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Chiar dacă încheierea campaniei pentru upgrade gratuit la Windows 10 a fost anunţată pentru data de 29 iulie, Microsoft continuă să ofere utilizatorilor de Windows 7 şi Windows 8/8.1 o portiţă pentru a obţine gratis o licenţă validă de Windows 10.
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With the rapid development of computer technology, artificial intelligence and big data technology have undergone a qualitative leap, permeating into various industries. In order to fully harness the role of artificial intelligence in the field of nuclear engineering, we propose to use the LSTM algorithm in deep learning to model the BEAVRS (Benchmark for Evaluation And Validation of Reactor Simulations) core first cycle loading. The BEAVRS core is simulated by DRAGON and DONJON, the training set and the test set are arranged in a sequential fashion according to the evolution of time, and the LSTM model is constructed by changing a number of hyperparameters. In addition to this, the training set and the test set are retained in a chronological order that is different from one another throughout the whole process. Additionally, there is a significant pattern that is followed when subsetting both the training set and the test set. This pattern applies to both sets. The steps in this design are very carefully arranged. The findings of the experiments suggest that the model can be altered by making use of the appropriate hyperparameters in such a way as to bring the maximum error of the effective multiplication factor keff prediction of the core within 2.5 pcm (10–5), and the average error within 0.5266 pcm, which validated the successful application of machine learning to transport equations.
Role of AI in Enhancing Biodiversity within Permaculture Farms Holistic permaculture Holistic permaculture, as a system of ecologically friendly living, integrates the different components plants, animals, and microorganisms in a given area to provide the optimal environment for all. Permaculture is about promoting diversity in what’s at the center of it, which is the basic principle used to establish a balance and make these systems more resilient. Nevertheless, the efficient management of biodiversity on permaculture farms is a complex matter that may need a detailed plan and strong implementation. This is where AI comes into play, acts as an enabler of innovations specific to its use, and makes it all the more powerful to increase biodiversity in permaculture farms. The Role of AI in Enhancing Biodiversity within Permaculture Farms. AI technologies can be transformative concerning permaculture farms in the future, as they will be able to approach biodiversity management in innovative ways. Decoding the information that AI has obtained from machine learning algorithms is critical, as these algorithms make possible powerful predictive modeling and data analysis tools for the creation and upkeep of efficient, green ecosystems. This species is an identification and counting process. A considerable part of these jobs includes species tracking and identification, which can be done using AI. Through a blend of computer vision techniques combined with AI [artificial intelligence] algorithms, it is possible to not only efficiently identify and monitor different crop and animal species present in the farmland but also to get a comprehensive planting and census. This information in particular has enabled decision-makers to rely on facts and figures so that the environment remains as balanced and healthy as possible by keeping all species in check. Habitat modeling and optimization (trial and error). AI can scan massive amounts of data, such as weather trends, soil makeup, and topography, to create a perfect setting for different species. AI technology can be used to determine the particular needs of different living organisms. This will in turn facilitate the system's ability to recommend optimum planting patterns, water management procedures, and ecological interventions that can make an ecosystem flourish. It is a precautionary measure. It safeguards that the farm supports all the species, and coexistence will prevail through the design and implementation of management practices. Pests and Diseases Management Among the main difficulties of permaculture, agribusiness is controlling pests and diseases in a way that does not use dangerous chemicals or unsustainable practices. The position of AI in the growth of the type of biodiversity that is essentially characterized by permaculture plants entails the creation of technical tools like smart pest detection and disease surveillance systems. These systems can detect early symptoms of infestations or infections and advise ecological management measures that fit the situation, for example, promoting the foundation of natural enemies or implementing biological control methods. AI provides the core function of disease and pest limitation, which minimizes the possible disruption of the ecosystem’s fertility and biodiversity. The use of predictive analytics and decision support systems can be a critical step in addressing homelessness. AI predictive technologies' applicability goes beyond triggering the identification of potential threats and opportunities for farmers; it also narrows down on predicting likely pressure points or areas of exploration. Through examination of historical data, environmental factors, and the current environment, AI algorithms will pinpoint the likelihood of migration, fluctuations in population, or the emergence of new ecological viruses. Such anticipation ability is the turning point for the practice of permaculture. So the practitioners will be able to take proactive measures, adjusting planting schedules to save seeds and introducing new species to maintain balance sustainably and healthily. IoT in agriculture facilitates real-time crop monitoring and data gathering, which has indirectly improved farm productivity. Successful biodiversity management heavily depends on the absence of needed and up-to-date data. The role of AI in strengthening the diversity of agricultural systems within permaculture farms is to involve the installation of discovering devices, such as sensor networks and remote sensing technologies. They can create a system of data collection that can keep track of the numbers of various environmental parameters, populations of species, and ecosystem dynamics with many pieces of data; the artificial intelligence can be programmed to analyze and create actionable insights. Challenges and Considerations AI technology for the improvement of biodiversity within the area of permaculture adventures, but insignificant issues are hindering its implementation. Ensuring precise and reliable predictions from AI models is vital since the dangers of misdiagnosis or wrong recommendation could hurt not only the fragile communities on permaculture farms but also eat into the benefits that permaculture may be serving. Also, moralizing questions arise about the application of technical AI in ecological systems and must be addressed with great care, adhering to natural laws. Conclusion AI has a huge role in promoting crop diversity within permaculture farms and developing it. Through the utilization of machine learning and other sophisticated tools, AI not only gathers data but also interprets it to formulate useful recommendations that can be used to plant and sustain the economic structure of permaculture farms. From indeeding people and figuring out habitats to pest control and predictive analysis, AI offers willful solutions to deal with the complicated problems of biodiversity control. FAQS Whether or not artificial intelligence should be used in permaculture farms, what are the possible disadvantages or risks? Some possible downsides may be inexact forecasting or guidance that could be caused in case the data is biased or incomplete, the possible AI covering important factors is an ecology or custom, and the danger of over-reliance on AI may bring the society out of the community knowledge and skills. What is the mechanism for small-scale farmers to populate and customize the AI approaches to agro-biodiversity management? There are many channels to find innovators in agtech or ecology research and development that utilize AI, as well as open-source AI, tools, and platforms, and organizations offering AI-powered solutions and consulting services for sustainable farming practices. Biodiversity management is now asked for AI. Morally, how does AI address this? AI systems may be developed, for instance, to adhere to ethical standards and guidelines as below: respecting natural environments, refraining from harming them, and accommodating existing ecological knowledge systems. Besides that, AI-generated suggestions can be reviewed and evaluated by experts and agents to cover their ethics and cultural values framework.
Welcome to the Arduino Workshop, where you'll be able to follow our guided course which covers everything you'll need to know in order to create your own Arduino projects and become a leveled up maker. My name is Sam and along with being a maker myself, I also enjoy teaching others how to use different technology and create amazing projects. Along with the course videos themselves, you can find all of the related course material such as code examples, circuit diagrams, images, and other resources. We'll be working with Arduino so you'll need an Arduino board to follow this course. We'll be introducing many different concepts including working with various types of hardware such as sensors, displays, and general electronics components, and the kit we're using for all of this is the Sparkfun Inventors Kit. If you are not in Australia, you can grab from Sparkfun directly and have it shipped to you almost anywhere in the world. Course Goals: Understand what an Arduino is and how it works Learn how to use an Arduino safely Program your Arduino using code that you've written in the Arduino IDE (Integrated Development Environment) Learn programming concepts using C and C++ along with Arduino specific programming Understand best practice concepts for programming and prototyping Use a wide variety of hardware and components and prototype your projects using a breadboard Build your own innovative project with Arduino When you're ready, let's begin the Arduino Workshop! If you run into any issues throughout this workshop, then please reach out to us on our forum. We're full-time makers and are here to help. Chapter 1: Introduction to Arduino 1.0 Chapter Overview In this chapter you'll learn about: What is Arduino Different types of Arduino boards How does the Arduino Uno board work and why it's so popular What is a microcontroller How to use the Arduino IDE (Integrated Development Environment) Powering and connecting your Arduino to your computer Uploading programs to your Arduino board By the end of this chapter, you will have uploaded your first program to your Arduino board to control an LED. 1.1 What is Arduino? In this section, we look at what is Arduino, what it's good for makers, and some of the different types of Arduino boards available. Section Resources: Example Arduino Uno Variations 1.2 What is a Microcontroller? In this section, we'll be looking at what is a microcontroller (the chip at the heart of any Arduino board), an overview of how they work, and how it integrates with the Arduino environment. 1.3 The Arduino Uno In this section, you'll learn about the features and capabilities of the Arduino Uno board, how the layout of the board can affect your project, and why the Uno is such a great all-rounder. 1.4 Arduino IDE and the Language In this section, we'll take a look at the Arduino IDE, which is where you write the code for your Arduino, upload it, and communicate with your board. We'll also cover the programming language that Arduino IDE uses, and where to download it. Section Resources: You can download the Arduino IDE from the Arduino website. 1.5 Powering and Connecting Your Arduino In this section, you'll be learning about the various ways to power your Arduino, and how to connect it up to your computer for uploading your programs, and communicating to the computer using the serial port. Section Resources: Arduino Power Layout 1.6 Hello World Example In the final section of this chapter, we'll talk through using the Arduino IDE to upload your first program to your Arduino board. Section Resources: Source code for 'Hello World' void setup() { pinMode(13, OUTPUT); //setup pin 13 as an output } void loop() { digitalWrite(13, HIGH); // turn the LED on (HIGH outputs 5V) delay(500); // wait for 500 milliseconds digitalWrite(13, LOW); // turn the LED off (LOW outputs 0V) delay(500); // wait for 500 milliseconds } Chapter 2: Using Inputs and Outputs 2.0 Chapter Overview In this chapter you'll learn about: How to properly structure your code Using variables to write more capable programs Building circuits using a breadboard Reading inputs and controlling outputs using the digital and analog pins Communicating via the serial port By the end of the chapter, you will have created an input interface for your Arduino, using the Serial Monitor to display the data. 2.1 Program Structure In this section, we'll be learning about how to properly structure code using indentations, nested levels, and semicolons. Section Resources: Example Program Structure 2.2 Using Variables In this section, we'll explore the use of variables, which will allow you to write more sophisticated code. Section Resources: Arduino Reference Datatypes: If you're interested in learning more about the various datatypes that Arduino supports, check out the reference page. 2.3 Building Your First Circuit Using a Breadboard In this section, we'll look at using different components such as LEDs, buttons, jumper wires, resistors, and a breadboard to construct a circuit. Section Resources: Further Reading If you'd like to know more about how electronic components work, check out the Analogue Electronics Crash Course and All About LEDs tutorials for more in-depth information. Wiring Diagram 2.4 Using Digital Pins In this section, we'll learn how to use the digital pins to read inputs and control outputs. Section Resources: Source code for 'LED Button' int buttonPin = 2; int ledPin = 3; void setup() { // setup pin modes pinMode(ledPin, OUTPUT); pinMode(buttonPin, INPUT_PULLUP); } void loop() { // read state of buttonPin and store it as the buttonState variable int buttonState = digitalRead(buttonPin); // write the value of buttonState to ledPin digitalWrite(ledPin, buttonState); } Wiring Diagram for 'Digital Pins' 2.5 Using Analogue Pins In this section, we'll learn how to use the analog pins to read inputs and control outputs. Section Resources: Source Code for 'Blink Rate Control' int ledPin = 3; int potPin = A0; void setup() { // setup pin modes pinMode(ledPin, OUTPUT); pinMode(potPin, INPUT); } void loop() { // read the value of the pot and store it as potValue int potValue = analogRead(potPin); // turn led on and wait for the time equal to potValue digitalWrite(ledPin, HIGH); delay(potValue); // re-read the value of the pot and store it as potValue potValue = analogRead(potPin); // turn led off and wait for the time equal to potValue digitalWrite(ledPin, LOW); delay(potValue); } Source Code for 'LED Brightness Control' int ledPin = 3; int potPin = A0; void setup() { // setup pin modes pinMode(ledPin, OUTPUT); pinMode(potPin, INPUT); } void loop() { // read the value of the pot, divide it by 4, and store it as potValue int potValue = analogRead(potPin) / 4; // turn led on with the value of potValue analogWrite(ledPin, potValue); } Wiring Diagram for 'Analogue Pins' 2.6 Displaying Information Using the Serial Port In this section, we'll be looking at using the serial port on the Arduino to communicate with a computer via USB. Section Resources: Source Code for 'Serial Monitoring' int ledPin = 3; int buttonPin = 2; int potPin = A0; void setup() { // setup pin modes pinMode(ledPin, OUTPUT); pinMode(buttonPin, INPUT_PULLUP); pinMode(potPin, INPUT); // initialise serial port with baud rate of 9600 Serial.begin(9600); } void loop() { // read the state of buttonPin and store it as buttonState (0 or 1) int buttonState = digitalRead(buttonPin); // read the value of the pot, divide it by 4, and store it as potValue int potValue = analogRead(potPin); int filteredPotValue = potValue / 4; // turn led on with the value of potValue analogWrite(ledPin,filteredPotValue); // print the value of the button Serial.print("Button: "); Serial.print(buttonState); Serial.print(" "); // print the value of the pot Serial.print("Pot: "); Serial.print(potValue); Serial.print(" "); // print the value of the pot / 4 with a line return at the end Serial.print("Pot/4: "); Serial.println(filteredPotValue); } Wiring Diagram for 'Serial Reading' Chapter 3: Decision Making and Using Logic 3.0 Chapter Overview In this chapter you'll learn about: Using 'If' statements Using 'while' loops Using 'for' loops Using 'Switch cases' Using maths in Arduino Creating functions Creating sophisticated code By the end of this chapter, you will have created your very own calculator using different functions, loops, and Serial functions. 3.1 'If' Statements In this section, we'll be looking at using 'If' statements, which are the backbone of decision-making for microcontrollers. Section Resources: Source Code for 'Toggle Switch' // pin definitions int ledPin = 3; int buttonPin = 2; // global variables int toggleState; int lastButtonState = 1; long unsigned int lastPress; int debounceTime = 20; void setup() { // setup pin modes pinMode(ledPin, OUTPUT); pinMode(buttonPin, INPUT_PULLUP); } void loop() { int buttonState = digitalRead(buttonPin); //read the state of buttonPin and store it as buttonState (0 or 1) if((millis() - lastPress) > debounceTime) //if the time between the last buttonChange is greater than the debounceTime { lastPress = millis(); //update lastPress if(buttonState == 0 && lastButtonState == 1) //if button is pressed and was released last change { toggleState =! toggleState; //toggle the LED state digitalWrite(ledPin, toggleState); lastButtonState = 0; //record the lastButtonState } if(buttonState == 1 && lastButtonState == 0) //if button is not pressed, and was pressed last change { lastButtonState = 1; //record the lastButtonState } } } Wiring Diagram for 'Digital Pins' 3.2 'While' Loops In this section, you'll learn about using 'while' loops and how to use them to change the structure of your code. Section Resources: Source Code for 'LED Flash Rate' // pin definitions int ledPin = 3; int buttonPin = 2; // global variables int toggleState; int buttonState =1; void setup() { // setup pin modes pinMode(ledPin, OUTPUT); pinMode(buttonPin, INPUT_PULLUP); } void loop() { buttonState = digitalRead(buttonPin); while(buttonState == 0) { toggleState =! toggleState; digitalWrite(ledPin, toggleState); delay(50); buttonState = digitalRead(buttonPin); } toggleState =! toggleState; digitalWrite(ledPin, toggleState); delay(200); } Wiring Diagram for 'LED Flash Rate' 3.3 'For' Loops In this section, you'll look at 'for' loops which you can use to control the flow of your program. Section Resources: Source Code for 'LED Pulse' // pin definitions int ledPin = 3; // global variables int rampTime = 2; void setup() { // setup pin modes pinMode(ledPin, OUTPUT); //initialise serial port Serial.begin(9600); } void loop() { // ramp LED brightness up to max for(int i = 0; i<256; i++) { analogWrite(ledPin, i); delay(rampTime); Serial.println(i); } // ramp LED brightness down to 0 for(int i = 255; i>0; i--) { analogWrite(ledPin, i); delay(rampTime); Serial.println(i); } } Wiring Diagram for 'LED Pulse' 3.4 Using 'Switch' Cases In this section, we'll dive into using 'switch' cases to implement comparative lists and outcomes. Section Resources: Source Code for 'Potentiometer Switch Case' // pin definitions int potPin = A0; // declare global variables int lastPotValue; void setup() { // set pin modes pinMode(potPin, INPUT); //initialise Serial port Serial.begin(9600); } void loop() { // read potPin and divide by 255 to give 5 possible readings int potValue = analogRead(potPin) / 255; // if something has changed since last value if(potValue != lastPotValue) { // enter switch case switch(potValue) { case 0: Serial.println("Very Low"); break; case 1: Serial.println("Low"); break; case 2: Serial.println("Moderate"); break; case 3: Serial.println("High"); break; case 4: Serial.println("Extreme"); break; default: Serial.println("error!"); break; } lastPotValue = potValue; } } Wiring Diagram for 'Potentiometer Switch Case' 3.5 Using Maths In this section, we'll look at how to use different mathematic functions and methods in Arduino. Section Resources: Example for 'Maths Functions' x = y + 3; x = y - 7; x = y * 6; x = y / 4; 3.6 Creating Functions In this section, we'll be learning about using and creating your own functions to write modular, reusable code. Section Resources: Source Code for 'Hypotenuse Calculator' *Update 8/1/18: I've updated the sketch for the hypotenuse calculater which is reflected in the code below. It provides rejection for non-integer values and some extra feedback. void setup() { //initialise Serial port Serial.begin(9600); } void loop() { int a; int b; float result; //print instructions, and wait until there is something in the serial buffer Serial.print("Enter a side value: "); while(!Serial.available()); a = readSerial(); if(a == 0) { return; } Serial.print("Enter the other side value: "); while(!Serial.available()); b = readSerial(); if(b == 0) { return; } findSide(a,b); Serial.println(); } //readSerial takes the next integer in the Serial buffer, clears the buffer, then returns it int readSerial() { int i = Serial.parseInt(); //checks if the received value is a valid integer if(i < 1 || (i%1 != 0)) { Serial.println("That isn't a valid integer"); return 0; } Serial.println(i); Serial.parseInt(); return i; } void findSide(int x, int y) { //calculate C squared by A squared + B squared float hypotenuse = sqrt(x*x + y*y); //print out the result Serial.print("Hypotenuse = "); Serial.println(hypotenuse); } Chapter 4: Data Manipulation and EEPROM 4.0 Chapter Overview In this chapter you'll learn about: Using variables within Arrays Using arithmetic, relational, logical, and assignment operators Manipulating data using bit-wise operators and logic Storing information between resets using EEPROM By the end of this chapter, you will have created an LED sequencing display using arrays, operators, and EEPROM storage. 4.1 Arrays In this section, we'll look at using arrays to store data, which allows for more powerful variable manipulation. Section Resources: Source Code for 'LED Sequencer' int ledArray[] = {2,3,4,5,6,7,8,9}; int delayTime = 50; void setup() { //initialise ledArray as outputs for(int i = 0; i<10; i++) { pinMode(ledArray[i], OUTPUT); } } void loop() { //turn LEDs on from 0-7 for(int i = 0; i <= 7; i++) { digitalWrite(ledArray[i], HIGH); delay(delayTime); } //turn LEDs off from 7-0 for(int i = 7; i >= 0; i--) { digitalWrite(ledArray[i], LOW); delay(delayTime*5); } } Wiring Diagram 4.2 Operators In this section, we're going to look at using arithmetic, relational, logical, and assignment operators. These are all used for comparing and evaluating data. Section Resources: Relation Operators Reference x = 4 y = 6 (x == y) false (x != y) true (x > y) false (x < y) true (x >= y) false (x <= y) true Logical Operators x = 0 y = 1 (x && y) false (x || y) true x = !x x now equals 1 (not 0) Assignment Operators i += 2 same as i = i+2 i -= 2 same as i = i-2 i *= 2 same as i = i*2 i /= 2 same as i = i/2 4.3 Bit Math In this section, you'll be learning about control individual bits within bytes using bit-wise operators and logic. Section Resources: Bitwise Operator Examples /*This section is a logic reference example. This is not valid code and won't compile on your Arduino //AND x = 0011 0100 y = 0101 1101 x & y = 0001 0100 //OR x = 0011 0100 y = 0101 1101 x | y = 0111 1101 //XOR x = 0011 0100 y = 0101 1101 x ^ y = 0110 1001 //NOT x = 0011 0100 ~x = 1100 1011 y = 0101 1101 ~y = 1010 0010 //SHIFT LEFT x = 0011 0100 x << 2 = 1101 0000 y = 0101 1101 y << 2 = 0111 0100 //SHIFT RIGHT x = 0011 0100 x >> 2 = 0000 1101 y = 0101 1101 y >> 2 = 0001 0111 */ Truth Tables Source Code for 'AND, OR, XOR Calculator' const int dataPin = 6; const int clockPin = 7; const int latchPin = 8; byte ledMap = 0b11111111; int delayTime = 3000; void setup() { // put your setup code here, to run once: pinMode(dataPin, OUTPUT); pinMode(clockPin, OUTPUT); pinMode(latchPin, OUTPUT); Serial.begin(9600); shiftWrite(0x00); Serial.println("Enter a number between 0-255"); } void loop() { if(Serial.available()) { int inputVal = Serial.parseInt(); if(inputVal > 255) { Serial.println("Uh oh, try again"); Serial.println("Enter a number between 0-255"); return; } Serial.print("DECIMAL: "); Serial.println(inputVal); Serial.print("BINARY: "); Serial.println(inputVal, BIN); Serial.println(); Serial.print("AND result: "); Serial.println(ledMap & inputVal, BIN); shiftWrite(ledMap & inputVal); delay(delayTime); Serial.print("OR result: "); Serial.println(ledMap | inputVal, BIN); shiftWrite(ledMap | inputVal); delay(delayTime); Serial.print("XOR result: "); Serial.println(ledMap ^ inputVal, BIN); shiftWrite(ledMap ^ inputVal); delay(delayTime); Serial.println(); Serial.println("Enter a number between 0-255"); } } void shiftWrite(byte value) { digitalWrite(latchPin, LOW); shiftOut(dataPin, clockPin, MSBFIRST, value); digitalWrite(latchPin, HIGH); } Wiring Diagram for 'AND, OR, XOR Calculator' 4.4 EEPROM In this section, we'll learn about storing data in the non-volatile memory known as EEPROM. This allows data to be retained when power is disconnected and accessed later. Section Resources: Source Code for 'EEPROM Counter' #include
