These are the operating systems they were developing at that time. DOS, OS/2, Windows, Windows NT and Cairo. Each was a different code base, different strategic vision and different technical requirements. That’s unbelievably stupid. They soon ditched OS/2, DOS and the failed Cairo project, but then added Windows CE.

They never valued and core technology. Each product or market segment was addressed separately, from scratch by a new product team. The compiler team barely talked to the tools team, who developed separate tech from the applications teams who used their own frameworks different from those provided by the OS team. Most of the narrative is about teams talking past each other in meetings and struggling to get them to work together. It’s nuts.

What he got wrong was that he thought that it would be a computer that would contain a phone as an app, while what happened is that it's a phone that happens to be a computer. And it wasn't even Apple or Google that showed the way, but Nokia.

And it's pretty funny how it happened. So we had these pocket computers a few years later in the late nineties, the PDAs. Some of them were running an OS called EPOC. But nobody (well, very few people) really wanted a PDA, because why would you? It was clumsy and inconvenient with the stylus and it didn't do much.

However, when they appeared, everybody wanted a mobile phone. Because then you could actually call and talk on the move. And then, almost by accident we had text messages. (Initially created for broadcasting messages from the operator to the users. Because who would want to type messages on a number pad when you can make a call, right?)

So then as these phones became more powerful, they would have more and more complex software. At some point Nokia figures out that they could put an actual PC into a phone that people could nickname "the brick". That's the original Nokia 9000 communicator. It had (I'm just seeing) an intel 386 CPU. It's actually the same year Gates wrote this article, 1996.

Then probably others came up with similar products, but the next one I saw was the Nokia 9210, built on that oldish PDA OS I mentioned above, EPOC. And it already had internet connectivity (although not permanent, you had to manually connect through GPRS), with a browser and email, etc. That's 2001 and I happened to have one (and happened to work at Nokia back then).

And then people started saying that "phones are for making calls" and mobile companies like Ericsson and Sony (besides Nokia) start to roll out smart phones based on an OS called Symbian, that is basically a newer version of EPOC. And these are already what Gates was talking about. They started to have a GPS, a camera, always-on internet connectivity (with 3G), installable software, etc.

Microsoft also tried to enter the market (with various versions of windows mobile/ce/whatnot), well before Apple and Google. What they didn't figure out probably is that they would have to build the phone. Back then there was no other way around. Especially if they wanted to make money. Even Google doesn't make money on selling android for mobile manufacturers. And MS didn't have another business model other than that, I think. Though they could have tried given it away for free, just to dominate the market, like they did with IE. I don't know if they tried that or not. But their OS wasn't that good and making smart phones wasn't that easy back then, so you didn't have a lot of companies doing it, and of course, the market was much-much-much smaller. Because that was still the time when people kept saying that "phones are for making calls". (At least that was something I heard frequently when people saw my phones and learned that I work for Nokia and that I write software for smart phones.)

And then Apple came and they made smart phones sexy. Actually the original iphone was way dumber than a generic Symbian smart phone. Like no MMS and no "push" email and, IIRC, no user installable software. But it had a phenomenal UX. So it actually sold the concept to all those people who used to think that these were actually phones (and thus mainly for making calls). And then people wanted iphones and soon a smart phone (i.e. an iphone or an android phone, because Nokia was done with pretty quickly). And after a while they learned that the smart phone is indeed a PC and can do a lot more than taking pictures and pinch-zooming them or the map.

But it is an interesting take.

I have been reading a book called "The Bitcoin Standard" which highlights that the goal is a switch for society towards Austrian economics and getting back to something like the gold standard (Hint: Bitcoin is the better gold).

The book is quite good and I learned a lot about the history of money - so I'd recommend it.

To paraphrase, the current cash printing is vaporware and not backed by anything anymore - making it quite weak and easy to attack - disaster waiting to happen. Central planning of currency should be replaced by a democratic and capitalist system where the best currency evolves naturally. Which might or might not possibly happen with Bitcoin.

Something like a government bailout using tax payer money of a "too big to fail" organization would not happen in such a world - making the economic system a lot stronger for the individuals.

They're even working on extending it to support offline transactions.

This is a scary thing to put into any government's hands, let alone the Chinese government's, but it has enough attractive properties that it has a good chance of catching on.

Also, you almost never need to do an offline transaction. (I'm not 100% sure, but IIRC that is a feature of at least some of those digital cash solutions based on blind signatures.) And if you can do prompt online transactions and you don't care much about privacy (because you trust the banks) then you don't need digital cash.

BTC and all the other blockchain bases solutions are speculative assets. They hold the promise of creating value out of nothing. So it's a strong motivation for at least some of the developers and most of the adopters. Digital cash, on the other hand, would be issued by banks, so no one could earn a profit from holding them (well, compared to holding the actual currency on their account). Though, in theory digital cash could be issued by its developers (just as blockchain based ones), but since it would sound new and obscure, people wouldn't trust it. (BTC and the blockchain took quite a few years too.)