Bankruptcy Threatens Computer and Net Usage

1st April 1998

MUNICH: In a move predicted to have serious ramifications for the internet,
leading maker of binary digits, Bitfabrikenworken Gesellschaft gmbh, today
announced that it is filing for bankruptcy. This move is believed to be
prompted by the realisation of abnormal losses resulting from unauthorised
derivatives trading linked to the collapse in value of the Thai baht.

Computer systems consultant Michael J Springhoff, of Anders Arthurson
Consulting, believes that the move will have a major impact upon the
functioning of the net. "Bitworken was the world's largest supplier of
bits, with some 50 to 60 percent of manufacturing share." Bits are the
binary digits, representing 'on' or 'off' on which computers and the
internet run. "All digital computers use bits to represent programs and
data in their memory and all communications protocols on the internet are
based on the use of bits". "If BFW [Bitfabrikenworken] ceases production of
these bits, which seems highly likely now, then there will be a major
shortage of bits. Computers will not have enough to form programs when they
boot up and many computers will display error message like "unexpected end
of file encountered" or "this computer is running Windows 95". Data already
stored on hard disk will not be affected unless it is read in from the disk
and the computer then runs out of bits before it can be fully written back.
"If your computer loads a file and runs out of bits halfway through, then
only some of your file can be written back to disk and the rest will be
lost." As a result, Springhoff advises that users not use their computers
until the future of bit production is clear. "It would be terrible if you
opened up the final version of your thesis or your company's end of year
report only to have your computer run out of bits halfway through, leaving
you with only the first chapter."

If the bit shortage eventuates, the internet is expected to suffer massive
failures as computers simply run out of bits to send. "The 'net is like a
huge series of pipelines criss-crossing the world," says Springhoff,
"except that instead of conveying oil or gas it conveys bits. Obviously, if
computers in some parts of the world just run out of bits then there is
nothing for the net to send and things will come to a standstill." Worse,
some commentators predict a 'negative bit suckback effect' which might
affect a computer full of bits that is connected through the internet to a
computer which suddenly runs out: the other computer, in a desperate
attempt to keep running, could create a 'bit vacuum' which, in effect, will
suck bits from your machine to it, probably crashing your machine and
corrupting its data in the process. The effect would be worst for those
computers connected to the 'net by high-speed and high-bandwidth
connections such as ISDN or ethernet lines, but modem users could
experience the effects on a smaller scale. The only suggested solution is
to refrain from connecting to the internet at all until the world supply of
bits can be assured.

Major private companies are already turning to countries with a positive
bit surplus in an attempt to head off potential problems. Brazil, New
Zealand and Iceland are the hot choices as the low level of computer usage
in these countries means that many small businesses and government
departments have reasonable stockpiles of unused bits which can be bought
and transferred to the US and other large users of computing power. "While
the exact figure for New Zealand is unknown," says Springhoff, "it is
believed that they have some 15 or 16 terabytes of unused bits stockpiled
around the country, which is even more per head of population than the
number of sheep in that country. If carefully used, it could be a major
export for the country and provide much-needed foreign exchange." Other
analysts are worried, however, that the bits will be used purely for their
electrical value in powering generators in the blacked out city of
Auckland. That would be a terrible waste, according to Springhoff,
equivalent, he says, to burning 200 year old mahogany wood to heat your
house. However, the possibility is quite real if power is not restored in
that city soon.

The other major winners from this crisis are companies that specialise in
recycling bits. These companies, which generally buy old computers and
break them apart to salvage the bits inside, are expected to make a killing
from the boom in demand for their bits. It is not known how many bits can
be provided by this method, but it is estimated that 10 to 20 percent of
the shortfall of bits could be made up. However, it is a non-renewable
source of bits and there is already sign of possible opposition from
environmental groups opposed to the environmentally unsustainable use of
bits.

A last possible hope would be that the company is either taken into
bankruptcy administration or that its bit generation and bit foundry works
are taken over whole by another manufacturer so that the disruption of bit
production is minimal. So far no overt expressions of interest have been
made, although leading Japanese bit producer Wondrous Star Bits Kaisen
Kaisha is reported to be interested in some form of arrangement.

--- Ben Kremer
     benk@vislab.usyd.edu.au             http://users.ox.ac.uk/~magd0672/
              Copyright (c) 1998 Ben Kremer. All rights reserved.

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