Electronic Work In Space So in a basic sense, not much really changes, and it's possible, with a bit of work, to use off-the-shelf components to do the same job out in space. However, there's a subtler way in which earth-bound electronics do benefit from Earth's magnetic field. ... Electronics do not need a magnetic field to work . Challenges for Electronic Circuits in Space Applications To set the stage for this discussion let me propose this scenario: imagine yourself as an astronaut sitting in the crew module of the NASA Orion spacecraft. You are stepping through your final equipment checklist for a voyage to Mars while sitting on top of a rocket, anticipating the final countdown to ignition of the largest rocket ever designed—the NASA Space Launch System. You are sitting 384 feet in the air on a massive, 130 metric ton configuration, the most capable and powerful launch vehicle in history. When you hear those famous words “gentlemen, we have ignition,” you will have 9.2 million pounds of thrust propelling you into outer space. The Orion spacecraft is being designed to take humans to Mars and into deep space where the temperature can approach over 2000°C, the radiation is deadly, and you will be travelling at speeds up to 20,000 mph. Now , what quality grade of electronic components were selected for the control systems of your spacecraft? High reliability and devices with space heritage are key factors in the selection of components for space level applications. NASA generally specifies Level 1, qualified manufacturer list Class V (QMLV) devices, and they will always ask if there is a higher quality level available. Knowing the extensive selection process NASA uses for identifying electronic components for space flight applications, one should be confident sitting on top of that rocket. The Harsh Environmental Conditions of a Spacecraft and the Hazards Posed to the Electronics The first hurdle for space electronics to overcome is the vibration imposed by the launch vehicle. The demands placed on a rocket and its payload during launch are severe. Rocket launchers generate extreme noise and vibration. There are literally thousands of things that can go wrong and result in a ball of flame. When a satellite separates from the rocket in space, large shocks occur in the satellite’s body structure. Pyrotechnic shock is the dynamic structural shock that occurs when an explosion occurs on a structure. Pyroshock is the response of the structure to high frequency, high magnitude stress waves that propagate throughout the structure as a result of an explosive charge, like the ones used in a satellite ejection or the separation of two stages of a multistage rocket. Pyroshock exposure can damage circuit boards, short electrical components, or cause all sorts of other issues. Understanding the launch environment provides a greater appreciation for the shock and vibration requirements, and inspections imposed on electronic components designed for use in space level applications. Outgassing is another major concern. Plastics, glues, and adhesives can and do outgas. Vapor coming off of plastic devices can deposit material on optical devices, thereby degrading their performance. For instance, an automobile plastic dashboard can emit vapor that deposits a film on the windshield. This is a practical example I can attest to from personal experience. Using ceramic rather than plastic components eliminates this problem in electronics. Outgassing of volatile silicones in low Earth orbit (LEO) cause a cloud of contaminants around the spacecraft. Contamination from outgassing, venting, leaks, and thruster firing can degrade and modify the external surfaces of the spacecraft. High levels of contamination on surfaces can contribute to electrostatic discharge. Satellites are vulnerable to charging and discharging. For that reason, space applications require components with no floating metal. Satellite charging is a variation in the electrostatic potential of a satellite, with respect to the surrounding low density plasma around the satellite. The extent of the charging depends on the design of the satellite and the orbit. The two primary mechanisms responsible for charging are plasma bombardment and photoelectric effects. Discharges as high as 20,000 V have been known to occur on satellites in geosynchronous orbits. If protective design measures are not taken, electrostatic discharge, a buildup of energy from the space environment, can damage the devices. A design solution used in geosynchronous Earth orbit (GEO) is to coat all the outside surfaces of the satellite with a conducting material. The atmosphere in LEO is comprised of about 96% atomic oxygen. Oxygen exists in different forms. The oxygen that we breathe is O2. O3 occurs in Earth’s upper atmosphere, and O (one atom) is atomic oxygen. Atomic oxygen can react with organic materials on spacecraft exteriors and gradually damage them. Material erosion by atomic oxygen was noted on NASA’s first space shuttle missions, where the presence of atomic oxygen caused problems. Space shuttle materials looked frosty because they were actually being eroded and textured by the presence of atomic oxygen. NASA addressed this problem by developing a thin film coating that is immune to the reaction with atomic oxygen. Plastics are considerably sensitive to atomic oxygen and ionizing radiation. Coatings resistant to atomic oxygen are a common protection method for plastics. Another obstacle is the very high temperature fluctuations encountered by a spacecraft. A satellite orbiting around Earth can be divided into two phases; a sunlit phase and an eclipse phase. In the sunlit phase, the satellite is heated by the Sun and as the satellite moves around the back side or shadow side of the Earth, the temperature can change by as much as 300°C. Because it is closer to the Sun, the temperature fluctuations on a satellite in GEO stationary orbit will be much greater than the temperature variations on a satellite in LEO. It is interesting to note that during lunar day and night, the temperature on the surface of the Moon can vary from around –200°C to +200°C. It makes you wonder how it was even possible for a man to walk on the Moon. Here again, ceramic packages can withstand repeated temperature fluctuations, provide a greater level of hermeticity, and remain functional at higher power levels and temperatures. Ceramic packages provide higher reliability in harsh environments. So how do you dissipate the heat generated by the electronics? The accuracy and life expectancy of electronic devices can be degraded by sustained high temperatures. There are three ways of transferring heat: convective, diffusive, and radiative. In the vacuum of space there is no thermal convection or conduction taking place. Radiative heat transfer is the primary method of transferring heat in a vacuum, so satellites are cooled by radiating heat out into space. The vacuum of space is a favorable environment for tin whiskers, so prohibited materials are a concern. Pure tin, zinc, and cadmium plating are prohibited on IEEE parts and associated hardware in space. These materials are subject to the spontaneous growth of whiskers that can cause electrical shorts. Tin whiskers are electrically conductive, crystalline structures of tin that sometimes grow from surfaces where tin is used as a final finish. Devices with pure tin leads can suffer from the tin whiskers phenomenon that can cause electrical shorts. Using lead-based solder eliminates the risk of shorts occurring when devices are used in high stress applications. Finally, the space radiation environment can have damaging effects on spacecraft electronics. There are large variations in the levels of and types of radiation a spacecraft may encounter. Missions flying at low Earth orbits, highly elliptical orbits, geostationary orbits, and interplanetary missions have vastly different environments. In addition, those environments are changing. Radiation sources are affected by the activity of the Sun. The solar cycle is divided into two activity phases: the solar minimum and the solar maximum. Will your spacecraft mission occur during a solar minimum, a solar maximum period, or both? The key point here is that there are vastly different environments in space. The requirements for a launch vehicle are much different from that of a geostationary satellite or a Mars rover. Each space program has to be evaluated in terms of reliability, radiation tolerance, environmental stresses, the launch date, and the expected life cycle of the mission. Analog Devices has been supporting the aerospace and defense markets for over 40 years with high reliability devices. Areas of focus are electronic warfare, radar, communications, avionics, unmanned systems, and missile and smart munitions applications. Today’s focus is on the space market. Analog Devices has the depth and breadth of technologies that spans the complete signal chain from sensors, amplifiers, RF and microwave devices, ADCs, DACs, and output devices that provide solutions to the challenging requirements of the aerospace and defense industry. The satellite industry’s revenue was $208 billion in 2015. There are four segments to the satellite industry: satellite manufacturing, satellite launch equipment, ground-based equipment, and satellite services. Satellite services is by far the largest segment and continues to be a key driver for the overall satellite industry. So, what has a satellite done for you lately? I believe most people would be surprised at just how much modern life depends on satellites services. If the 1381 satellites currently in operation happen to shut down, modern life would be significantly disrupted. Global finance, telecommunications, transportation, weather, national defense, aviation, and many other sectors rely heavily on satellite services. There are three primary segments in the satellite services market: satellite navigation, satellite communications, and Earth observation. Navigation satellites are used for the global distribution of navigation signals and data in order to provide positioning, location, and timing services. Examples of available services are traffic management, surveying and mapping, fleet and asset management, and autonomous driving technology—driverless cars and trucks are expected to be the next big thing. Telecommunication satellites or SATCOM examples are television, telephone, broadband internet, and satellite radio. These systems can provide uninterrupted communications services in the event of disasters that damage ground-based telecommunication networks. Both business and commercial aircraft in-flight internet and mobile entertainment are growing segments of the market. Earth observation satellites are used for the transmission of environmental data. Space-based observations of the Earth promote sustainable agriculture and aid in the response to climate change, land and wildlife management, and energy resources management. Earth observation satellites aid in the safeguard of water resources and improve weather forecasts, so there is a very wide and growing range of satellite services. So what types of electronic systems are used on satellites? The basic elements of a spacecraft are divided into two sections: the platform or bus and the payload. The platform consists of the five basic subsystems that support the payload: the structural subsystem, the telemetry subsystem, tracking and command subsystems, the electric power and distribution subsystem, the thermal control subsystem, and the attitude and velocity control subsystem. The structural subsystem is the mechanical structure and provides stiffness to withstand stress and vibration. It also provides shielding from radiation for the electronic devices. The telemetry, tracking, and command subsystems include receivers, transmitters, antennas, sensors for temperature, current, voltage, and tank pressure. It also provides the status of various spacecraft subsystems. The electric power and distribution subsystems convert solar into electrical power and charge the spacecraft batteries. The thermal control subsystem helps to protect electronic equipment from extreme temperatures. And finally, the attitude and velocity control subsystem is the orbit control system that consists of sensors to measure vehicle orientation and actuators (reaction wheels, thrusters), and to apply the torques and forces needed to orient the vehicle in the correct orbital position. Typical components of the attitude and control system include Sun and Earth sensors, star sensors, momentum wheels, inertial measurement units (IMUs), and the electronics required to process the signals and control the satellites position. The payload is the equipment in support of the primary mission. For GPS navigation satellites, this would include atomic clocks, navigation signal generators, and high power RF amplifiers and antennas. For telecommunications systems, the payload would include antennas, transmitters and receivers, low noise amplifiers, mixers and local oscillators, demodulator and modulators, and power amplifiers. Earth observation payloads would include microwave and infrared sounding instruments for weather forecasting, visible infrared imaging radiometers, ozone mapping instruments, visible and infrared cameras, and sensors. The integration of Analog Devices and Hittite Microwave a few years ago now allows us to cover the dc to 110 GHz spectrum. ADI solutions range from navigation, radar, communication systems below 6 GHz, satellite communications, electronic warfare, radar systems in the microwave spectrum, radar systems, and satellite imaging in the millimeter wave spectrum. Analog Devices offers more than 1000 components covering all RF and microwave signal chains and applications. The combination of Hittite’s full spectrum of RF function blocks, attenuators, LNAs, PAs, and RF switches, in conjunction with Analog Devices portfolio of high performance linear products, high speed ADCs, DACs, active mixers, and PLLs can provide end-to-end system solutions. The Natural Space Radiation Environment Effects on Electronic Devices The radiation effects on electronic devices are a primary concern for space level applications. Outside the protective cover of the Earth’s atmosphere, the solar system is filled with radiation. The natural space radiation environment can damage electronic devices and the effects range from a degradation in parametric performance to a complete functional failure. These effects can result in reduced mission lifetimes and major satellite system failures. The radiation environment close to Earth is divided into two categories: particles trapped in the Van Allen belts and transient radiation. The particles trapped in the Van Allen belts are composed of energetic protons, electrons, and heavy ions. The transient radiation consists of galactic cosmic ray particles and particles from solar events (coronal mass ejections and solar flares). There are two primary ways that radiation can effect satellite electronics: total ionizing dose (TID) and single event effects (SEEs). TID is a long-term failure mechanism vs. SEE, which is an instantaneous failure mechanism. SEE is expressed in terms of a random failure rate, whereas TID is a failure rate that can be described by a mean time to failure. Sources of ionizing radiation in interplanetary space TID is a time dependent, accumulated charge in a device over the lifetime of a mission. A particle passing through a transistor generates electron hole pairs in the thermal oxide. The accumulated charges can create leakage currents, degrade the gain of a device, affect timing characteristics, and, in some cases, result in complete functional failure. The total accumulated dose depends on the orbit and time. In LEO, the main source of radiation is from electrons and protons (inner belt) and in GEO, the primary source is from electrons (outer belt) and solar protons. It is worth noting that device shielding can be used to effectively reduce the accumulation of TID radiation. SEEs are caused by a single, high energy particle passing through a device and injecting a charge in the circuit. Typically, SEEs are divided into soft errors and hard errors. The Joint Electron Device Engineering Council (JEDEC) defines soft errors as nondestructive, functional errors induced by energetic ion strikes. Soft errors are a subset of SEEs and includes single event upsets (SEUs), multiple-bit upsets (MBUs), single event functional interrupts (SEFIs), single event transients (SETs), and single event latch-up (SEL). A SEL is where the formation of parasitic bipolar action in CMOS wells induces a low impedance path between power and ground, producing a high current condition. Therefore, a SEL can cause latent and hard errors. Examples of soft errors would be bit flips or changes in the state of memory cells or registers. A SET is a transient voltage pulse generated by a charge injected into the device from a high energy particle. These transient pulses can cause SEFIs. SEFIs are soft errors that cause the component to reset, lock-up, or otherwise malfunction in a detectable way, but does not require power cycling of the device to restore operability. A SEFI is often associated with an upset in a control bit or register. JEDEC defines a hard error as an irreversible change in operation that is typically associated with permanent damage to one or more elements of a device or circuit (for example, gate oxide rupture, or destructive latch-up events). The error is hard because the data is lost and the component or device no longer functions properly, even with a power reset. SEE hard errors are potentially destructive. Examples of hard errors are single event latch-up (SEL), single event gate rupture (SEGR), and single event burnout (SEB). SEEs hard errors can destroy the device, drag down the bus voltage, or even damage the system power supply. Technology Trends and Radiation Effects In terms of the satellite payload, instruments are becoming more complex. At one time communication satellites were basically bent pipe repeater architectures that would relay signals. Today they are multibeam and have on-board processing (OBP) architectures. More complex electronics translate into greater risk from radiation effects. High volume, small satellite constellations are using more commercial grade plastic components. Commercial off-the-shelf (COTS) devices generally tend to be more sensitive to radiation effects. Also with small satellite, there is less structural mass shielding the electronics. With finer IC geometries and thinner oxides, the sensitivity to TID radiation effects is reduced, and the TID tolerance is improved. On the other hand, SEEs increase with reduced IC scaling. Less energy is required to produce SET and SEU. With higher frequency devices, SETs can turn into more SEUs, increasing the number of SEFIs. Mitigation techniques used to address higher speed transient signals can be more challenging. Analog Devices’ Efforts in Support of Space Level Applications The space products group leverages Analog Devices’ portfolio of devices in the support of the space industry. We have proprietary silicon on insulator (SOI) processes that provide radiation tolerance for space level applications. In some cases we modify core silicon to enhance the radiation tolerance of devices. We also have the ability to port designs over to radiation hardened SOI processes. We integrate the die into hermetic, ceramic packages and characterize the device over the extended military temperature range. We target the development and release of fully qualified, Class S QMLV products using the defense logistics agency (DLA) MIL-PRF 38535 system for monolithic devices, and MIL-PRF 38534 for Class K hybrid and multichip modules. For radiation inspection we currently offer high dose rate (HDR) and low dose rate (LDR) tested models and for new product releases we offer single event effects test data. Analog Devices offers commercial, industrial, enhance products (EPs), automotive, military, and space qualified devices. EP devices are designed to meet mission critical and high reliability applications, primarily in the aerospace and defence market. Other product grades include military grade monolithic devices, multichip modules, QMLQ and QMLH devices, space qualified monolithic devices, and multichip modules designed under military specifications as QMLV and QMLK devices. Analog Devices also offers space qualified Class K die for customers who are developing hybrid or multichip modules solutions. Class K qualified die are offered against standard aerospace data sheets and customer source control drawings. We offer EPs, plastic encapsulated devices designed to meet mission critical requirements, and high reliability application requirements. With customer input, we are initiating a new device product category for space applications that we have defined as enhanced products plus (EP+) devices. Our customers are requiring improvements in size, weight, power, higher performance, wider bandwidths, increased operational frequencies, payload flexibility, and optimized reliability. Spacecraft designers are being pressed to use commercial devices in order to meet high levels of performance in increasingly smaller, lower power, and lower cost spacecraft. The internet in the sky is a good example. It is estimated that 60% of the world’s population does not have access to the internet. To address this market, companies are planning to deploy large constellations of small, low cost satellites circling the Earth that will enable access to a worldwide communication network. Analog Devices is working with customers to define EP+ to address this evolving new market. EPs provide COTS solutions for high reliability applications with no additional cost of custom upscreening. EPs are plastic encapsulated devices released with a military temperature range of –55°C to +125°C. In addition to requiring an extended temperature range, EP customers require devices to be lead free and whisker free. They require devices with a controlled manufacturing baseline, a standalone data sheet, and an EP change notification process. These devices also have an associated V62 vendor item drawing under the defense logistics agency documentation system. Currently released EPs are identified by a special EP suffix and have a separate standalone data sheet. As noted, Analog Devices is also developing a new device concept for space level applications EPs, plus for LEO systems and high altitude applications. We currently support EP+ against source control drawings. ADI would like to offer a standard COTS grade device for space level applications. With the EP+ approach we envision a device somewhere between standard EP devices and military 883-grade devices, providing COTS solutions for space level applications without additional cost of custom upscreening. With the EP+ approach, we can generate COTS devices and provide wafer lot traceability and lot specific radiation inspection data. The key issue is determining the proper balance between reliability and cost as depicted in the curve in Figure 1. The more screening required, the higher the unit cost. In defining this new product category, the current challenge for the satellite industry and for Analog Devices is to define the optimum screening level vs. cost point for commercial devices used in space level applications. Figure 1. Reliability test and inspections drive electronic component cost. To summarize—Analog Devices’ goal is to deliver a complete product for space level applications and not just a component. We offer the industry’s most comprehensive portfolio with industry-leading device reliability We provide single lot date code procurement Advanced packaging and characterization to meet harsh environmental challenges Gold and tin lead hot solder dip lead finishes to address tin whiskers We provide no prohibited materials certification Comprehensive certificates of conformance with material traceability Comprehensive QMLV flight unit test reports Electrical performance is production tested over the extended temperature ranges –55°C to +125°C We offer fully qualified QMLV devices with 100% screening and quality conformance inspection We provide radiation qualified devices … HDR, LDR, SEE Long product life cycles are a cornerstone of ADI’s business strategy We have a dedicated aerospace and defense team for product support and applications support Analog Devices currently offers over 90 standard generic space qualified devices with greater than 350 models in different grades and packages. A few of the new featured space qualified products are the ADA4084-2S, ADA4610-2S, and ADuM7442S devices. The 5962R1324501VXA (ADA4084AF/QMLR) is a new low noise, low power, space qualified precision amplifier offered as QMLV space qualified device available against a SMD drawing. The device has 10 MHz unity-gain bandwidth and rail-to-rail inputs and outputs. These amplifiers are excellent for single-supply applications requiring both ac and precision dc performance. The 5962R1420701VXA (ADA4610-2BF/QMLR) are space qualified, dual-channel, precision, very low noise, low input bias current wide bandwidth JFET devices. The amplifiers are especially suited for high impedance sensor amplification and precise current measurements. The ADuM7442R703F is a space qualified 25 Mbps, quad-channel digital isolator with three forward and one reverse channel. The devices offer bidirectional communications. The space qualified devices offer galvanic isolation, which means that the input and output circuits have no direct electrical connection. They offer advantages in size, weight, power, and reliability over competing solutions. Analog and Digital Circuits Analog Electronics Most of the fundamental electronic components -- resistors, capacitors, inductors, diodes, transistors, and operational amplifiers -- are all inherently analog. Circuits built with a combination of solely these components are usually analog. Analog circuits are usually complex combinations of op amps, resistors, caps, and other foundational electronic components. This is an example of a class B analog audio amplifier. Analog circuits can be very elegant designs with many components, or they can be very simple, like two resistors combining to make a voltage divider. In general, though, analog circuits are much more difficult to design than those which accomplish the same task digitally. It takes a special kind of analog circuit wizard to design an analog radio receiver, or an analog battery charger; digital components exist to make those designs much simpler. Analog circuits are usually much more susceptible to noise (small, undesired variations in voltage). Small changes in the voltage level of an analog signal may produce significant errors when being processed. Digital Electronics Digital circuits operate using digital, discrete signals. These circuits are usually made of a combination of transistors and logic gates and, at higher levels, microcontrollers or other computing chips. Most processors, whether they're big beefy processors in your computer, or tiny little microcontrollers, operate in the digital realm. Digital circuits make use of components like logic gates, or more complicated digital ICs (usually represented by rectangles with labeled pins extending from them). Digital circuits usually use a binary scheme for digital signaling. These systems assign two different voltages as two different logic levels -- a high voltage (usually 5V, 3.3V, or 1.8V) represents one value and a low voltage (usually 0V) represents the other. Although digital circuits are generally easier to design, they do tend to be a bit more expensive than an equally tasked analog circuit. Analog and Digital Combined It's not rare to see a mixture of analog and digital components in a circuit. Although microcontrollers are usually digital beasts, they often have internal circuitry which enables them to interface with analog circuitry (analog-to-digital converters, pulse-width modulation, and digital-to-analog converters. An analog-to-digital converter (ADC) allows a microcontroller to connect to an analog sensor (like photocells or temperature sensors), to read in an analog voltage. The less common digital-to-analog converter allows a microcontroller to produce analog voltages, which is handy when it needs to make sound. Resources and Going Further Now that you know the difference between analog and digital signals, we'd suggest checking out the Analog to Digital Conversion tutorial. Working with microcontrollers, or really any logic-based electronics, means working in the digital realm most of the time. If you want to sense light, temperature, or interface a microcontroller with a variety of other analog sensors, you'll need to know how to convert the analog voltage they produce into a digital value. Also, consider reading our Pulse Width Modulation (PWM) tutorial. PWM is a trick microcontrollers can use to make a digital signal appear to be analog. Here are some other subjects which deal heavily with digital interfaces: Binary Logic Levels Serial Communication SPI Communication I2C Communication IR Communication Or, if you'd like to delve further into the analog realm, consider checking out subject : Voltage Dividers Resistors Diodes Capacitors Transistors electronic reliability in space Components for new space systems must still meet requirements for radiation tolerance and electrical, thermal, and mechanical reliability. However, a new class of space-plastic–grade ICs can provide cost and size benefits compared to traditional “full space” components for lower-altitude missions. For the next 40-plus years, the consequences of losing any spacecraft to electronics failure were generally catastrophic. It goes without saying that manned space missions have always carried the highest priority for safety to protect their priceless passengers. But the costs of building unmanned satellites soared into the hundreds of millions of dollars, even exceeding the billion-dollar level for advanced government satellite programs. Satellites became critical to many facets of everyday life: for television viewing, weather forecasting, navigation, and, of course, military uses. The cost of launching was so high that only a few countries could afford the endeavor. With such astronomical (pun intended) consequences of failure, government spaceflight organizations and spacecraft manufacturers created requirements and standards to ensure the robustness of electronic components in space. You may hear spacecraft engineers refer to such components as triple-E parts, which is shorthand for electrical, electronic, and electromechanical components. Manufacturers typically implemented specifications by creating device-specific source control drawings (SCDs), which focused on testing integrated circuits (ICs) for radiation performance, operating life, thermal performance, and mechanical resistance to forces endured during launch. A common mission profile for SCDs was based on 15 years of operation in geosynchronous Earth orbit (GEO), approximately 36,000 km above Earth. That’s quite a change from those first rockets, which flew just above 100 km for only a few minutes! Mil standards By 1995, the U.S. government (namely, the Department of Defense) had released the MIL-PRF-38535 standard, which created consistent qualification, testing, and reliability standards for military and space ICs. MIL-PRF-38535 defines requirements for IC manufacturers if they wish to be listed on a qualified manufacturer list (QML), along with requirements for ICs to qualify to specific classes. Classes M, N, and Q are intended for terrestrial applications, while Class V is defined for space applications, requiring hermetically sealed packaging. Class V devices are typically tested for radiation tolerance during development and are not radiation-tested in production. MIL-PRF-38535 defines an additional quality level — radiation hardness assured (RHA) — that requires the screening of each production lot of an IC to meet a specified radiation performance level (more on radiation performance in a minute). Radiation-tolerant ICs that meet QML Class V requirements are often referred to as QMLV devices, while devices that also meet the RHA specifications are called QMLV-RHA or, simply, RHA. In 2012, MIL-PRF-38535 was revised to add a Class Y, covering non-hermetically sealed, high-pin-count land-grid-array– and column-grid-array–packaged devices. Since the creation of the QMLV designation, designers of high-value, mission-critical spacecraft have come to rely on QMLV and RHA ICs to ensure mission success. The high level of quality and reliability of these components results in a higher cost, but in the intended application, the cost can be justified due to the level of risk mitigation needed. Cost factors In recent years, changes in a number of factors have combined to reduce the cost of access to space. Both scientific and commercial organizations have shown that lower-cost small satellites (smallsats) can also be of value alongside the traditional “big birds” deployed for long-life missions. Smallsats in low Earth orbit (LEO) have provided useful data on a variety of scientific Earth observation missions, with mission lives as short as a week. It is now possible for researchers, entrepreneurs, and students to get a smallsat into LEO at a relatively low cost. Commercial launch operators also offer “ride-sharing” for smallsats on launches in which the primary mission is for a larger satellite. NASA and its commercial partners deliver smallsats to the International Space Station (ISS) aboard re-supply missions, wherein the satellites are then deployed into space by astronauts living onboard the ISS. This new array of satellite missions has given rise to a much wider variation in risk tolerance and cost sensitivity compared to traditional missions. Engineers designing smallsats for LEO missions with shorter mission durations and lower-cost targets have begun to use commercial-off-the-shelf (COTS) ICs, which receive no special screening from manufacturers to address the hazards of spaceflight. These COTS ICs are encapsulated in plastic packaging, which reduces their size compared to the hermetically sealed ceramic packages of space-grade components, and have electrical performance benefits. However, the use of COTS components can expose a mission to significant risks, and selecting, screening, and testing ICs to mitigate these risks can end up costing many times more than the ICs themselves. Another term used to refer to plastic-packaged ICs used in space is plastic encapsulated microcircuits (PEMs). PEMs may be COTS or specially screened or tested. There has also been interest in using automotive-qualified, or AEC-Q100 (“Q1” for short), grade parts in space. While these devices receive additional testing and qualification compared to commercial ICs, these tests are focused more on the terrestrial environment than the extreme environment of space. The use of COTS and Q1 ICs can also require compromises in system design and operational readiness when the radiation hardness and other reliability factors of the components are not well-controlled. Due to the desire for ICs to deliver the necessary quality and reliability for shorter, lower-altitude missions at a lower cost point compared to QMLV devices, a number of IC suppliers have introduced new grades of IC, which fit between COTS and space grade (QMLV) from a cost perspective. These “new space” or “space plastic” ICs use plastic packaging but undergo significant additional testing and qualification compared to COTS and Q1 devices. Fig. 1compares COTS and Q1 ICs to high-reliability parts. Fig. 1: Comparison of different reliability grades from Texas Instruments. Next, We’ll discuss the risks of COTS and Q1 ICs in space and how the enhanced quality and reliability of space plastic ICs can enable success for shorter LEO smallsat missions. Radiation The tragic story of Telsat underscored the need to address radiation performance in space-borne electronics. If you don’t have (or plan to get) a Ph.D. in nuclear physics, you can use a couple of analogies to understand radiation effects on electronics. I’ll categorize effects into two primary categories: total dose effects and single-event effects (SEEs). Consider total dose effects analogous to sunburn: The longer a spacecraft is in space and the farther it is from Earth, the higher the total dose received and the resulting sunburn. Engineers quantify radiation effects like this as total ionizing dose (TID), measured in units of kilorads (krad). SEEs are more like a lightning strike: The probability of an occurrence at any moment is low, but the longer a spacecraft is out in the “thunderstorm” of space, the more likely it is to be struck by a highly energetic particle that can cause failure. The sensitivity of an electronic component to SEEs is measured as a quantity called linear energy transfer, which is the energy transferred from a particle to a substance measured in units of MeV∙cm2/mg. A particular type of SEE that designers are particularly concerned with is single-event latchup (SEL), which is a high-current condition that can destroy an IC quickly. We can “thank our lucky stars” that Earth’s magnetic field protects our earthbound electronics and delicate bodies from the harsh radiation environment of space. Traditional space-grade (QMLV and RHA) ICs have been designed, qualified, and tested to meet all specifications to TID levels as high as 1 Megarad (Mrad). For the sake of comparison, an unshielded satellite in GEO could absorb a TID of over 20 Mrad in just one year. In practice, shielding satellites can drastically reduce the dosage, but long-life GEO missions typically look for ICs with ratings of at least 100 krad. In contrast, the same unshielded satellite in LEO would absorb only about 100 krad in a year. While smallsats in LEO cannot typically support heavy shielding, the shorter mission profiles mean that TID requirements of 10–30 krad are often sufficient for these applications. Beyond defining the necessary radiation tolerance level, there are two primary challenges when trying to use a COTS IC for spaceflight: measuring the device’s radiation tolerance and potential variation in that tolerance. Testing ICs for radiation tolerance can be an expensive and time-consuming process due to the specialized radiation test equipment required. For SEE testing, there are only two cyclotrons in the entire U.S. with the heavy-ion beam capability to test devices for spaceflight cost-effectively. Sometimes, engineers can find radiation test data from academic studies or third-party testing. Such test data may be less accurate than testing by an IC manufacturer. Plus, researchers and third parties typically don’t have access to hidden test modes and may not fully understand the proper operation, specifications, and testing of the device. Second, the lot-to-lot variation of the radiation tolerance of an IC can be huge. It has been shown numerous times that the radiation performance of a particular IC can vary greatly from one wafer fabrication lot to another. Today’s high-volume semiconductor wafer fabs are great at controlling electrical parameters but do not control for radiation performance. For example, National Semiconductor’s space-grade LM108 operational amplifier could produce a lot rated to 100 krad one month and have another lot fail at 30 krad the next month. For this reason, radiation lot acceptance testing (RLAT) has been a fundamental pillar of manufacturing ICs for space since the days of SCDs. COTS ICs, even within a single reel, can come from different wafer lots, even different wafer fab factories, yielding drastic swings in radiation tolerance. Flexibility in wafer supply is a benefit for commercial applications but a risk for space missions. Space-plastic–grade components will go through at least one-time radiation testing by the manufacturer to ensure the validity of the radiation performance and eliminate ICs unsuitable for spaceflight. The TID specification varies by manufacturer but typically targets a TID of 30 krad and single-event latchup immunity to 40 MeV∙cm2/mg, in line with radiation levels within LEO. Texas Instruments’ space-enhanced product line goes the extra mile by undergoing RLAT to 20-krad TID in every production lot, in addition to a one-time characterization to 30 krad. In addition, space plastic products are manufactured within a single controlled baseline, which means one wafer fab, one assembly site, and one material set, and greatly reduces sources of variability. Mechanical and thermal concerns In the extreme environment of space, electronic systems are subjected to extreme temperatures and associated thermal cycles, which cause mechanical stress on ICs and their packages. In LEO, satellites orbit the earth at least 12 times a day, passing from the extreme heat of direct sunlight to the extreme cold of darkness in space. This can result in thermal gradients of over 3°C (5.5°F) per minute, even inside the relatively temperature-controlled internal volume of a spacecraft. Components can be subjected to temperatures as low as –55°C (–67°F) and as high as 125°C (257°F). These thermal conditions can induce a number of different failure modes, including package and die cracking, bond-wire breakage, moisture ingress, die delamination, tin whisker growth, and solder-joint failure. Low-cost packaging materials used in COTS components are susceptible to all of these failures, while space plastic ICs utilize enhanced-reliability material sets and undergo specialized testing to ensure robustness. Because of the reliability concerns associated with lead (Pb)-free solder, the military and aerospace industries have been allowed to continue using tin-lead (SnPb) solder. When a typical commercial Pb-free solder ball is combined with SnPb solder, reflow temperature mismatch and insufficient mixing of the two types of solder can create voiding and a solder joint too fragile to withstand board- and system-level temperature cycling and vibration. For ball-grid-array (BGA) packages in space-plastic–grade ICs, SnPb solder balls are used to eliminate the risk of incompatibility within the SnPb solder profile. Typical commercial ICs are tested only under thermal/moisture testing such as temperature cycling and highly accelerated stress testing (HAST) at the time of development, whereas space plastic ICs typically undergo temperature cycle and HAST lot acceptance continuously throughout production. This practice ensures that any anomalies in package performance can be contained before reaching the customer. It is possible to select packaging materials like die attach epoxy, mold compound, leadframe, and bond wire for robustness. Typically, formulations of die attach and mold compounds are proprietary to the manufacturer, but there are clear variations across the industry. Space plastic IC makers should select the highest-performing compounds regardless of cost. A failure mode of particular concern in harsh environments is delamination, wherein the silicon die separates from the package leadframe, and can lead to performance degradation or, in extreme cases, all-out failure of the die. IC package leadframes can have varying performance with respect to cracking and die delamination. One well-studied technique to improve resistance to die delamination is roughening. This increases the adhesion of the die to the leadframe in conjunction with the correct die attach compound. Roughening adds cost to leadframe manufacturing and, therefore, is not commonly used in the manufacturing of COTS ICs, but it is standard practice for space plastic ICs. Bond wires can also be a source of failure for ICs in spaceflight. While copper (Cu) bond wire is well-proven in multiple terrestrial applications, and ongoing process improvements have resulted in increased uniformity and improved overall field defect parts per million, spacecraft manufacturers and government organizations still have concerns about the use of Cu wire in space components. A few key issues identified with Cu wire bonds are: Bond integrity issues with Cu wire bonding to aluminum bond pads Corrosion due to mold compound interaction or moisture ingress Bond-wire neck breaks due to coefficient of thermal expansion mismatch during temperature cycling While many COTS ICs are manufactured with low-cost Cu wire, space plastic components are manufactured with gold wire, which has been proven in high-reliability applications. Tin (Sn) whisker growth is a widely studied phenomenon in the aerospace industry and can be observed in ICs in leaded packages that have an Sn-based lead finish. Space plastic IC makers ensure that matte-Sn and other high-Sn content lead finishes are not used on such components. For BGA packages, many commercial IC manufacturers moved to high-Sn content solder in order to eliminate Pb-based solder balls, which is a government requirement for commercial applications. Outgassing Outgassing is the release of gas from any material and has been demonstrated in numerous mold compounds used in plastic IC packaging. While this phenomenon has not typically been an issue for terrestrial applications, it can be of particular concern in space. The vacuum environment of space can increase the amount of outgassing compared to atmospheric conditions on Earth. Furthermore, in spacecraft, gases released from IC packages and other sources can condense during extreme cold, creating reduced image quality on optical sensors or other moisture-related failures. NASA began testing materials for outgassing in 1967 and developed the American Society for Testing and Materials E595 specification, which requires that collected volatile condensable materials are less than 0.1% and the total mass loss is less than 1% after vacuum testing. In order to eliminate risk from outgassing in space applications, space plastic ICs use low-outgassing mold compounds that meet NASA requirements. Summary Efforts to ensure the quality and reliability of electronics in spacecraft have continued to evolve since the initial failure of Telstar. The evolution of the spaceflight industry has recently created an opportunity to use electronic components without the full testing and qualification of traditional QMLV components. However, components for these new space systems must still meet mission requirements for radiation tolerance and electrical, thermal, and mechanical reliability. The new class of space-plastic–grade ICs can provide cost and size benefits compared to traditional “full space” components while still contributing to the success of shorter, lower-altitude missions. Space Is Opening Up for Electronics Design This Special Project on Space Electronics seeks to help make the opportunities in space electronics more accessible by introducing these technologies and design experiences. It starts by discussing the trends and opportunities from this new era in space electronics. It then goes on to provide insights into the design challenges, best practices, tools, and components of electronics design for a space environment. A new era in Space Electronics The development of reusable rockets is lowering barriers to both scientific and commercial exploration of space, stimulating increasing interest and investment in space electronics. This Special Project provides designers with a look at the technologies and design practices needed for creating space-worthy electronic designs. These may include, but not be limited to ICs, ASICs, flex-cable, connectors, thermal management for electronics, Rad hard techniques, space-related testing methods, Apollo 1960s electronics and more. EMC in space: The James Webb space telescope Testing for EMC on a spacecraft isn't unlike testing for terrestrial equipment, except for the fact that spacecrafts live in a different electromagnetic environment. The convergence of traditional and new space electronics solutions A hybrid approach allows a design team to implement a rad-hard functional base in conjunction with the latest state-of-the-art COTS technologies. AI and Machine Learning: Shaking up the space industry Today’s increasingly ambitious mission requirements are demanding higher levels of autonomy and greater navigational precision from spacecraft, requiring more than logic-based AI. High-precision space navigation to small comets and asteroids; entry, descent and landing (EDL) on moons and planets; and, rendezvous and proximity operations (RPO) with both cooperative and uncooperative targets all need sensing and perception capabilities provided by vision-based systems. Changing trends in designing space electronics Space electronics has moved-on considerably from the bespoke, radiation-hardened guidance computer and hand-woven memories used on the Apollo missions. Today's avionics are millions of times more powerful than that used to land man on the moon! Safe and Affordable Space Travel Starts With Sourcing Commercial space tourism is on the rise, at a fraction of its predecessor’s cost, creating a cause for passenger safety concerns. One crucial aspect of space flight safety is radiation shielding and mitigation, which New Space ventures have not thoroughly addressed in the past. Traditional space radiation mitigation strategies are costly, yet New Space mitigation techniques may not be suitable for safety critical missions. A solution to this cost-safety tradeoff is Sub-QML hardware electronic devices, which are radiation-hardened by design, yet available at a lower price point due to reduced screening levels. Mission Critical Space Flight Systems Stay Rad Hard To understand the effects of radiation on electronic systems and components, we explore the effects of various space radiation environments and their impact on commercial “New Space” Decrease time to market and cost for the newspace market by using radiation-tolerant solutions based on COTS devices ATmegaS64M1 MCU allows customers to begin development with a commercial device before moving to a pinout compatible, qualified radiation-tolerant version Developing radiation-hardened systems for space applications has a history of long lead times and high costs to achieve the highest level of reliability for multi-year missions in a harsh environment. NewSpace and other critical aerospace applications require faster development and reduced costs. To meet these needs, a new microcontroller (MCU) that combines specified radiation performance with low-cost development associated with Commercial Off-The-Shelf (COTS) devices is now available from Microchip Technology Inc. (NASDAQ: MCHP). The ATmegaS64M1 is the second 8-bit megaAVR® MCU from Microchip that uses a development approach called COTS-to-radiation-tolerant. This approach takes a proven automotive-qualified device, the ATmega64M1 in this case, and creates pinout compatible versions in both high-reliability plastic and space-grade ceramic packages. The devices are designed to meet radiation tolerances with the following targeted performances: Fully immune from Single-Event Latchup (SEL) up to 62 MeV.cm²/mg No Single-Event Functional Interrupts (SEFI) which secure memory integrity Accumulated Total Ionizing Dose (TID) between 20 to 50 Krad(Si) Single Event Upset (SEU) characterization for all functional blocks The new device joins the ATmegaS128, a radiation-tolerant MCU that has already been designed into several critical space missions including a Mars exploration plus a megaconstellation of several hundred Low Earth Orbit (LEO) satellites. The ATmega64M1 COTS device, along with its full development toolchain including development kits and code configurator, can be used to begin development of hardware, firmware and software. When the final system is ready for the prototype phase or production, the COTS device can be replaced with a pin-out compatible, radiation-tolerant version in a 32-lead ceramic package (QFP32) with the same functionality as the original device. This leads to significant cost savings while also reducing development time and risk. “Our COTS-to-radiation-tolerant approach results in a no-compromise, space-grade component and not merely an up-screened or enhanced device that’s targeted to the aerospace industry,” said Patrick Sauvage, director of Microchip’s aerospace business unit. “Developing with a COTS device that can be swapped out for a fully functional high-rel plastic or ceramic equivalent with the same pinout reduces development time, costs and risk for our customers.” The ATmegaS64M1 meets the high operating temperature range of -55° C to +125° C. It is the first COTS-to-radiation-tolerant MCU to combine a Controller Area Network (CAN) bus, Digital-to-Analog Converter (DAC) and motor control capabilities. These features make it ideal for a variety of subsystems like remote terminal controllers and data handling functions for satellites, constellations, launchers or critical avionic applications. For more information visit www.microchip.com/ATmegaS64M1. Development Support To ease the design process and accelerate time to market, Microchip offers the STK 600 complete development board for the ATmegaS64M1, giving designers a quick start to develop code with advanced features for prototyping and testing new designs. The device is supported by Atmel Studio Integrated Development Environment (IDE) for developing, debugging and software libraries. Availability and Packaging The devices are available today for sampling and volume production in four derivatives: ATmegaS64M1-KH-E in ceramic prototype QFP32 package ATmegaS64M1-KH-MQ, ceramic space-grade QFP32 package, QMLQ qualified ATmegaS64M1-KH-SV, ceramic space-grade QFP32 package, QMLV qualified ATmegaS64M1-MD-HP in plastic QFP32 package, AQEC high reliability qualified for volume program . COTS Arm Core MCUs deliver quick prototyping for space applications Microchip’s COTS-to-radiation–tolerant and radiation-hardened Arm Core MCUs enable designers to start prototyping faster and at a lower cost . Microchip Technology Inc. has launched the space industry’s first Arm-based microcontrollers (MCUs) that combine the benefits of commercial off-the-shelf (COTS) technology with space-qualified versions that have scalable levels of radiation performance. This allows designers to start prototyping with a commercial device before moving to a radiation-qualified version, which cuts development time and cost. The new SAMV71Q21RT radiation-tolerant and SAMRH71 radiation-hardened MCUs are based on the automotive-qualified SAMV71 and implement the Arm Cortex-M7 system-on-chip (SoC). This enables more integration, cost reduction, and higher performance in space systems, said Microchip. Software developers can start their designs with a lower-cost COTS SAMV71 device before moving to a space-grade component. Both COTS devices use the same software development toolchain, including software libraries, board support package (BSP), and operating system (OS) first level of porting. All software development can be swapped out to a radiation-tolerant or radiation-hardened version in a high-reliability plastic package or space-grade ceramic package. Microchip said that the SAMV71Q21RT radiation-tolerant MCU reuses the full COTS mask set and offers pinout compatibility, so designers can quickly scale from COTS to qualified space parts. The SAMV71Q21RT can be used in NewSpace applications such as low earth orbit (LEO) satellite constellations and robotics. The SAMV71Q21RT ensures an accumulated TID of 30 Krad (Si) with latchup immunity and is nondestructive against heavy ions. The SAMRH71 radiation-hardened MCU is designed for more critical sub-systems like gyroscopes and star tracker equipment and deep-space applications. It also features dedicated SpaceWire and MIL-STD-1553 interfaces for control and high-speed data management up to 200 Mbits/s. Radiation performance includes: Accumulated TID of more than 100 Krad (Si) No Single Event Upset (SEU) Linear Energy Transfer (LET) up to 20 MeV.cm²/mg, without system mitigation Designed for No Single-Event Functional Interrupts (SEFI), which secures all memories’ integrity Both devices are fully immune to Single-Event Latchup (SEL) up to 62 MeV.cm²/mg. Other key features include fault management and data integrity features such as error-correcting code (ECC) memory, integrity check monitor (ICM), and memory protection unit (MPU), as well as CAN FD and Ethernet AVB/TSN connectivity. An evaluation board (ATSAMV71-XULT) is available. Designers can use the Atmel Studio Integrated Development Environment (IDE) for developing, debugging, and software libraries. Both devices will also be supported in MPLAB Harmony version 3.0 by mid-2019. Sampling is available for the SAMRH71 in a CQFP256 ceramic package, while the SAMV71Q21RT is available in volume-production quantities in four derivatives: SAMV71Q21RT-DHB-E in ceramic prototype QFP144 package SAMV71Q21RT-DHB-MQ in ceramic space-grade QFP144 package, QMLQ equivalent SAMV71Q21RT-DHB-SV in ceramic space-grade QFP144 package, QMLV equivalent SAMV71Q21RT-DHB-MQ in plastic QFP144 package, AQEC high reliability qualified Intersil’s new radiation-tolerant plastic ICs to power Small satellite mega-constellations Intersil, a subsidiary of Renesas Electronics Corporation (TSE: 6723), announced the first three members of its new family of radiation-tolerant plastic-package ICs designed to support the emerging field of small satellites that will provide solutions such as high-speed Internet connections to hundreds of millions of users in communities, governments, and businesses worldwide. Fleets of hundreds of small satellites will create mega-constellation networks to deliver broadband Internet links from low Earth orbit (LEO) to every corner of the globe, including rural areas without wireless connectivity access. Intersil’s rad-tolerant plastic parts include the ISL71026M 3.3V controller area network (CAN) transceiver, ISL71444M 40V quad precision rail-to-rail input and output (RRIO) op amp, and the ISL71001M 6A point-of-load (POL) voltage regulator. These ICs deliver rad-tolerance performance at a much lower cost point versus radiation assurance tested Class V (space level) products. All three ISL71xxxM devices go through characterization testing, which includes total ionizing doze (TID) up to 30krads (Si) for single event effects (SEE). SEE take into account single event burnout (SEB), single event latch-up (SEL), single event transients (SETs) and single event functional interrupts (SEFIs) at a linear energy transfer (LET) of 43MeV•cm2/mg. Intersil’s rad-tolerant plastic packaging flow leverages the company’s more than 50 years of spaceflight experience developing rad hard (>75krad) and rad-tolerant (<75krad) products for extremely harsh environments. The upfront radiation effects characterization and AEC-Q100 automotive-like qualification gives customers the utmost confidence to design Intersil radiation-tolerant plastic parts into cost-sensitive small satellites for LEO mission profiles up to five-years. The ISL71xxxM are also well suited for high altitude (>40km) avionic systems, launch vehicles that are prone to heavy ions, and medical equipment where radiation is a concern. “The short mission life of small satellites and less stringent low earth orbit is driving the trend toward low-cost commercial off the shelf (COTS) ICs, but not without costly upscreening and spaceflight reliability issues,” said Philip Chesley, Intersil’s vice president of Industrial Analog and Power products. “Intersil’s cost effective, radiation-tolerant plastic ICs overcome the reliability issues and hidden costs of COTS, giving satellite manufacturers the confidence and mission success assurance to launch and operate mega-constellations.” The ISL71026M radiation-tolerant 3.3V CAN transceiver provides serial data transmission at speeds up to 1Mbps. Up to 120 transceivers can be connected to a single CAN bus to reduce cabling/harness size, weight and power (SWAP) costs for satellite command and telemetry systems. Key Features and Specifications of ISL71026M · Operates at input voltage range from 3V to 3.6V · Quiescent supply current: 7mA (max), Listen mode supply current: 2mA (max) · Compliant with ISO 11898-2 physical layer standard · Bus fault protection up to ±20V, and loopback/listen mode · Cold spare capability: powered down devices/nodes without affecting active devices operating in parallel · Characterized radiation-tolerant to 30krad(Si) and SEE at LET = 43MeV•cm2/mg The ISL71444M rad-tolerant quad RRIO op amp provides low power, low offset voltage, and excellent output noise performance. Its SET recovery of <5µs eliminates external filtering. Key Features and Specifications of ISL71444M · Wide single and dual supply range from 2.7V to 40V · Wide gain bandwidth (GBW) product of 19MHz · Very low input offset voltage of 300µV · Low current consumption per amplifier of 1.1mA typical, and high slew rate of 60V/µs · Characterized radiation-tolerant to 30krad(Si) and SEE at LET = 43MeV•cm2/mg The ISL71001M rad-tolerant 6A synchronous buck regulator with integrated MOSFETs delivers high peak efficiency up to 95%, and steps down 5V and 3.3V primary rails to POL inputs as low as 0.8V for FPGAs, CPLDs, DSPs, CPUs and peripheral I/Os. Key Features and Specifications of ISL71001M · Operates at input voltage range from 3V to 5.5V · Tightly regulated output voltage externally adjustable from 0.8V to 85% of Vin · Fixed 1MHz switching frequency for reduced filter size · +/-1.2% referenced voltage, and compensation free · Bidirectional SYNC pin synchronizes two devices 180° out of phase · Provides adjustable output voltage, analog soft-start, input/output undervoltage, overcurrent protection, and power-good output voltage monitor · Characterized radiation-tolerant to 30krad(Si) and SEE at LET = 43MeV•cm2/mg Intersil space-communications ICs immune to single-event effects Intersil here today announced a family of radiation-hardened (rad-hard) power-management components designed to withstand the potentially destructive, heavy-ion environment of space. Single-event effects (SEE), as they are known, are becoming an important issue to communications-system designers as the size of power-control devices decreases and demand for bandwidth increases the complexity of spacecraft systems. Up till now, ionizing radiation effects have been mitigated by either part-level hardening or by shielding sensitive electronics, Intersil said. But the nature of SEEs makes shielding the new generation of components less effective. Intersil's new family of rad-hard power management devices takes advantage of the company's dielectrically isolated, hardened-silicon-gate wafer fabrication process. Specifically designed to deliver highly reliable performance in harsh radiation environments, the process has been used to produce ICs vital to integrated communications applications, such as pulse width modulators (PWMs), voltage references, voltage regulators, MOSFET drivers and comparators. "Intersil devices enable the design of satellite electronics systems with greatly enhanced reliability and operability," said Nick van Vonno, senior scientist for Intersil's space and defense product line. "Combining Intersil's power management design expertise with the company's robust rad-hard processes has resulted in the first power management device family hardened to guaranteed high levels of SEE," he added. "This is a strong value proposition, as it is impractical to shield against this environment." Intersil's SEE family includes the Star*Power line that features a series of power management ICs. Several of Intersil's Vulcan DC-DC power conversion modules, as well as the Star*Power Gold family of power MOSFET devices, is also included in the SEE family. The devices are hardened to total ionizing dose levels of 300 krad (Si) and are available in reliable hermetic packages. They are designed for enhanced SEE hardness, with a design objective linear energy transfer (LET) rating of 82 MeV/mg/cm2. SEE hardness is achieved by a combination of hardened processing and specific design techniques such as redundancy and error correction. The Star*Power and Star*Power Gold series both spans six voltage ranges from 30 to 250V. The Star*Power MOSFET devices are optimized for low on-resistance and superior total ionizing dose performance, while the corresponding Gold devices are optimized for low gate charge and superior SEE hardness. The Star*Power DC-DC converter modules offer highly efficient power conversion capability with total dose hardness of 100 krad (Si) and SEE hardness of 82 MeV/mg/cm2. The Intersil Vulcan line of hybrid DC-DC converter modules leverages the Star*Power rad-hard components. These highly efficient converters support a wide range of input and output voltages, reflecting spacecraft design trends towards higher DC bus voltages. The Vulcan modules are rated at 100 krad (Si) total ionizing dose and feature the same SEE hardening to LET values of 82 MeV/mg/cm2. Chip duo targets power supplies for small satellites Renesas Electronics claims to have launched the space industry’s first plastic-packaged, radiation-tolerant PWM controller and gallium-nitride (GaN) FET driver for DC/DC power supplies in small satellites (smallsats) and launch vehicles. The chip duo is especially designed for isolated flyback and half-bridge power stages and motor control driver circuits in satellite buses and payloads. The smallsats form large constellations operating in multiple low Earth orbit (LEO) planes and provide global broadband internet links and high-resolution imaging for sea, air, and land asset tracking. The ISL71043M PWM controller, which provides fast signal propagation and output switching, features maximum supply current of 5.5 mA, which reduces power loss by more than three times. Moreover, ISL71043M offers the adjustable operating frequency of up to 1 MHz, and that enables higher efficiency and the use of smaller passive filter components. The ISL71040M, a low-side GaN FET driver, ensures reliable operation by precisely controlling the gate driver voltage to +3%/−5% in hostile temperature and radiation environments. The chip’s split outputs adjust the turn-on and turn-off speeds, and its high current source and sink capability enable high-frequency operation. The ISL71040M chip operates with a supply voltage between 4.5 V and 13.2 V, and it includes both inverting and non-inverting inputs. Renesas said that both devices are characterization-tested at a total ionizing doze (TID) of up to 30 krads (Si) and for single-event effects (SEE) at a linear energy transfer (LET) of 43 MeV • cm2/mg. Both devices operate over an extended temperature range of −55°C to 125°C. The ISL71043M PWM controller is available in a small 4 × 5-mm SOIC plastic package, which reduces the PCB area up to 3× compared to competitive ceramic packages. And the ISL71040M radiation-tolerant low-side GaN FET driver is available in an eight-lead 4 × 4-mm TDFN package. Electronics Rocket into a New Frontier Featured Resources Vishay Super 12 Harsh Environments Technology Figure 1: First Launch of the Orion Crew Vehicle. With the recent Orion spacecraft test flight, humanity is once again attempting manned spaceflight beyond low Earth orbit (LEO). The test launch marked the first time since the end of the Apollo mission in 1974 that a manned-capable spacecraft had flown so far from our planet. Space exploration technology has changed dramatically since that time, but the dangers that future explorers and their equipment will face has not. Radiation, extreme temperature fluctuations, and intense vibrations at liftoff are just some of factors that engineers must handle when designing electronics to operate in the harsh environment of outer space. Figure 2: Nanosatellite for NASA’s CubeSat Initiative. While you might think that these are problems of thin tie-wearing engineers, nothing could be further from reality. Today you don’t need a NASA-sized budget to get into space, or at least into near-space. Many makers are engaged in the burgeoning field of amateur space exploration. Science experiments are now routinely tethered to weather balloons, and if you’re really lucky you can get a nanosatellite launched into orbit thanks to NASA’s CubeSat initiative. Regardless of your budget, the operating environment of space travel is tough on electronics. There are numerous design techniques and engineering principles to keep in mind when designing electronics that are meant to operate in space. Before we jump into the details, let’s first get a better understanding of the challenges posed by operating electronics in outer space. The Operating Environment Figure 3: Source of radiation and high-energy particles in space. Earth’s magnetic field provides a defensive shield that protects us from being inundated by highly energetic particles (protons, electrons, and heavy ions) and radiation. These particles can include cosmic rays that come from beyond our solar system, as well as particles that are ejected from our Sun during Solar Particle Events (SPE). As we move beyond the safety of our planet, these particles increasingly take a toll on sensitive electronics. High-energy particles can affect electronics in multiple ways, and someone has taken the time to categorize them with regard to semiconductors: Single Event Transient: High-energy particle affects a particularly sensitive component resulting in a transient current or voltage spike. Single Event Latchup: Particle strike causes an electrical short between components on an integrated circuit resulting in circuit malfunction, but recovery is possible through a reboot of the affected system. Single Event Burnout: A latch up event that results in the affected device being destroyed. Single Event Upset: Internal build up charge causes a ”bit flip” in a memory or logic device (more about this later.) Displacement Damage: Accumulation of defects to the structure of silicon due to high-energy particle impacts. Total Ionizing Dose: Buildup of positive charges in insulators and oxide over time result in faulty circuit behavior. Thus, various particle events can cause numerous problems that fundamentally alter the operating characteristics of components. Spurious (i.e., “false”) currents can be induced in circuits resulting in incorrect circuit operation. Even worse, microchips can be destroyed due to excess induced power. If enough charge accumulates, bits in a processor or in memory can be flipped, resulting in data corruption. If the corrupted data plays a role in controlling a critical subsystem such as navigation or engine control, it is possible to lose the entire spacecraft. Radiation is just one concern. Extreme variation in temperature can occur over very short time periods, from hundreds of degrees below freezing to hundreds of degrees in the other direction depending on a spacecraft’s orientation and distance from the Sun. If not handled properly, thermal stresses can cause unpredictable circuit behavior at best and catastrophic failure at worst. Space electronics must also handle problems that can occur before a spacecraft ever leaves Earth’s atmosphere. Violent vibrations induced during rocket-assisted launches wreak havoc on components and interconnects if they are not designed to tolerate such extreme forces. Build It Tough Both radiation and temperature extremes require a variety of unique design techniques when building electronics to reliably operate in outer space. At the silicon level, individual components are altered in fundamental ways to provide better resiliency. Other design techniques include redundancy, where additional and/or redundant components, circuits, or entire systems may be employed in the design. Lastly, there are operational considerations to protect onboard electronics. Let’s take a look at some of the design techniques in each category: Special Design Consideration at the Silicon (Component) Level: Component selection is a critical phase of designing a space-based system. There are many differences in the engineering and manufacturing techniques of components that to be considered: “Radiation hardening” is the term given to a variety of design and manufacturing techniques to re-design electronic components (most commonly semiconductor-based components) to be more resilient to exposure to high-energy particles. A common method is to replace the silicon substrate of semiconductors with “silicon-insulator-silicon” substrate (SOI) or a sapphire substrate (silicon-on-sapphire, or SOS). The alternative substrate allows semiconductor components to be very good at curtailing the spread of stray currents to neighboring elements, should one element be struck by a high-energy particle. Other semiconductor design tips you may not know, when designing for operation in space: Bipolar junction transistors are more tolerant of radiation strikes than CMOS circuits in some applications. Replacing dynamic random access memory (DRAM) with static RAM is a design trade-off that is often chosen since SRAM is more tolerant, though at the expense of cost and physical layout size (less memory per unit area). Robust and Redundant Systems: After selecting robust components that can meet the operating requirements, the next key step is to ensure the system as whole is well architected and that interfaces between components are as well designed as the components themselves. Material selection is one key aspect of ensuring good radiation protection for internal systems. Copper and aluminum shielding is an option to protect a spacecraft’s circuitry from certain particles, though this is not effective for higher energy cosmic rays. Lead is another option for shielding. Hamming distance functions and parity bits can be used for memory error detection and correction. The Hamming function is a software-based solution and does add some processing overhead. Modular redundancy techniques such as Triple Modular Redundancy (TMR) is a design topology where redundant copies of the same circuits are used to process the same data inputs. The outputs are then passed to a “majority gate” that compare the outputs from the redundant circuits and decide the correct solution to pass on to systems downstream. This has the advantage of being faster than the Hamming solution as it is done all in hardware. The Data Processing System (DPS) aboard the now defunct U.S. Space Shuttles had five redundant backup systems, one of which ran independently developed software from the rest as a failsafe measure. The use of a watchdog timer is another design technique to detect and recover from a computer glitch. A watchdog timer works by counting down and every so often the main processor resets the watchdog before it reaches zero. Should a main computer glitch occur and the watchdog timer hits zero, the watchdog will generate a reset signal that will restart the main processor and place it into a safe mode before resuming operations. Electromechanical systems are also employed on spacecraft that must contend with high temperatures of the inner solar system before venturing into the cold of the outer solar system. Temperature sensors, when combined with mechanical systems such as louvers, can safely regulate the internal temperature of a spacecraft. While we’ve talked a lot about semiconductor design strategies, it should be worth highlighting that interface between subsystems is another potential issue for spacecraft electronics. Interconnects and cable connectors between systems must also be robust to withstand spacecraft launch and possibly even re-entry. Repair and maintenance for space stations is also a consideration. Thoughtful design is a part of space operation, possibly learned the hard way. Remember the round and square CO2 scrubbers in Apollo 13? The crew had moved to safety in the Lunar Module that was designed for two people for 36 hours of use, not three people for 96 hours. Figure 4: Astronaut John Swigert is shown to the right of the square device they hacked together to adapt the square scrubber cartridges to fit that on the Lunar Module, which used round cartridges. And yes, that is duct tape. We know that purposefully keeping designs consistent and simple can save lives and cost. Most engineers would label a beautifully simple yet very efficient design as “elegant.” Although intended for use on Spaceship Earth, Phoenix Contact’s SUNCLIX Photovoltaic Connectors require no tools to assemble, and would qualify as an “elegant design” for many. Robust, redundant systems are an engineering methodology, but elegant design flows from experience, innate talent, and creativity. Figure 5: Phoenix Contact’s SUNCLIX Photovoltaic Connectors demonstrate elegance in design. (Source: Mouser) Operating Procedures: Lastly, there are methods in operation of spacecraft and associated subsystems to reduce the impact space: Orbit selection is key, as certain orbits will reduce exposure to high-energy particles. Orbits such as those favored by CubeSats can be safe enough such that commercial-off-the-shelf (COTS) components can be used (without radiation hardening.) De-energizing all but the most critical systems before entering into regions of space where high radiation is expected is often employed to preserve onboard systems. Beyond the Final Frontier Outer space is not the only harsh environment where electronics may be installed. There are plenty of harsh operating environments right here on Earth. Consider the following environments: Polar regions: Extremely low temperatures Desert/Rain Forest: High temperature or very humid environments Deep Ocean: High pressure, low temperature Industrial: Chemically corrosive environments Medical: Inside the human body Each environment presents unique operating challenges. From a systems engineering perspective, understanding the operating environment is key in making solid design decisions and considering all potential environmental conditions early in the design process. And don’t assume a one-fits-all-solution will work in every situation. Design issues are complicated by the fact that once launched, the ability to perform maintenance on a spacecraft is very limited, depending on the mission. Thus engineers must employ a multitude of techniques to ensure that systems can handle the countless possible failure scenarios that can be encountered. Thus, radiation hardened components are more expensive than conventional-use, COTS counterparts, even though the hardened components can sometimes technologically trail behind by five or more years. Also consider that while all engineering ventures must strike a balance between cost, schedule, and technical performance, space-based systems must contend with unique scheduling challenges. Certain missions that target particular destinations may have launch windows that are only a few days. Missing a deadline may mean waiting years for another opportunity. In short, design for space missions is not for the timid. To find out more about spacecraft electronics component design and manufacturing (or if you have trouble sleeping), there are years’ worth of U.S. military standards (a.k.a. MIL STD and MIL-SPEC) online at everyspec.com, Radiation-hardened space electronics enter the multi-core era The pace of embedded computing technology development is placing pressure on satellite and spacecraft designers, who must deliver reliable systems at low costs. The pace of embedded computing technology development is placing pressure on satellite and spacecraft designers, who must deliver reliable systems at low costs. Space is a dangerous place, especially when it comes to sensitive electronic components like microprocessors, solid-state memory, and network interfaces. The problem is radiation; space has a lot of it, and most modern electronic components were not designed to operate in a radiation environment. Levels of radiation that occur in space can cause a variety of problems for electronic components, ranging from complete burnout to the occasional bit flip that can corrupt some data and render the reliability of even untouched data open to question. There are ways to specially design radiation-hardened electronic parts to resist the effects of radiation, but it's expensive to do this. Moreover, overall demand for rad-hard electronic parts is relatively low, which can drive up their costs even more. The growing use of space-based electronics for manned spacecraft, satellites, and deep-space probes is putting pressure on the rad-hard community to deliver technology with high performance and low cost. Then there's specially shielded packaging of electronic parts to keep radiation at bay. Not only is this approach expensive, but it also can be heavy enough to adversely influence launch costs. There are other ways of dealing with space radiation, ranging from redundant subsystems, selective shielding, and upscreening commercial off-the-shelf (COTS) electronics for enhanced reliability. Among the challenges of space operations today are balancing electronics costs, capabilities, and reliability such that systems are good enough to operate in specific radiation environments for expected durations to meet mission requirements. Space radiation effects There are several ways that electronic parts designers can radiation-harden their devices. One of the most common is to harden for total-ionizing-dose radiation - or the amount of radiation the device is expected to withstand for its entire life before problems occur. A typical requirement is for 100 kilorads of total-dose radiation hardness. The evolution of today's advanced electronic components, however, also is changing the total-dose picture. Specifically, the shrinking size of circuits on today's most modern chips is lessening their vulnerability to total-dose radiation. "As technology nodes decrease in size - from 90 nanometers to 14 nanometers - total ionizing dose performance naturally improves," says Michelle Mundie, business area director of standard products at rad-hard specialist Cobham Semiconductor Solutions in Colorado Springs, Colo. This phenomenon is a double-edge sword, however, because the steady shrinking of chip geometries also makes these devices even more vulnerable to other kinds of radiation effects, namely single-event upset (SEU) and single-event latchup (SEL). "Single-vent effects like latchup are becoming more of a problem, so we have to design for those effects. "Devices today are more sensitive to radiation at the gate and transistor level." Curtiss-Wright is providing the company's radiation-tolerant Smart Backplane technology for the European Space Agency's Vega-C expendable space launch rocket. Single-event upset can corrupt data when a radiation-charged particle flips a data bit from a one to a zero, or vice versa, which corrupts data. SEU typically does not physically damage an electronic device, only the data it contains or that flows through it. Single-event latchup, however, can be damaging if it causes a short circuit that triggers thermal runaway. Device designers must consider these potential threats. There are several design approaches to mitigating radiation effects, which include radiation hardening by design, selective shielding, redundancy, and error-checking. One of today's most notable rad-hard by design projects is the High Performance Spaceflight Computing (HPSC) Processor Chiplet program. Rad-hard by design Rad-hard by design involves designing an electronic component from the ground up to resist radiation effects. It can be one of the most expensive and time-consuming approaches, but sometimes it's the only solution for electronic components that are crucial for protecting human lives or safeguarding important orbital and deep-space missions. U.S. government space experts are working with the Boeing Co. to create a new generation of radiation-hardened microprocessors for a wide variety of space applications to provide some of the most advanced processor technologies with broad industry and software support for future space missions. Sponsors of the HPSC project are the U.S. National Aeronautics and Space Administration (NASA) and the U.S. Air Force Research Laboratory at Kirtland Air Force Base, N.M. Industry experts from the Boeing Solid-State Electronics Development segment in Seattle are carrying out the program, based on a $25.9 million contract awarded last March by the NASA Goddard Space Flight Center in Greenbelt, Md. Curtiss-Wright is delivering the company's MnACQ-2000 Miniature Network Data Acquisition System, shown above, for the NASA Orion spacecraft and the Space Launch System (SLS). These data-acquisition systems are hardened against the effects of space radiation. The HPSC program is intended to develop rad-hard microprocessor technology that will replace or augment previous generations of rad-hard microprocessors, such as the RAD750 from the BAE Systems Electronic Systems segment in Manassas, Va., and the RH-1750A, RH-32, and Advanced Spaceborne Computer Module (ASCM) from the Honeywell Aerospace segment in Clearwater, Fla. Managing the HPSC project are experts at the NASA Jet Propulsion Laboratory (JPL) in Pasadena, Calif., led by Richard Doyle and Raphael Some. The NASA Goddard Space Flight Center is managing the HPSC contract. The program is developing technologies for a next-generation, general-purpose, multi-core space processor to meet on-board computing needs of future manned spacecraft and space robots. The four-year project is expected to deliver a next-generation, rad-hard space processor based on the ARM processor architecture to provide optimal power-to-performance for upgradeability, software availability, ease of use, and relatively low costs. Although previous generations of rad-hard space processors like the RAD750 have performed well for years, "there are needs now that are well in excess of what that processor can do. Today's radiation-hardened space processors typically are single-processor systems based on existing commercial or military computers. They operate at maximum required throughput, fault tolerance, and power levels. Air Force and NASA space experts, however, say they anticipate future missions that will require an increase in throughput and wider variations in throughput, fault tolerance, and power levels. Commercially developed technology "We're basing this device on commercially developed, well-supported IP, and making sure there is a wide user base and software support - something that is well-supported by industry . Air Force and NASA experts have defined the ARM-based hardware and companion Linaro system software as the HPSC processor baseline architecture. Boeing embedded computing experts will develop a new space processor design that will provide orders of magnitude improvement in performance and performance-to-power ratio as well as the ability dynamically to set the power-throughput-fault tolerance operating point. The HPSC project also will use Radiation Hard by Design (RHBD) standard cell libraries, as well as the ARM A53 processor with its internal NEON single instruction, multiple data (SIMD) design. "You really need the ability to do radiation hardening by design, applied to standard cells, etc., that allow you to use a modern semiconductor process. NASA experts are looking at three broad application areas for the next-generation HPSC microprocessor: vision systems, model-based reasoning for on-board autonomy, and high-rate instrument processing . Vision systems would involve space applications like obstacle avoidance. "We need to process imagery to determine where you should and should not land, and in real time . Model-based reasoning for on-board autonomy could enable spacecraft designers and space mission managers to migrate much of the mission-planning and resource-management tasking to the spacecraft, rather than rely on ground controllers for those jobs. NASA experts also are thinking ahead to future deep-space missions in which ground controllers may not always be in touch with the spacecraft, so must rely on the spacecraft to make some of its own decisions. High-rate instrument processing involves demanding digital signal processing for sensors and instruments like synthetic aperture radar and hyperspectral electro-optical sensors. "We want to migrate some on-board data processing on-board the spacecraft so we can downlink data of interest, rather than just the raw data. In addition, NASA experts are looking to Boeing to develop enabling technologies for a space processor that not only is radiation hardened, but also can manage its own electricity demands to preserve power resources - especially on deep-space missions far from Earth. Aitech offers the E905 three-slot, cold-plate-cooled, space-rated embedded computing enclosure for mission-critical space applications, built on a 3U CompactPCI platform using machined aluminum. Smart power usage A key goal is the ability to trade dynamically between processing throughput, power consumption, and fault tolerance. "We want to be power-aware in our processor, and be able to ramp-down the processor for just what we need. That is kind of missing today . "We are looking for the ability to tailor power, processing, and fault tolerance. Flexibility is one of the key objectives for HPSC." Fault tolerance management middleware will enable the processor to detect and log errors; remove services likely to experience hard failures; respond to uncorrectable errors; and implement n-modular redundancy, checkpoint/rollback, or other high-level fault tolerance. Additional applications for the HPSC processor will include military surveillance and weapons systems, human-rated spacecraft, habitats and vehicles, and robotic science and exploration platforms. System applications range from small satellites to large flagship-class missions. Additional space computing tasks of the HPSC processor will include command and data handling, guidance navigation and control, and communications like software-defined radio; human assist, data representation, and cloud computing; high-rate real-time sensor data processing; and autonomy and science processing. Boeing will provide prototype radiation-hardened, multi-core computing processor Chiplets, system software, and evaluation boards for Chiplet test and characterization. The Chiplets each contain eight general-purpose processing cores in a dual quad-core configuration, and interfaces to memory and peripheral devices. "The period of performance is 45 months, so by late 2020 we're expecting Boeing to provide a processor chip or chiplets, packaged chiplets and bare die, and evaluations boards populated with chiplets to exercise the silicon . "These chiplets will not be space-qualified; the focus of this project is on the silicon." Embedded computing companies that specialize in rugged COTS technology are adapting design techniques to provide rad-hard computing for space. Shown above is the Aitech SP0-S enhanced space-qualified 3U CompactPCI single-board computer. System software infrastructure will support real-time operating systems and Unix/Linux parallel processing to support hierarchical fault tolerance ranging from single Chiplet deep-space robotic missions to multi-Chiplet -redundant human spaceflight missions. "We also expect system software, including operating system, compilers, debuggers, a Linux operating system, and a real-time operating system,. The HPSC processor will include Serial RapidIO (SRIO) for high-bandwidth communications, and several interfaces to high-speed, off-chip memory. The SRIO interfaces also can function as advanced microcontroller bus architecture (AMBA)-bus bridges to tile or cascade several processors to increase bandwidth or improve fault tolerance. The SRIO interface also can extend the HPSC processor to other SRIO-enabled processing devices such as field-programmable gate arrays (FPGAs), graphics processing units (GPUs), and in the future to other application-specific integrated circuit (ASIC)-based coprocessors. NASA and the Air Force will consider a flight-qualification program when the HPSC program concludes in late 2020 or early 2021. After that, it's reasonable to assume the technology will be ready for deployment. it"s speculates that HPSC technology could be deployed for at least 10 years before designers must look at a new generation of rad-hard microprocessors. Looking beyond microprocessors Outside the realm of the HPSC program, NASA experts are considering plans for additional radiation-hardened computer components, such as general-purpose graphics processing units (GPGPUs), field-programmable gate arrays (FPGAs), as well as volatile and non-volatile memory. The problem right now is funding. For the HPSC program "we looked at a number of processing architectures, and the biggest bang for the buck was a general-purpose, multi-core processor. For the future, nevertheless, "we have interest in some sort of paring of a general-purpose multicore processor with a rad-hard FPGA or GPGPU. There is interest, but we can't say that we have funding for that, but there's definitely interest. "We're also interested in advancing volatile and non-volatile memory and networking rad-hard technologies . We have interest in developing a rad-hard ecosystem around that HPSC processor." COTS electronics for space While it's true that some space applications require the most expensive radiation-hardening solutions, the reality is that space systems designers must do the best they can to use commercially available electronic components for space applications. Often this approach involves taking a hard look at whether the intended application is life- or mission-critical, the expected severity of the radiation environment in which the overall system will operate, and the duration of the planned mission, and then designing a radiation-tolerant system that's good enough. Low-Earth orbit (LEO), for example, does not experience the same radiation levels that higher orbits or deep-space have. A growing number of LEO satellite applications today, moreover, have relatively limited life cycles. Some Earth-observation projects, in fact, are expected to last for less than five years. "There's a push to put a lot more hardware on LEO orbits lasting from three to five years for space observation," says George Romaniuk, director of space product management at Aitech Defense Systems Inc. in Chatsworth, Calif. "The orbit is low, so the requirements are not that stringent. On the other hand, we see groups that will be for lunar or asteroid exploration beyond Earth orbit. They want to stay for a very, very long time (18 years, minimum) so the market is starting to segment." Applications in lower-Earth orbits that may be of relatively short durations - and that could tolerate the occasional data upset - are a particularly promising market for COTS electronics suppliers, particularly for cost-sensitive applications like small satellites. "Our lives are basically lives of compromise," Romaniuk says. "We may not have $7 million to create something nice, but we have to piece together things that will provide performance and reliability." Cobham has specialized for decades in selecting commercially developed electronic parts that are appropriate for some space applications. The company uses upscreening and a variety of other testing. The company started their rad-hard upscreening business about 20 years ago with a focus on solid-state memory, and now is expanding into microcontrollers and mixed-signal analog products. "With changing market pressures from the small satellite industry, and the drive to smaller device sizes, a lot of the space market is looking at flying at COTS products," says Cobham's Mundie. "We knew the need was there, and our focus is changing to ensure we are offering our right products to the industry. It is a challenge for us to identify COTS products that will work in a variety of applications." Cobham is using upscreening technologies and years of knowledge to create a radiation-hardened CAN bus network interface. Multi-core redundancy Some technological developments in the COTS computing industry are providing serendipitous advantages for space systems designers. Not only are deeply submicron geometries naturally resistant to total-ionizing-dose radiation, but modern multicore processor architectures also offer opportunities for system redundancy. Embedded computing designers at the Curtiss-Wright Corp. Defense Solutions Division in Ashburn, Va., are using multi-core processors not to block radiation-induced single-event effects, but to recover gracefully without system disruption when upsets occur. "Where we are now using multi- core processors to speed up com- puting, we also can use that to our advantage by running the same code in multiple cores," says Paul Hart, chief technology officer and technical fellow of avionics and electronics at the Curtiss-Wright office in Christchurch, England. "We run main code in one core, and duplicate code in another core that run in lockstep," Hart explains. Running identical code in three separate processor cores enables the system to detect a malfunction in one core, shut down the offending core, and continue operating based on no detected malfunctions in the other two. "If a single event does occur, it will cause one of the cores to lose lock," Hart says. "If that happens the higher-level supervisory system that operates above it will reset the device. It will take in the order of seconds to reboot a typical embedded application; while the upset core is rebooting, the other two carry on. You're fully recoverable after a bit flip." Radiation creep Hardening electronic systems to the effects of radiation isn't just a space problem any longer. Aircraft flying at altitude, at about 30,000 feet and above, also are starting to experience radiation-induced effects. "There are 500 times more neutrons at 30,000 feet than there are on the ground," points out Aitech's Romaniuk. If commercial avionics systems designers aren't considering radiation hardening today, they soon will be. The shrinking of commercially developed microprocessor architectures and other electronic devices will continue making the problem worse. ERAFT ANATOMY OF SPACE CRAFT BepiColombo’s cruise configuration A spacecraft has a number of essential components, such as an engine, power subsystem, steering system and communications system, in addition to science instruments. Most of these systems are housed in a section called the service module, while the science instruments make up the payload module. These are encased inside the spacecraft’s main structural unit and connected by a ‘harness’, the electrical framework on which the spacecraft electronics systems communicate. Propulsion and thrust : The propulsion system that a satellite carries is dictated by the orbital position that it needs to reach and by the type of mission. Additionally to the launch vehicle-provided propulsion, there may be an upper stage (e.g. Fregat) that delivers the spacecraft to a higher or to an escape orbit. The spacecraft itself may carry its own (attached or jettisonable) propulsion module for orbital manoeuvres or orbit adjustment. Finally, smaller thrusters may be included for fine orbit adjustments and orbit maintenance, the so-called stationkeeping. ‘Cold gas’ propulsion will be used by Gaia and Lisa Pathfinder and is the simplest type of chemical propulsion. The propulsion system consists of pressurized gas and a nozzle, and whenever thrust is needed the nozzle is opened and some of the gas is expelled. Most satellites also have simple hydrazine thrusters and/or reaction or momentum wheels to control attitude and orbit. Solar-electric propulsion using ion engines is an alternative way to travel in space. Ion engines shoot out a spray of ionized particles to deliver their thrust to push the spacecraft on its way. Ion engines typically get the high power required to ionize the propellant particles from the spacecraft’s solar panels. They work their magic in a leisurely way and can go on pushing gently for months or even years, for as long as the Sun shines and the small supply of propellant lasts. ESA’s SMART-1 spacecraft used ion propulsion to travel to the Moon in 2003; Bepi-Colombo, launching in 2015, will also use this method combined with gravity assists from flybys of the Earth, Venus and Mercury to finally enter orbit around Mercury. Studies are also being made in Field-electric propulsion systems (FEEPs), an advanced electrostatic propulsion concept that uses liquid metal and electric fields to create an acceleration POWER : A spacecraft must generate and distribute adequate power to operate its subsystems and instruments. The power generation is usually catered for by solar panels, which convert sunlight into electricity. When the spacecraft is in eclipse, that is in the shadow of a celestial object or turned away from the Sun and the panels thus do not generate power, batteries kick-in. Depending on the type of spacecraft, solar panels may take on a traditional winged shape (for three-axis stabilized satellites) or be wrapped around the cylindrical body of a spinning spacecraft. Different spacecraft units may require different voltages. Some spacecraft have central units to convert and stabilise the ‘raw’ voltage produced by the solar array before it is distributed, while for others the conversion happens within the units. Planck spinning in space NAVIGATION SYSTEM A navigation system, usually referred to as ‘Attitude and Orbit Control’ is essential for the spacecraft to maintain its attitude, so that it can be directed towards its intended destination. This capability is also required to keep its solar panels pointed towards the Sun and its instruments pointing at specific targets. Attitude control is achieved with electronic 'eyes' (sun and star sensors). These can sense the location of the Sun and track the stars allowing the spacecraft’s position and orientation to be calculated. A propulsion system or reaction wheels controlled by appropriate software ensure then that the spacecraft is moved or oriented appropriately. Most modern spacecraft are ‘three-axis stabilised’ so that they sit 'upright' in space, while other satellites may spin to achieve stability. For example, Planck revolves about a Sun-pointing axis once per minute to stabilise its attitude. COMMUNICATION AND DATA HANDLING The communications system returns science data, that is passed on to the scientists, and 'housekeeping' data, called telemetry, which allows engineers back on Earth to monitor the condition of the spacecraft. The on-board communications system also receives all incoming commands. Communications may be carried out at different frequencies using a combination of dishes and high- or low-gain antennaes. SCIENCE PAYLOAD Instructions are received from the ground in the form of individual commands or sequences to be executed at pre-defined times. The commands are processed by the data handling system that either executes them immediately or stores them for later execution. The data handling system comprises processors, on-board memory, and analog to digital and digital to analog conversion systems. Herschel’s cryostat vacuum vessel Science instruments and experiments make up the payload, the number and type of which depends upon the objectives of the mission and the size of the individual payload components. The payload elements and the consortia providing them are selected by means of an open call before the mission is selected. The scientific payload is normally funded by member states via the scientific members of the consortia. Astrophysics missions Missions that study the Universe – stars, galaxies, black holes and so on – study objects by collecting the radiation they emit, using telescopes, cameras and detectors. They usually have a large mirror to collect light from distant astronomical objects. The larger the mirror, the more light it can collect, and the fainter the object it sees. The surface of the mirror has to be precisely shaped and perfectly smooth, since the slightest roughness distorts the final image. Once light from an object, like a star, falls onto the primary mirror, it is directed towards a smaller secondary mirror where the light is focused and directed to the instruments. Here, the light is detected and analysed, and the results recorded by the onboard computer to eventually be relayed back to Earth. A ‘baffle’ or sunshield surrounds the telescope, limiting the amount of stray light from the Sun, Earth or Moon that can leak onto the detectors and spoil the results. A sunshield also helps radiate excess heat into space, maintaining a stable temperature. A sophisticated cooling system may also be required; for Herschel and Planck the detectors must be cooled to temperatures close to the coldest temperature reachable in the Universe – absolute zero, or –273.15°C. This is achieved using a cryostat, which typically contains liquid superfluid helium at temperatures lower than -271°C. The role of the cryostat is fundamental because it determines the lifetime of the observatory: the superfluid helium evaporates at a constant rate, gradually emptying the tank. Rosetta’s Philae lander on comet nucleus Solar System missions Spacecraft in orbit around a planet host a wide range of instruments to record information about the planet’s atmosphere, surface, and even subsurface. The payload may include cameras to take images; spectrometers to determine the chemical composition of planet’s surface and atmosphere; radar to probe the subsurface, and instruments to study the way in which the planet interacts with the Sun’s magnetic field. The payload may also include a lander, such as Cassini’s Huygens lander that touched down on Saturn’s moon Titan in 2005, and Rosetta’s lander Philae, which will probe the surface of Comet 67P/Churyumov-Gerasimenko in 2014 by scooping up samples of the surface and analysing them in its on board science laboratory. Other missions may include a rover to explore a wider range of a planet’s surface; penetrators to probe the subsurface of a planet or moon to detect ‘earthquakes’; or they may have a sample return element, which must be capable of returning back to Earth with samples collected from the target. Fundamental physics missions Missions like Lisa Pathfinder will validate in flight a completely new and previously untested method of observing the Universe. Lisa Pathfinder is tasked with testing technology that will lead to the detection of gravity waves, which are thought to be generated by massive objects like black holes. The mission consists of placing two test-masses in a nearly perfect gravitational free-fall, and of controlling and measuring their motion with unprecedented accuracy. This is achieved through state-of-the-art technology comprising inertial sensors, a laser metrology system, a drag-free control system and an ultra-precise micro-propulsion system. SLUSH – The Search for Life Using Submersible Heated drill Spider Water Extraction System Water is essential to human spaceflight missions. It is an immensely valuable resource to sustain astronauts, and as a building block for rocket fuel or other valuable compounds. This is why In Situ Resource Utilization, or ISRU, is so attractive to both exploration and commercial ventures: using local resources means missions can start with lower supplies, or extend their missions far beyond what is possible with materials on-board. Autonomously harvesting water from asteroids, however, is a nontrivial process for space mining technology. Designed for a mission to water-rich asteroids (Carbonaceous Chondrites), Honeybee Robotics’ Spider Water Extraction System is a spacecraft that drills and acquires icy soil samples, extracts the water for later use, and disposes dry soil to prepare for another round of sample collection. The architecture enables each drill to generate significant down-force in the absence of gravity — the auger drills mounted on each leg provide anchoring force as they sample for water-rich material. The Spider Water Extraction System, developed as part of the World Is Not Enough (WINE) program, is designed to be resilient, with multiple systems integrated into spacecraft lander legs provide higher processing volume and system redundancy. The architecture provides a combination of low mass and high strength to drill into tough icy and mineral composites that can be as hard as concrete, whether the material is hydrated or free water. It has demonstrated the ability to gather water from Carbonaceous Chondrite analog materials (hydrates) under thermal vacuum conditions. The Spider Water Extraction System has two modes of mobility on an asteroid, with the ability to walk across the surface and also hop using steam propulsion (with propulsion powered by water mined from the target asteroid). As such, it could be used as a pre-mining surveying technology or as a mining platform on its own. Sample Processing Systems Robotic’s geotechnical work focuses on the entire sample acquisition and analysis chain. Sample preparation is at the heart of this process: a well-prepared sample is essential for accurate geotechnical analysis. Automated sample processing and sample preparation systems must be rugged enough to withstand vibration and harsh environments, but also low-power and lightweight for mobile applications. Honeybee’s Mechanized Sample Handler (MeSH) is a prototype miniature centralized sample preparation station that could be mounted on a rover for a future mission to Mars. MeSH crushes small rock cores to powder, then sieves and distributes it in measured aliquots to one or more instrument inlet ports. This system provides a complete core-to-instrument processing solution. It features a fast, efficient, fully automated 8-axis mechatronic system. Honeybee’s Grinding/Polishing Station (GRITS) is an autonomous three-station operation that can autonomously grind and polish, measure thickness, and measure surface finish to produce very thin samples of rock for geotechnical analysis. The autonomous system produces thin sections, on the order of 30 microns, with a surface roughness of 0.3 microns or better. These samples can then be analyzed by reflected light, polarized light, or other techniques to understand the geological composition of the rock. Spacecraft Design Electronic Sub-systems About the electronic design of satellites and spacecraft : Introduction - Comparison of spacecraft electronic systems to an equivalent ground based unit. Power Systems - Solar cells, solar arrays; storage cells; regulation dissipative and non-dissipative, regulators linear and switched mode, noise reduction, filters, supply monitoring, decentralised regulation. Attitude sensing and control - Earth and Sun sensors, charge coupled devices, wedge and strip, crossed anode, magnetic sensors, search coil and fluxgate, magnetic torquers. Mechanisms & Housekeeping - Control monitoring; optical and magnetic, pyrotechnic actuators, bridge techniques. Harnesses - EMC magnetic and electric coupling, shielding efficiencies for near and far field, EMC outgassing ports, connector types, low and high voltage, printed circuit board types. Reliability - Design techniques, heat dissipation, latch-up, interface and single point failures, housekeeping requirements, components specification, failure rates, fabrication, radiation testing, effect of radiation, displacement and ionisation damage, transients effects, designing for radiation protection. Analogue design - Charge sensitive amplifiers, noise considerations, practical circuits, pulse shaping circuits, unipolar and bipolar pulses, base line depression, pulse pile-up, low frequency measurements. Example sessions - Electrical hardware circuits for past and present space missions will be described and demonstrated utilizing the project's development circuit boards. Challenges in designing electronics for satellites The earliest satellite designs were huge, heavy, and functionality was limited. Nevertheless, satellite designs started evolving with the passage of time and a new era of satellite modeling began with the invention of microcontrollers (MCUs). Engineers were able to reduce complex circuitry to a few parts as MCUs integrated multiple components, reduced power consumption, and minimized overall housing size and weight as Printed Circuit Board (PCB) size shrank, too. The latest development to making space accessible is the CubeSat. What are CubeSats? According to CubeSat101, Basic Concepts and Processes for First-Time CubeSat Developers, “CubeSats began as a collaborative effort in 1999 between Jordi Puig-Suari, a professor at California Polytechnic State University (Cal Poly), and Bob Twiggs, a professor at Stanford University’s Space Systems Development Laboratory (SSDL).” The publication by the NASA CubeSat Launch Initiative goes on to state, “The original intent of the project was to provide affordable access to space for the university science community, and it has successfully done so.” Figure 1: CubeSats come in several sizes. The exactingly specific standards for CubeSats is one of the reasons why they are an affordable means to access space experimentation. (Image: CalPoly) CubeSats are defined in sizes based on a standard CubeSat unit (U). A “1U” CubeSat is 10 cm3 and weighs around 1 to 1-1/3 kilograms. Since the first CubeSat, larger sizes have evolved and are based on the original 1U size, varying in size as 1.5U, 2U, 3U, and 6U, with new CubeSat sizes always a possibility. Today, many of the National Aeronautics and Space Administration’s (NASA) CubeSats contain ARM, Atmel, Texas Instruments’ MSP430, and Microchip Technology PIC microcontrollers.There are many challenges to designing electronics for aerospace or space travel, however. Temperature, vibration, and radiation challenges Designing for space is much more complicated than designing for standard electronics. Electronics for military, avionics, and aerospace are crafted to withstand the extreme temperatures, vibration, shock, and radiation effects commonly encountered at lift-off and outside the earth’s atmosphere. Temperatures vary along a wide range from -55°C to +125°C in space. For instance, the surface temperature of the Moon ranges from between approximately –200°C to +200°C. A satellite can be exposed to below-freezing temperatures and extremely hot temperatures within a short period of time, taxing all materials. Extreme temperature not only shortens the life of a component, but it also affects its everyday operational functionality. Casual electronic components cannot bear such temperatures or such a wide range of temperatures for long. Commercial off-the-shelf (COTS) components that are designed to withstand the required temperature range must be used. An electronic part or kit that is specifically designed to a level of performance and reliability may be subject to assurance processes within the industry’s supply chain. The processes are meant to establish a quality and reliability foundation for the electrical, electronic, and electromechanical components that end up in the industry’s critical applications. “These assurance processes, with inspections and tests possibly performed on a sample basis depending on criticality, are intended to identify defects and abnormalities that serve as warning signs of a potential for premature failure, reduced performance, and safety. One example of an industry that conducts assurance processes is the Automotive Electronics Council, or AEC. The AEC “was originally established by Chrysler, Ford, and GM for the purpose of establishing common part-qualification and quality-system standards,” per the AEC’s site at aecouncil.com. Components meant for space travel also have exacting standards. Temperature isn’t the only factor. Vibration at lift-off could mean the sudden application of 9.2 million pounds of thrust. The galactic cosmic rays in space pose another major challenge and are a “slowly varying, highly energetic background source of energetic particles that constantly bombard Earth,” per the National Oceanic and Atmospheric Administration (NOAA).The rays carry high-energy ions which are capable of energizing satellites electronics, resulting in malfunctioning and damages. Galactic cosmic rays (GCR) consist of heavy elements with high energy ions and no electrons. GCRs are concentrated with protons; they lose their electrons in the course of traveling through the galaxy at the speed of light. (See Figure 2 for more information.) GRCs can pass through a satellite or an astronaut’s skin.[viii] Satellites orbiting at low altitude are more affected by radiation.In order to protect electronic components from radiation, the components must be radiation hardened. Figure 2: This illustration depicts two main types of radiation and how the magnetic field around Earth affects the radiation in space near Earth. Galactic cosmic rays are a variable shower of charged particles coming from supernova explosions and other events extremely far from our solar system. The sun is another main source of energetic particles. The sun spews electrons, protons, and heavier ions in “solar particle events” fed by solar flares and ejections of matter from the sun’s corona. Tin whiskers The vacuum of outer space is also a good environment for tin whiskers to form. Pure zinc, tin, and cadmium plating are not allowed on components that qualify for existence in space. Limited power and housing dimensions Satellites are designed to remain in space for months or years and must have access to power. Solar power is the most likely source of energy to be used in space. The typical CubeSat is equipped with solar cells, however generating power with only a few cells means that the power supply is limited. Under these circumstances, large or power-hungry circuits are not easy to justify. Power consumption and size requirements can be reduced by using Integrated Circuits (ICs). One IC can achieve what was once achieved with a PCB covered with components. The advent of ICs contributed greatly to mankind’s capability in space. Compatibility with available power lines It’s possible that different ICs will require different voltage levels in a satellite. Separate voltage busses might power ICs with different voltage demands. In some cases, it is not practical to use low voltage levels as the voltages could drop significantly enough at the end of a bus to adversely affect operation. In such cases, choosing components with similar voltage level requirements might be preferable. By paying attention to the operating voltage levels of various ICs and components, designs avoid the need to provide several different power supply levels and corresponding voltage regulators. Using components with similar voltage level requirements reduces cost and energy dissipation. Redundant systems A typical satellite mission lasts for years, and repairs are uneconomical. Occasionally a member at the International Space Station or other entity might attempt to fix an issue, however this is a dangerous feat. Therefore, it’s essential to endeavor for flawless designs that are going to function throughout a satellite’s mission life without any issues. For critical missions, redundant systems are often installed in case a part or system malfunctions or dies. Thus, if something fails to operate properly, the redundant system can be implemented either automatically or deployed via radio signal from earth. Interestingly, a side-effect of designing for operation in space is the flexibility of being able to continue a mission even after disconnecting primary systems. Telemetry for monitoring all units Although satellite designs are finalized after extensive design reviews, detailed analyses, and multiple test procedures, unfortunate circumstances may still occur. It is essential to keep track of the various voltage, current, and temperature levels of all the major components. For that, data must be transmitted from the satellite to monitoring stations on earth. Automated, remote monitoring is called telemetry. If satellite telemetry records any significant abnormalities, the associated unit may be disconnected immediately to avoid damage to other systems. Designing systems for space used to be a government-only effort. Today, companies like SpaceX are launching satellites from earth for commercial companies and nations alike. Figure 3: In April 2016, SpaceX’s Falcon 9 first stage landed on droneship aptly named “Of Course I Still Love You. View the landing on __________________________________________________________________________________ Gen . Mac Tech Zone Space ship Structure __________________________________________________________________________________
Money is the most dominant human transaction tool in modern human life, even human life is always in contact with money both in communication and in association because money demands value and form of authority of a person or family, when money is used as a tool for transactions money has value added by the rotation of regional and national and international money transactions, money for individuals and groups and countries shows the ability and legitimacy of those who have it that a person or group and country has the ability to develop and move forward for innovation and research in various fields of technology. the velocity of money is faster, the development of money and interest from the quality of money is also more beautiful and quality. money in the practice of human life has its own place in our lives from the past to the present, where now money has a faster turnaround speed and is more transparent and accountable than when it used currency and demand deposits or more backward that is barter (barter = where money has no advanced meaning yet). electronic money allows more money and faster technological developments in various fields, but there are obstacles when it comes to the regulation of life in various countries on earth. movement of money economy because the people who are still not ready to move quickly. Today's humans live without money like side dishes without salt and without lighting where we do not know what is served and do not know how to process it and enjoy it from all that God has given to us all on earth. we should thank the Father who belongs to heaven that he gives us the resources that we can manage well and with good added value and good transaction tools that are faster and more precise and accurate so that technological developments can be achieved appropriately as well as prosperity evenly distributed in all places and changing human mentality to be more solid that cannot be swayed by the flow of dramatic life LOVE ( Line On Victory Endless ) Gen. Mac Tech Zone e- speed of rotation of electronic money A. XO Transforming Money finance was transformed from a clubby world of cozy relationships to a mathematical one of complex securities, abstract formulas and computing power. Now, a generation later, the financial industry is about to be remade once again, except this time, it is not obscure financial securities that are being transformed, but very nature of money itself. What is Money? Money : It was a much more efficient way to transact business than bartering one good for another. Money was also a useful store of wealth, certainly more convenient than livestock or grains. These two core functions—a medium of exchange and a store of value—still define money today. Many people object to the concept of fiat money because of the control governments have over it. Central banks can increase or decrease the money supply at will, giving them enormous control over economic activity. In extreme cases, hyperinflation can ensue, debasing the currency and wreaking havoc. So it’s not surprising that innovating the concept of money through a digital currency has been a recurring theme in technology circles. Intuitively, it seems that the global financial system should be based on more than the judgments of a small group of central bankers. Yet only recently has digital money actually become possible. Another solution would be to create unforgeable signatures, which is what digital technology makes possible (digital signatures have been around for some time). Moreover, in digital form, these signatures can be distributed—both instantly and ubiquitously—making it an ideal vehicle for an alternative currency to fiat money. It works through a widely distributed digital ledger, which makes it not only super secure, but also incredibly efficient because payment processing is automatic. Further, it is unlikely that a digital currency will ever displace national ones like the dollar. As long as governments have the power to tax, they have the power to demand payment in whatever form they choose. Invariably, that will be a national currency. Facilitating Transactions While digital currencies are unlikely to impact national currencies’ role as a store of value, there is vast potential in using vehicles like Bitcoin as a medium of exchange. Consider that Visa and Mastercard make over $30 billion per year in interchange fees and you can see the possibilities. Bitcoin can do a far better job at a much lower cost. Remember that Bitcoin has a widely distributed ledger, so it’s much more impervious to attack than a centralized institution like a bank. It also transacts business instantaneously, so there is no “float” (i.e. the bank can’t keep your money in limbo while it earns interest on it) and because processing is automated, fees can be lowered substantially. TechCrunch describes another interesting aspect of digital currencies, the ability to program currency to create new financial products with functionality built in. Imagine being able to set up an automated escrow account or a trust on your smartphone, with no lawyers involved. Digital currency is still a very new concept and these are merely initial ideas. Surely, as the market and technology matures, more useful applications will arise. Money has always been intertwined with centralized power. Only governments could issue it and only banks had the resources to facilitate transactions. That model worked well enough, but had obvious drawbacks. Many were shut out of the system while others earned fortunes as gatekeepers. The revolution underway in finance going on now has the potential to be even more consequential than the one that happened back in the 70's. While financial innovation transformed many practices in the industry, its institutions remained intact. The financial world today is still lorded over by a relatively small collection of bankers, clearing houses and regulators. Digital technology, however, is making finance exponentially more democratic. Crowdfunding and microlending have made it possible for people to acquire financing who never could before. New payment systems like Square, Paypal and Apple Pay have made it easier for merchants to accept electronic payment. SYSTEM AND METHOD FOR PROTECTING ELECTRONIC MONEY TRANSACTIONS Yet digital currency is something else altogether because it represents a decentralized form of money that is more secure, more fungible and more functional than anything we’ve seen before. More than a mere store of value or medium of exchange, digital money has the potential to be more transformative than anything we’ve seen before. B. XO Transforming Aspect Real MONEY To e- MONEY The value of money at the moment is experiencing a significant shift where the amount of wealth that can be owned by individuals can increase and increase all because of the availability of financial transactions in instrumentation and measurement in the method of financial electronics. when we are in the real money era, namely currency and demand, we always have a variety of physical evidence of the value of money, either in the form of whole or in the form of checks, can go forward or check backwards, and withdrawals are limited and require space and the place also takes a lot of time in making the value of money as a transaction tool which of course greatly nullifies a business in a mega project that requires fast and limited cash flow in times and times that are fast and appropriate in disbursing the value of money to customers, owners and founders also every member of the community who is competent in the business of value money. in the era of industry that is growing rapidly, especially the attraction of pure technology for industrial processes that are prolonged and developing continuously, transaction tools are needed that can move the economic rotation on a macro and cash basis in a micro manner quickly, precisely and easily and credibly can also be accountable. makes it easy for us to develop new and renewable industrial methods and techniques for excavating techniques on planets outside the earth and the solar system. some comparative tool for the value of money that is now on earth as we know it is NPV, where the NPV value in the era of financial electronics transactions will accelerate and slow down which is more measurable and controlled and reduces human error both intentional and incidental: 1. The NPV in the micro sense is the difference between disbursed expenditure and income by using the social opportunity cost of capital as a factor discount, or in other words a cash flow that is expected to be discounted in the future. 2. NPV in the sense of macro is money in the present is worth more than the same as inflation, and earnings from alternative investments that can be made during the intervening time. In other words, a dollar earned in the future won't be as much as one earned in the present. the main difference between the profitability index and net present value how in the era of real money when people or individuals could hoard money such as hoarding rice and wheat barns and corn that needed a place, moths and rust could damage it and require up-to-date maintenance and maintenance costs and this raises the value of money which drops dramatically. our tendency to return to the era of the Barter era in which without proper management of the value of money but in the era of financial electronics all did not need to be stockpiled such as hoarding rice, corn and wheat but kept in the place of financial electronics which were also more private and safe to manage without super tight guard because it has been protected by a system of qualified financial electronic instruments and measurements. of course the value of money transactions are more useful and efficient are also effective and penetrate the value of money for better and more effective prosperity as well as energy for all of us. C. XO Discounted Cash Flow and the Time Value of Money Aspect Time value of money concepts are the cornerstone of modern finance. finance. What are "Discounted Cash Flow" and the "Time Value of Money?" Discounted cash flow DCF is an application of the time value of money concept—the idea that money that will be received or paid at some time in the future has less value, today, than an equal amount collected or paid today. The DCF calculation finds the value appropriate today—the present value—for the future cash flow.The term "discounting" applies because the DCF "present value" is always lower than the cash flow future value. In modern finance, "time value of money" concepts play a central role in decision support and planning. When investment projections or business case results extend more than a year into the future, professionals trained in finance usually want to see cash flows presented in two forms, with discounting and without discounting. Financial specialists, that is, want to know the time value of money impact on long-term projections. Two Central Terms: Present Value and Future Value In discounted cash flow analysis DCF, two "time value of money" terms are central: Present value (PV) is what the future cash flow is worth today. Future value (FV) is the value that flows in or out at the designated time in the future. A $100 cash inflow that will arrive two years from now could, for example, have a present value today of about $95, while its future value is by definition $100. For each cash flow event, the present value is less than the corresponding future value, except for cash flow events occurring today, in which case PV = FV). The further into the future before a cash flow event occurs, the more discounting lowers the present value below its future value. the total of all of the cash flow present values for the cash flow series, across a timespan extending into the future, is the net present value (NPV) of a cash flow stream. DCF is center stage when decision makers and investors evaluate potential investments, action proposals, or purchases. Looking forward in time, the analyst projects cash inflows and outflows (cash flow streams) the investor can expect from each of these. Other things being equal, analysts will recommend the action or investment with the more substantial cash flow NPV, as the "better business decision." When first hearing the definition of discounted cash flow, many people understandably react with comments like these: "It sounds like fiction" or "The time value of money cannot refer to real value because DCF does not measure real cash flow" or "It's an interesting calculation, but there's no tangible value involved." However, business professionals recognize that the results of discounting calculations do represent real tangible value, readily seen when they state the time value of money concept like this: Having the use of money for some time has a value that is tangible, measurable, and real. Discounted cash flow (DCF) is one application of this concept, while interest paidfor a loan is another. With DCF, the discounting lowers the present value PV of future funds below the future value FV of the funds for at least three reasons: Opportunity. Funds you have now could (in principle) be invested now, and gain return or interest between the present and the future time. You cannot use now funds that you will not have until a "future" time. Risk. Funds you have now are not at risk, but funds arriving in the future are uncertain. A well-known proverb states this principle more colorfully: "A bird in the hand is worth two in the bush." Inflation. A sum you have today will very likely buy more than an equal amount you will not have until years in future. The buying power of money decreases over time due to inflation. What future money is worth today is called its present value (PV) and what it will be worth in the future when it finally arrives is called not surprisingly its future value (FV). The right to receive a $100 payment one year from now (the future value) might be worth to us today $95 (its present value). Present value, in other words, discounts to a value below future value. Present Values for a Cash Flow Stream When the analysis concerns a series of cash inflows or outflows coming at different future times, the series is called a cash flow stream. Each future cash flow has its value today (its present value). The sum of these "present values" is the "net present value" for the cash flow stream. Consider an investment today of $100, that brings net gains of $100 each year for six years. The future values and present values of these cash flow events might look like this: One 6-Year cash flow stream, as Future Values (FV) and Present Values (PV) at two discount rates. All three sets of bars represent the same investment cash flow stream. Black bars stand for cash flow figures in the currency units when they arrive in the future (future values). Green and Blue bars are values of the same cash flows now, in present value terms. The net values in the legend show that after five years, the net cash flow expected is $500, but the Net present value (NPV) today is discounted to something less. The next section explains the role of the discount rate (a percentage) and time periods in determining NPV. Interest Rates and Time Periods in Discounting The size of the discounting effect depends on two things: the amount of time between now and each future payment (the number of discounting periods) and an interest rate called the discount rate. The example shows that: As the number of discounting periods between now and the cash arrival increases, the present value decreases. As the discount rate (interest rate) in the "present value" calculations increases, the present value decreases. Whether you will or will not calculate present values yourself, your ability to use and interpret NPV / DCF figures will benefit from a simple understanding of the way that interest rates and discounting periods work together to create DCF. If you Many if not most business people outside of finance, are unfamiliar with "time value of money" terms and calculations. The subject becomes approachable, however, if the explanation begins by noting that DCF mathematics are very closely related to that is familiar to most people:calculations for interest growth and compounding. Remember briefly how interest calculations work. The FV formula looks into the future and might ask, for instance: What is the future value (FV) in one year, of $100 invested today (the PV), at an annual interest rate of 5%? FV1 = $100 ( 1 + 0.05)1 = $105 When the FV is more than one period into the future, as most people know, interest compounding takes place. Interest earned in earlier periods begins to "earn interest on itself," in addition to interest on the original PV. Compound interest growth is delivered by the exponent in the FV formula, showing the number of periods. What is the future value in five years of $100 invested today at an annual interest rate of 5%?. FV5 = $100 ( 1 + 0.05)5 = $128 The same formula can be rearranged to deliver a "present value" given a "future value" and "interest rate" for input, as shown. Now, the formula starts in the future and looks backward in time, toward today. The formula now asks: What is the value today of a $100 payment arriving in one year, using a discount rate of 5%? PV1 = ($100) / (1.0 + 0.05)1 = $100 / (1.05) = $95 You should be able to see why PV will decrease if we either (a) increase the interest rate, or (b) increase the number of periods before the FV arrives. What is the present value of $100 we will receive in 5 years, using a 5% discount rate? PV5 = $100 / (1.0 +0.05)5 = $100 / (1.276) = $75.13 When the FV is more than one period into the future, as most people know, interest compounding takes place. Interest earned in earlier periods begins to compound, in addition to interest on the original PV. Compound interest growth is delivered by the exponent in the FV formula, showing the number of periods. What is the future value in five years of $100 invested today at an annual interest rate of 5%?. FV5 = $100 ( 1 + 0.05)5 = $128 When discounting is applied to a series of cash flow events, a cash flow stream, as illustrated in the graph example above, net present value for the stream is the sum of PVs for each FV: Year-end discounting for a stream of n future cash flow events (FVs). Should You Use Mid-Period (or Mid-Year) Discounting? What Difference Does it Make? Finally, note two commonly used variations on the examples shown thus far. The cases above and most textbooks present first the "Period-end" (or "Year-end") discounting. Period-end discounting is the more frequently used DCF approach. The approach, moreover, usually turns up as the default approach for spreadsheet and calculator DCF functions. Period-End Discounting With the period-end approach, discounting works as though all cash flow occurs on the last day of each period. When periods are one year in length, of course, analysts call this the year-end approach. With year-end discounting, all of the period's cash flow is assumed to occur on day 365 of the year. Mid-Period Discounting Some financial analysts, however, prefer to assume that cash flows are distributed more or less evenly throughout the period. For them, discounting should, therefore, be applied when the cash flows during the period. Calculating present values this way is mathematically equivalent to saying that all cash flow occurs at mid-period. For this reason, this approach is called mid-period discounting. And, of course, the name mid-year discounting applies when periods are one year in length. What Are the Differences Between the Two Approaches? Period-end discounting is more severe (has a more substantial discount effect) than the mid-period approach. Period-end calculations are more severe than mid-period versions because they impact all of the period's cash flow for the full period. You can see how this works mathematically from the formulas in the next section. The period-end approach divides each FV value by a more substantial discount factor than do mid-period calculations. Some analysts prefer to describe the difference between approaches by saying the "period-end" discounting is the more conservative approach. Those preferring the other approach say that discounting mid-period is more accurate. Remember that the discount rate recognizes the values of opportunity, risk, and inflation—values that can change as time passes. Mid-period discounting comes closer, they say, to applying the discounting effect precisely when cash flows. Formulas for Mid-Period Discounting The methods below show NPV calculations for the mid-year approach (at panel top) and for discounting with periods other than one year (at mid-panel). The first NPV formula shows how the present value formula applies for mid-year discounting. And, the second NPV formula shows the calculation for periods other than one-year. In any case, the business analyst will want to find out which of the above discount methods is preferred by the organization's financial specialists, and why, and follow their practice (unless there is justification for doing otherwise). Choosing a Discount (Interest) Rate for Cash Flow Analysis The analyst will also want to find out from the organization's financial specialists which discount rate the organization uses for discounted cash flow analysis. Financial officers who have been with an organization for some time, usually develop good reasons for choosing one discount rate or another as the most appropriate rate for the organization. In private industry, many companies use their own cost of capital (or a weighted average cost of capital) as the preferred discount rate. Government organizations typically prescribe a discount rate for use in the organization's planning and decision support calculations. In the United States, for instance, the Office of Management and Budget (OMB) publishes a quarterly circular with prescribed discount rates for Federal Government use. Financial officers may use a higher discount rate for investments or decisions viewed as risky, and a lower discount rate when expected returns from a proposed action come with less risk. The higher "discount rate" is a hedge against risk, because it puts relatively more emphasis (weight) on near-term returns compared to distant future returns. Comparing Competing Investment Proposals with DCF and NPV Consider two competing investments in computer equipment. Each calls for an initial cash outlay of $100, and each returns $200 over the next five years making for a net gain of $100. But the timing of the returns is different, as shown in the table below (Case Alpha and Case Beta), and therefore the present value of each year's gains is different. The sum of each investment's "present values" is called the discounted cash flow (DCF) or "net present value" (NPV). Using a 10% discount rate again, we find: Timing CASE Alpha CASE Beta Net Cash Flow "Present Value" Net Cash Flow "Present Value" Now – $100.00 – $100.00 – $100.00 – $100.00 Year 1 $60.00 $54.54 $20.00 $18.18 Year 2 $60.00 $49.59 $20.00 $16.52 Year 3 $40.00 $30.05 $40.00 $30.05 Year 4 $20.00 $13.70 $60.00 $41.10 Year 5 $20.00 $12.42 $60.00 $37.27 Total Net CFA = $100.00 NPVA = $60.30 Net CFB = $100.00 NPVB = $43.12 Comparing the two investments, the larger the early returns in Case Alpha lead to a better net present value (NPV) than the later large return in Case Beta. Note especially the Total line for each present value column in the table. This total is the net present value (NPV) of each cash flow stream." When choosing alternative investments or actions, other things being equal, the one with the higher NPV is a better investment. What Roles Do DCF and NPV Play in Business Case Analysis? In brief, an NPV / DCF view of the cash flow stream should probably appear with a business case summary when: The business case deals with an "investment" scenario of any kind, to compare different uses for funds. The business case covers a long period (two or more years). Inflows and outflows change differently over time. For example, the most substantial "inflows" come at a different time from the most substantial "outflows." Two or more alternative cases for comparison differ concerning cash flow timing within the analysis period. D. XO Net Present Value (NPV) as a Capital Budgeting Method What is net present value and how is it used in capital budgeting? Companies often use net present value as a capital budgeting method because it's perhaps the most insightful and useful method to evaluate whether to invest in a new capital project. It is more refined from both a mathematical and time-value-of-money point of view than either the payback period or discounted payback period methods. It is also more insightful in certain ways than the profitability index or internal rate of return calculations. What Is Net Present Value? Net present value is one of many capital budgeting methods used to evaluate potential physical asset projects in which a company might want to invest. Usually, these capital investment projects are large in terms of scope and money, such as purchasing an expensive set of assembly-line equipment or constructing a new building. Net present value uses discounted cash flows in the analysis, which makes the net present value more precise than of any of the capital budgeting methods as it considers both the risk and time variables. A net present value analysis involves several variables and assumptions and evaluates the cash flows forecasted to be delivered by a project by discounting them back to the present using information that includes the time span of the project (t) and the firm's weighted average cost of capital (i). If the result is positive, then the firm should invest in the project. If negative, the firm should not invest in the project. Capital Projects Using Net Present Value Before you can use net present value to evaluate a capital investment project, you'll need to know if that project is a mutually exclusive or independent project. Independent projects are those not affected by the cash flows of other projects. Mutually exclusive projects, however, are different. If two projects are mutually exclusive, it means there are two ways of accomplishing the same result. It might be that a business has requested bids on a project and a number of bids have been received. You wouldn't want to accept two bids for the same project. That is an example of a mutually exclusive project. When you are evaluating two capital investment projects, you have to evaluate whether they are independent or mutually exclusive and make an accept-or-reject decision with that in mind. Net Present Value Decision Rules Every capital budgeting method has a set of decision rules. For example, the payback period method's decision rule is that you accept the project if it pays back its initial investment within a given period of time. The same decision rule holds true for the discounted payback period method. Net present value also has its own decision rules, which include the following: Independent projects: If NPV is greater than $0, accept the project. Mutually exclusive projects: If the NPV of one project is greater than the NPV of the other project, accept the project with the higher NPV. If both projects have a negative NPV, reject both projects. Example: Calculation of Net Present Value Say that firm XYZ Inc. is considering two projects, Project A and Project B, and wants to calculate the NPV for each project. Project A is a four-year project with the following cash flows in each of the four years: $5,000, $4,000, $3,000, $1,000. Project B is also a four-year project with the following cash flows in each of the four years: $1,000, $3,000, $4,000, $6,750. The firm's cost of capital is 10 percent for each project, and the initial investment is $10,000. The firm wants to determine and compare the net present value of these cash flows for both projects. Each project has uneven cash flows. In other words, the cash flows are not annuities. Following is the basic equation for calculating the present value of cash flows, NPV(p), when cash flows differ each period: NPV(p) = CF(0) + CF(1)/(1 + i)t + CF(2)/(1 + i)t + CF(3)/(1 + i)t + CF(4)/(1 + i)t Where: i = firm's cost of capital t = the year in which the cash flow is received CF(0) = initial investment To work the NPV formula: Add the cash flow from Year 0, which is the initial investment in the project, to the rest of the project cash flows. The initial investment is a cash outflow, so it is a negative number. In this example, the cash flows for each project for years 1 through 4 are all positive numbers. Tip: You can extend this equation for as many time periods as the project lasts. To calculate the NPV for Project A: NPV(A) = (-$10,000) + $5,000/(1.10)1 + $4,000/(1.10)2 + $3,000/(1.10)3 + $1,000/(1.10)4 = $788.20 The NPV of Project A is $788.20, which means that if the firm invests in the project, it adds $788.20 in value to the firm's worth. NPV Disadvantages Although NPV offers insight and a useful way to quantify a project's value and potential profit contribution, it does have its drawbacks. Since no analyst has a crystal ball, every capital budgeting method suffers from the risk of incorrectly estimated critical formula inputs and assumptions, as well as unexpected or unforeseen events that can affect a project's costs and cash flows. The NPV calculation relies on estimated costs, an estimated discount rate, and estimated projected return. It also can't factor in unforeseen expenses, time delays, and any other issues that come up on the front or back end, or during the project. Also, the discount rate and cash flows used in an NPV calculation often don't capture all of the potential risks, assuming instead the maximum cash flow values for each period of the project. This leads to a false sense of confidence for investors, and firms often run different NPV scenarios using conservative, aggressive, and most-likely sets of assumptions to help mitigate this risk. Alternative Evaluation Methods In some cases, especially for short-term projects, simpler methods of evaluation make sense. The payback-period method calculates how long it will take to earn back the project's initial investment. Although it doesn't consider profits that come in once the initial costs are paid back, the decision process might not need this component of the analysis. The method only makes sense for short-term projects because it doesn't consider the time value of money, which renders it less effective for multiyear projects or inflationary environments. The internal rate of return (IRR) analysis is another often-used option, although it relies on the same NPV formula. IRR analysis differs in that it considers only the cash flows for each period and disregards the initial investment. Additionally, the result is derived by solving for the discount rate, rather than plugging in an estimated rate as with the NPV formula. The IRR formula result is on an annualized basis, which makes it easier to compare different projects. The NPV formula, on the other hand, gives a result that considers all years of the project together, whether one, three, or more, making it difficult to compare to other projects with different time frames. D. XO Aspect NPV on The Next-generation digital payment technology Use Due Cash payment system with anyone You can make, share, or receive payments from anyone in the U.S. who has a phone number or email account regardless if they are actually using the Due Cash payment system and digital wallet. All they need to do is create a Due account to claim or make their payment. Find others you know with a Due account simply by syncing your smartphone contacts. All personal and financial data is encrypted and protected on Due’s secure servers. We work tirelessly to ensure that our security system meets or even exceeds the current security industry standards. Our next-generation digital payment technology guards against any type of unauthorized transaction. If you believe that there has been unauthorized activity on your Due digital wallet . If you have lost your phone or believe it is being used in an unauthorized way, you can protect your Due digital wallet by visiting Passwords & Authorizations within your online account settings. Here, you can revoke access from your phone so it will log out of any active sessions within your Due digital wallet. Only use your Due digital wallet and eCash payment system with people you know. We don’t permit merchants to make sales via Due or offer buyer or seller protection. E-CASH INDUSTRY The advancement of technology has helped electronic payments grow significantly. For example, in 1968 the exchanging of electronic data became commonplace for anyone looking to transfer money. In 1974, Robert Moreno patented technology for smart cards, which was followed by the first ATMs in the United States. Before the decade was over, electronic terminals called, “EFTPOS” (meaning, for non-cash bank payments) were being used in the United States. Five short years later in 1984, email was being used by enterprises everywhere in the financial sector to communicate with customers. Cash without acknowledging the release of the first PC by IBM in 1981. The PC made it possible to develop microelectronics, which would quickly allow for microprocessors to be installed in a credit card. David Chaum, a U.S. citizen and brilliant mathematician, became the head of cryptography at the Dutch national research center CWI. Dr. Chaum was responsible for the invention of secure digital cash, along with the idea of blind signatures for untraceable payments. This resulted in the founding of the first electronic payment system in the world, DigiCash. Unfortunately, DigiCash went bankrupt in 1998 and sold its assets to eCash Technologies. However, DigiCash had already left an impact everywhere in the eCash world. At one American bank, the customers had already embraced the eCash idea, with 90% of its depositors using the system. At the “Real World Crypto” conference held at Stanford University January 6, 2016, Chaum was back with information on a new plan for encryption, called PrivaTegrity which he is working on with a whole team of experts from other universities. This group of academic partners hopes to allow a system that will fully allow secret and anonymous communication, including eCash capabilities, to be totally secure and be fast enough to work as a smartphone app. It is unknown if the project is fully coded and tested. Particularly compelling was Dr. Chaum’s claim that we may be able to have a “civil society electronically without the possibility of covert mass surveillance.” Dr. Chaum’s DigiCash wasn’t the only company exploring the electronic cash industry . The 2000’s saw impressive gains in the use and acceptance of eCash as a result of advances in technology. Some of the most notable occurrences have been: Bitcoin, a digital asset and a payment system, was invented in 2009. Google’s mobile payment system, Google Wallet, is released in 2011. Following in the steps of Google, Apple, Android, and Samsung release mobile payment and digital wallets services in 2014 and 2015. The United States makes the switch to EMV cards – which stands for Europay, MasterCard, and Visa – in 2016. HOW DOES ECASH WORK? How exactly does eCash work? To have a better understanding, let’s first familiarize ourselves with how money traditionally flows using eCash. Withdrawal. Users have the ability to convert money from their eCash accounts into eCash coins. However, access can only be granted to the eCash account if the user can sign the withdrawal request. The signature is checked against the public key that has been registered with the ecash account since the coins are accessed using a password-encryption. Payment. In order to pay a specified amount, a set of coins that equal the desired amount must be selected. If you were using the on-line ecash system, the set of coins would be encrypted for the bank through the bank’s unique public key. The shop then deposits the payment at their bank, who then credits the merchant’s eCash account, as long as all coins are valid. The accepted coins are added to the database of spent coins to prevent them from being spent again. Payment deposit. Again, using the on-line ecash system, this protocol would be completed by the shop or merchant. The most important component of the payment protocol is that the payment deposit will be made specifically to the payee. Coin redemption. Coins can be directly returned to the mint without using them in a payment if they’ve expired, need to be refreshed, or need improved distributions. Recovery. If coins that have been lost they can be recovered through a protocol carried out between the user and the mint. Now that we’re aware of how the money flows, it’s time to realize that the money flow can only be accomplished through the cooperation of the following four components: Issuers. These can either be financial institutions, or non-bank institutions. Customers. These are the individuals who spend eCash. Merchants or traders. These are the vendors who receive eCash. Regulators. Authorities or state tax agencies. Once all of the parties are involved, the basic idea of an eCash transaction involves at least one of the components; the issuer, customer, and merchant who will accept the eCash in exchange for the products or services rendered. There are then three general stages for the transaction to be completed. Account Setup The Consumer has to open an account with a bank that provides eCash accounts. The merchant who is willing to participate in eCash transactions must have access to these accounts with a number of banks in order to support the transaction of the consumer who may use any of these various bank accounts. However, the banks will manage both the consumers’ and merchants’ accounts. Purchase Once the consumer decides to purchase a good or service, he or she will transfer the eCash amount from their bank account to either their electronic purse (on-line system) or eCash token (off-line system). The eCash payment will then be transferred to the merchant so that they are compensated for the goods or services provided. The eCash payment will be either a softcopy (via software) or token based. For most transactions through the Internet, the process will be encrypted. Authentication After receiving the electronic payment from the consumer, the merchant will receive a confirmation from the bank. The bank will then authenticate the electronic transaction. During this same step, the bank will debit the consumer’s account for the amount that was agreed upon. Finally, the merchant delivers the products or services and will inform the bank to deposit the payment into their bank account. Although these stages may sound complicated if you’re new to eCash, digital cash actually acts very similarly to physical cash. The obvious difference is that electronic is digital. Here’s an example of how an eCash system would work: A bank creates a unique digital bank note that includes a message which issues a serial number (with a primary or public key) and value of the note. This is sent to Person A. Whenever Person A withdraws this note, it will use Chaum’s Cryptographic technique. This will alter the serial number. As a result, the bank will not recognize the note when it is withdrawn. The note will be returned to the bank with a new serial number. Person A will then pay Person B electronically by sending the bank note to him or her. Person B will check the note’s validity by decrypting it through the bank’s public key to check its signature, a.k.a. the new serial numbers validity. Person B ships the note off to the bank, which checks the serial number to confirm that this specific bank note has never been spent before. The serial number, which is different from the note number that was withdrawn by Person A, will prevent the bank from linking the two transactions. The final phase includes the enabling bank checking the new serialized key account for the amount of the transaction. If validated, the amount will be transferred via a depository notice. Person B, who is using the same encrypting technique, will return the depository notice with the new serialize account. Again, the enabling bank will be aware of who the merchant is. The bank will only know that that money is available and can be used as a payment. In other words, think of this eCash transaction as a debit card transaction except that there is no other information besides the amount of the transaction, making the process secure. WHAT IS CRYPTOCURRENCY AND HOW IS IT OBTAINED? You simply can’t have a discussion involving eCash and not mention cryptocurrency. Ever since Bitcoin launched in 2009, the cryptocurrency has captured the minds of lawmakers, financial institutions, and the general public as a whole. But, what exactly is cryptocurrency and how can it be obtained. Cryptocurrency Explained In it’s simplest form, cryptocurrency is a digital or virtual currency that uses cryptography for security purposes to prevent counterfeit. Cryptography, for those who are unaware, means the science of coding and decoding messages so that they remain secure. During the coding process, a key is used which is known to only the sender and the recipient. What makes cryptocurrency unique is that it is not issued by any type of authority figure, such as a central bank. Because of this, cryptocurrency is in theory, immune to interference from bodies of government. Another feature that cryptocurrency is known for is that users can remain anonymous. The issue with anonymity is that it can be used for illegal activity like money laundering and tax evasion. In most cases, cryptocurrency works simply when two parties transfer funds between each other. Since this involves cryptography, either a public or private keys like an RSA signature must be used to complete the transaction. Each transaction is recorded on a public ledger, also called either a distributed ledger or a blockchain, that is visible to anyone in the network. Personal information is not shared, though. Besides security and anonymity, cryptocurrency is appealing to users because there are only minimal processing fees, as opposed to the expensive fees that most banks and financial institutions charge for transfers. The major concern involving cryptocurrency is that because it’s a virtual or digital currency, an individual’s balance can be erased if there is a security breach or computer crash. In most instances, however, this information can be easily backed-up on the cloud. Finally, the price of cryptocurrencies is that the value can fluctuate sporadically. A Quick Word Regarding Bitcoin While the idea behind cryptocurrency existed years before, cryptocurrency came to the forefront in 2009 when Bitcoin was released. Bitcoin was created by a computer programmer going by the pseudonym Satoshi Nakamoto. Bitcoin is an open-source, peer-to-peer digital currency that is completely decentralized. Today, Bitcoin is accepted by more than 6,000 companies that include Overstock and Virgin Galactic. As explained by the Congressional Research Service, “Like the U.S. dollar, the Bitcoin has no intrinsic value in that it is not redeemable for some amount of another commodity, such as an ounce of gold. Unlike a dollar, a Bitcoin has no physical form, is not legal tender, and is not backed by any government or any other legal entity, and its supply is not determined by a central bank.” (In part of this Congressional Research Service report it states that the dollar is a legal currency, yet doesn’t specifically say the Bitcoin isn’t legal, it just eludes that it isn’t traceable, and therefore a concern to governments.) Through cryptographic techniques “special users on the bitcoin network, known as miners, to gather together blocks of new transactions and compete to verify that the transactions are valid—that the buyer has the amount of Bitcoin being spent and has transferred that amount to the seller’s account. For providing this service, miners that successfully verify a block of transactions are rewarded by the network’s controlling computer algorithm with 25 newly created Bitcoins.” How to Obtain Cryptocurrency Whether it’s Bitcoin or one of the hundreds of alternatives on the crypto-current market, (called Altcoins, meaning an alternate cryptocurrencies – which basically means an alternative to Bitcoin) you must first download the free and open-source software. After that, there are two basic ways to obtain cryptocurrencies, according to Forbes; “mine them using a powerful computer and buy them through a crypto exchange.” Mining Bitcoins and Altcoins, as described in PCWorld, “involves writing a short script to run in the command prompt. It’s only a few steps, which you must follow exactly to ensure success.” However, this can put a lot of stress on your computer because it must “solve complex problems that keep the respective cryptocurrency’s peer-to-peer infrastructure secure.” In exchange for their work, miners are given pieces of Bitcoins. If you prefer to purchase Bitcoins or Altcoins, you can only do so through select and limited markets. This includes currencies on major exchanges like VaultofSatoshi, Kraken, Coinex, and BTC-e. What makes cryptocurrencies like Bitcoin interesting is that they can be used as an investment tool and a transactional platform. PROPERTIES OF ECASH For electronic payments to be as effective and efficient as paper and coin currency, electronic payments should include the following properties: Security One of the main concerns surrounding eCash is how secure it is. When the determined amount is being transferred between consumers, merchants, and banks the prevention of any unauthorized individuals like hackers intercepting, or even changing, the content of the messages, such as the dollar amount, should be addressed. This is commonly addressed through encryption and special serial numbers that give the bank the power to verify the authenticity of the transaction. Besides online security, physical security should be taken into account. For example, if a hard drive crashes or a smart card is stolen, the eCash could also be lost. Thanks to advances in technology, eCash can be stored on secure cloud databases so that it can be easily recovered. Privacy Privacy, in regards to eCash, is the anonymity of the consumers who have made the payment. As with coins and paper notes, the payee should not be able to be linked or be traced during transactions. Privacy is important because consumers’ privacy should be protected from being monitored by financial surveillance. Anonymity, however, does present a number of concerns like counterfeiting, money laundering, and blackmailing in extreme circumstances. Keep in mind that the more anonymity that is offered the less security there will be. Portability One of the benefits of electronic cash is that it’s portable and can be taken with you no matter where you are in the world. In fact, the portability of eCash could replace traditional wallets since it can be stored on your smartphone on in the cloud. Transferability Another advantage of eCash is that it can be transferred from the payee to the payer without being referred to a bank. The ability to transfer between parties should be easy and convenient, just as with traditional paper and coins. Parties should also be able to exchange funds electronically to each other no matter where they are in the world. Divisibility When discussing divisibility, eCash denominations should be able to be divided into small amounts. This makes smaller transactions possible between parties. Arguably on the main challenges for divisible systems having the ability to divide the value into smaller amounts that will eventually be equal to the original value. Previously, divisibility systems were solved by Eng, and Okamoto’s scheme, Okamoto’s scheme and Okamoto and Ohta’s scheme. More recently, International Association for Cryptologic Research shared a system by Patrick Märtens that is based on bounded accumulators and “a new technique to prove that several revealed values are inside an accumulator.” As a whole, eCash payments do not just have to contain the features listed above. To truly replace traditional money transfers, electronic payments have to be more convenient, easier-to-use, and ubiquitous – meaning that eCash networks must work with each other. ECASH SYSTEMS It’s common practice for eCash systems like PayPal, eCash, WebMoney, and Payoneer to sell their electronic currency directly to the end user. However, it’s not uncommon for other systems to sell their currency through third-party digital currency exchangers. For example, the M-Pesa system transfers money via mobile devices in third world countries like Africa, India, Afghanistan, and Eastern Europe. In some situations, community currencies, such as local exchange trading systems (LETS) and the Community Exchange System, work with electronic transactions. In the above examples, these systems are known as centralized systems where the user’s real identity is still known. This has raised privacy concerns over centralized systems, however, it has also been argued that being able to identify users is a benefit if they need to be contacted or identified. Decentralized Systems You can’t talk about decentralized systems without discussing how cryptocurrencies play a part in these systems. Cryptocurrencies, as noted previously, are not regulated by any governing body that can verify the peer-to-peer transaction, which occurs anonymously. Because these systems are decentralized, the value of the currency can fluctuate quickly and often. Besides Bitcoin, are here some other examples of cryptocurrencies that use decentralized systems: Monero launched in 2014 and “is built on principles of privacy, decentralization, and scalability.” Litecoin was founded in 2011, Litecoin is “a peer-to-peer Internet currency that enables instant, near-zero cost payments to anyone in the world.” Dogecoin is an open-source peer-to-peer currency that allows you to easily send money online. Peercoin claims that it’s more energy efficient and the world’s first proof-of-stake coin that was created in 2012. Primecoin is an innovative cryptocurrency that uses as “unique form of proof-of-work based on prime numbers.” Ripple doesn’t rely on the Bitcoin code and focuses on improving cross-border payment offerings. Nxt also uses its own code that was developed from scratch. Contactless Payment Systems These are credit cards, debit cards, smart cards, or mobile devices that rely on radio-frequency identification (RFID) or near field communication (NFC) to make secure transactions that do not require signature or PIN verification. The most common examples are contactless payment systems are mobile subsystems and digital wallets. Examples include: The ‘electronic purse’ that was introduced by Mondex and National Westminster Bank in 1994. The payment system called Mobipay that was implemented by Telefónica and BBVA Bank in Spain in 2005. Venmo originally launched as a mobile payment system through SMS in 2010. It became a social app where friends could pay for small purchases like a cup of coffee. Google Wallet, which launched on September 19, 2011, allows users to store all of their credit card and debit card online. Easytrip was initiated in 2012 in Ireland as a way to pay road tolls. The tolls were charged to the user’s mobile phone account or prepaid credit. The O2 Wallet was introduced in 2012 and could be loaded with regular bank accounts or cards. The service shut down in 2014. In October 2014 Apple Pay was released and is similar to Google Wallet, except it’s exclusive to iPhone users. Samsung Pay debuted in 2015 to rival Apple Pay. It has similar features but is available for Samsung devices. GNU Taler is an anonymous and open source electronic payment system that will be available to the public in 2016. THE BENEFITS OF ECASH The greatest benefit with eCash is that allows individuals to make financial transactions online in real-time. Because financial information is stored electronically, consumers no longer have to carry cash, only mobile devices or smart cards to complete a transaction. eCash also gives merchants more opportunities to partake in commerce. Those are a just a few of the benefits of eCash. Here’s a closer look at the advantages that users and merchants can enjoy. Users Instead of waiting for a bank to approve a transaction, such as for a check to clear, users can send and exchange funds instantly without ever having to step inside of a bank. In fact, you can use electronic payment systems anywhere in the world, as long as you can get online. Furthermore, eCash prevents consumers from having to pay withdrawal fees that are commonly by banks whenever you visit the ATM or the interest rates that incur with credit cards. In fact, people can exchange money directly to each other without the involvement of a third party. Merchants Merchants also have a lot to gain by embracing eCash systems. For starters, these systems can become a marketing tool for their eCommerce business. When a merchant uses a payment system, whether it’s PayPal, Apple Pay, or Primecoin, the consumer can feel secure in making a purchase of the site since the online marketplace uses a trusted payment system. Some payment systems also provide merchants with coupons to help entice consumers. Another perk is that the fees charged by eCash payment systems are usually lower than what credit card companies charge. eCash also gives merchants from anywhere in the world to partake in the global marketplace. For example, an online merchant in India can sell their products to anyone in the world and accept payments with just one-click of a button. Family members in Uganda can exchange funds between each other, even if none of them have a traditional bank account. Finally, both merchants and customers can enjoy the security, and if needed the anonymity, that eCash provides. Since each transaction still needs to be verified, the chances of fraud are greatly reduced. International Exchange This was touched upon earlier, but one of the greatest advantages of eCash is that it’s going to increase the opportunities for international exchange. No matter where you live in the world, you can sell your product to international consumers and receive a payment in real-time. For example, you could be a record shop in Germany that sells a $20 vinyl to a customer in Australia or a clothing manufacturer in America who sells products to customers in Brazil for $15 a shirt. Not only are the fees cheaper, it makes it easier to sell items to a global marketplace by using a fast, secure, and convenient eCash system. DISADVANTAGES OF ECASH While electronic payment systems have been improving their security features, this is one area that remains a concern for users and merchants. Despite needing to verify transactions, fraud is still a common occurrence, thanks to hackers. For example, a hacker can find their way into the bank accounts of unsuspecting victims which could lead to instances of identity theft or having your funds stripped away. Hackers could also attempt to counterfeit the money by recreating the eCash form. Additionally, there is a concern that eCash can become easily available to criminal and terrorist groups if they use a decentralized system. This makes it harder for governments to track these types of organizations since it’s more difficult to find a paper trail. eCash also makes it more challenging to monitor and collect both income and taxes, so it’s possible for people to easily transfer funds and hide assets in offshore accounts. One of the troubling limitations of eCash is that while it has the chance to be used by low-income individuals or those in undeveloped countries, it will be an uphill battle for these groups to use an eCash system since a computer, mobile device, and internet connection are required for eCash transactions. Until this problem is addressed, which is an area that organizations like the Bill and Melinda Gates Foundation are working on, not everyone can enjoy the benefits of eCash. Finally, there are concerns about what happens when you can’t access your funds, such as during a power failure. Or, what happens when your records or coins are lost because of a security breach. These are rare occurrences and have been considered as more and more information is stored in the cloud. ECASH REGULATIONS In 1996, Patrick G. Goshtigian discussed the regulations of eCash in a paper published at the Anderson Graduate School of Management at UCLA. In regards to security, Goshtigian stated; “The legal challenges of E-cash entail concerns over taxes and currency issuers. In addition, consumer liability from bank cards will also have to be addressed (currently $50 for credit cards). E-cash removes the intermediary from currency transactions, but this also removes much of the regulation of the currency in the current system. Tax questions immediately arise as to how to prevent tax evasion at the income or consumption level. If cash-like transactions become easier and less costly, monitoring this potential underground economy may be extremely difficult, if not impossible, for the IRS. The more daunting legal problem is controlling a potential explosion of private currencies. Large institutions that are handling many transactions may issue electronic money in their own currency. The currency would not be backed by the full faith of the United States, but by the full faith of the institution. This is not a problem with paper currency, but until the legal system catches up with the digital world, it may present a problem with cybercash.” For over twenty years we are still facing numerous legal questions surrounding eCash since it not only can cross borders but also because it’s difficult to track. These issues, especially the governmental oversight of currencies, will continue to be an issue with eCash use. To have a better understanding of the laws and regulations regarding eCash, here are how several different countries are handling cryptocurrencies like Bitcoin: The United States Bitcoin is legal in the United States and was classified as a convertible decentralized virtual currency by the U.S. Treasury in 2013. In 2015, the Commodity Futures Trading Commission, CFTC, started to classify Bitcoins as a commodity. Currently, New York state is the only state to have granted a license to a Bitcoin exchange in 2015. The company, itBit, now has a bank-like status in the U.S. Canada According to the Library of Congress, “Canada does not have a specific law or regulation that regulates bitcoins.” However, Bitcoin is not considered legal tender in Canada and has been briefly mentioned during anti-money laundering and anti-terrorist financing regulations for virtual currencies. Germany Germany considers Bitcoins like foreign currency. While not recognized as legal tender, Bitcoins “are units of value that have the function of private means of payment within private trading exchanges, or they are substitute currencies that are used as a means of payment in multilateral trading transactions on the basis of legal agreements of private law. ” The United Kingdom While Bitcoins are not regulated in the UK, it’s been reported that “Her Majesty’s Revenue and Customs has classed bitcoins as “single purpose vouchers,” rendering any sales of them liable to a value-added tax of 10–20%.” Japan As of this writing, Japan has no laws regarding the use of Bitcoins. Haruhiko Kuroda, the governor of the Bank of Japan (BOJ), has said that the BOJ was “researching issues of bitcoins, but I have nothing to say regarding bitcoins at the moment.” China China is one of the few countries in the world where Bitcoins are essentially illegal. In fact, the country announced the “Notice on Precautions Against the Risks of Bitcoins,” in 2013 stating that it prohibits banking and payment institutions from dealing in Bitcoins. India While there doesn’t appear to be any legal framework that regulates, restricts, or bans the use of Bitcoins in India, the country’s banking institutions have warned customers about the potential hazards that Bitcoin can present. This was most evident with the 2013 release of the Reserve Bank of India’s public notice. Russia Bitcoin is currently in dispute in Russia. In 2014, Legislation was introduced by the Ministry of Finance that would view Bitcoin transactions as a misdemeanor and would impose fines for dealing with cyber currencies and monetary surrogates. Brazil As noted by the Library of Congress, “On October 9, 2013, Brazil enacted Law No. 12,865, which created the possibility for the normalization of mobile payment systems and the creation of electronic currencies, including the Bitcoin. The Law provides, among other things, for the payment arrangements and payment institutions that comprise the Brazilian Payment System.” Overall, most central banks across the world are cautioning individuals from using virtual currencies like Bitcoin. In most cases though, most authorities are allowing citizens to use virtual currencies, even though they’re not accepted as legal tender. THE FUTURE OF ECASH Jerry Kuch, Yacov Yacobi, and Paul England, cryptography researchers at Microsoft, proclaimed that eCash will be the future of money. According to these researchers “we’ll carry little cards with computer chips called e-wallets and exchange encrypted bits of information for things we need.” They also predicted that we’ll be able to: Make one-click micro-payments online. Have anonymous payments online. Use non-traditional devices like a smartphone to make payments. Does any of this sound familiar? It should. Because those predictions have already come to fruition to make this an exciting time for electronic payments. But, where are we headed next? Dan Schutzer, Senior Technology Consultant, BITS, believes that the future of digital cash could go in four different directions: Digital cash would be replaced by an alternative, such as a pre-paid or debit card, or a new start-up payment processor that meets the security and privacy needs of customers. Digital cash will continue to grow and may even get embraced by governments and banks. This could already be in happening. In 2012 the MintChip was introduced by the Royal Canadian Mint. The chip was attached to SD cards and contained a private key that was signed by the mint. Digital cash will only exist in niche markets, similar to how PayPal started because it was the preferred payment gateway for eBay users. Bitcoin and other blockchain alternatives will be replaced by improved financial platforms. For the purpose of this guide, this is where we expect eCash will bring to the future of the payments industry. Bitcoin Will Be Replaced By the Blockchain One interesting development that has occurred is the work that IBM has contributed to the blockchain that could have serious implications. In March 2012. Reuters reported that IBM was working on a way to create a digital cash and payment system for major currencies. While this would use the blockchain idea, the “transactions would be in an open ledger of a specific country’s currency such as the dollar or euro.” In December 2015, this became a reality when it announced that the Open Ledger Project had been created. This new blockchain was supported by IBM, Intel, JP Morgan, the Linux Foundation, and several big banks. As stated in Fortune, “The Open Ledger Project isn’t proposing another cryptocurrency, but rather it wants to use blockchain technology to create tools to allow businesses to build a distributed ledger for anything they can dream up–from exchanging automotive titles in seconds to paying retail suppliers when a sale is made.” Because this new ledger is connected and distributed, the changes that have been made in the database will be easy to track, as well as be more difficult to forge. Currently, Honduras is using this technology to keep tabs on land titles and musicians are able to let fans pay them directly for their music. There won’t be just one blockchain. There were be several versions that could bring an end to Bitcoin, primarily because these specific blockchains will be more exclusive. Unlike Bitcoin, which basically allows anyone in, the blockchain will be a part of a limited community. Besides the Open Ledger Project, there are a number of innovative companies embracing the blockchain. Bitwage uses the blockchain to make international payroll cheaper. Voatz is aiming to make elections cheaper and more transparent through smartphones and the blockchain. And, Chronicled has merged RFID tags with the Blockchain in order to validate luxury goods which will curb counterfeit items. Mobile Payments Will Go Mainstream This shouldn’t come as a surprise. With more than 6 billion in the world having access to a mobile device, and that figure expected to grow, electronic payments via mobile devices will become more common. This will be accomplished with near-field communication. With NFC chips already installed in most mobile devices, the transfer of electronic payments is already taking place. Users simply have to download an app and will be able to transmit banking and payment data when placed near readers. And, unlike debit cards, mobile devices are capable of displaying the payment details in real-time. Mobile devices, however, are only a part of the potential that NFC chips present. NFC chips can be installed in wearable devices, like a watch, wristband, or ring. Instead of using plastic or even pulling out our phones, we’ll be able to tap or swipe or use a wearable device to complete a purchase. On top of NFC chips, the use of proximity beacons will enhance the growth of mobile payments. Companies will be able to target customers based on their location. For example, as a person approaches a store that they are already a customer of, the store will send you a coupon. The customer can then make the purchase through their mobile device and pick-up their item in swift motion. The convenience of making electronic payments with your mobile device isn’t the only benefit. As noted in Forbes, “Ridding ourselves of cash will require new thinking on customer interaction, crime, value, and even cars.” For example, you could take the EZ Pass idea and apply that to drive-throughs at fast food restaurants where payments are collected from a device located on your vehicle. Without cash registers and physical cash, the amount of robberies and pickpockets could be reduced. Governments could track how money is moved in real-time and use that information to solve problems like poverty. Check-out lines and transaction costs will also decrease. Beyond the blockchain, mobile devices, and wearables, we may even experience digital currency exchanges by using biometrics. Companies like Apple and Samsung are already using fingerprints to verify transactions. But, don’t be surprised if someday soon people will have chips implanted in their hands that will contain payment information. That’s not to say that cash will be completely eradicated. There may still always be a need for physical cash, however, digital cash will continue to evolve quickly. E. XO NPV TO Object in What Is an E-payment System? An e-payment system is a way of making transactions or paying for goods and services through an electronic medium, without the use of checks or cash. It’s also called an electronic payment system or online payment system. Read on to learn more. The electronic payment system has grown increasingly over the last decades due to the growing spread of internet-based banking and shopping. As the world advances more with technology development, we can see the rise of electronic payment systems and payment processing devices. As these increase, improve, and provide ever more secure online payment transactions the percentage of check and cash transactions will decrease. Electronic payment methods One of the most popular payment forms online are credit and debit cards. Besides them, there are also alternative payment methods, such as bank transfers, electronic wallets, smart cards or bitcoin wallet (bitcoin is the most popular cryptocurrency). E-payment methods could be classified into two areas, credit payment systems and cash payment systems. 1. Credit Payment System Credit Card — A form of the e-payment system which requires the use of the card issued by a financial institute to the cardholder for making payments online or through an electronic device, without the use of cash. Still, one of the most popular e-payment methods are credit and debit card #payments E-wallet — A form of prepaid account that stores user’s financial data, like debit and credit card information to make an online transaction easier. Smart card — A plastic card with a microprocessor that can be loaded with funds to make transactions; also known as a chip card. 2. Cash Payment System Direct debit — A financial transaction in which the account holder instructs the bank to collect a specific amount of money from his account electronically to pay for goods or services. E-check — A digital version of an old paper check. It’s an electronic transfer of money from a bank account, usually checking account, without the use of the paper check. E-cash is a form of an electronic payment system, where a certain amount of money is stored on a client’s device and made accessible for online transactions. Stored-value card — A card with a certain amount of money that can be used to perform the transaction in the issuer store. A typical example of stored-value cards are gift cards. Pros and cons of using an e-payment system E-payment systems are made to facilitate the acceptance of electronic payments for online transactions. With the growing popularity of online shopping, e-payment systems became a must for online consumers — to make shopping and banking more convenient. It comes with many benefits, such as: Reaching more clients from all over the world, which results in more sales. More effective and efficient transactions — It’s because transactions are made in seconds without wasting customer’s time. It comes with speed and simplicity. Convenience. Customers can pay for items on an e-commerce website at anytime and anywhere. They just need an internet connected device. As simple as that! Lower transaction cost and decreased technology costs. Expenses control for customers, as they can always check their virtual account where they can find the transaction history. Today it’s easy to add payments to a website, so even a non-technical person may implement it in minutes and start processing online payments. Payment gateways and payment providers offer highly effective security and anti-fraud tools to make transactions reliable. E-commerce, as well as m-commerce, is getting bigger year after year, so having an e-payment system in your online store is a must. It’s simple, fast and convenient, so why not have one? Still, one of the most popular payment methods are credit and debit card payments, but people also choose some alternatives or local payment methods. If you run an online business, find out what your target audience needs and provide the most convenient and relevant e-payment system. ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ The Examples NPV concept in Energy Industries E.XO e- Money and working capital Turn Over Working capital turnover ratio : we examine the working capital turnover ratio. The working capital turnover ratio is an activity ratio that measures how many times working capital is used to generate sales, ie revenue, during a specific time period. As such, the ratio is a good indicator of company growth and liquidity and is calculated as follows: Working capital turnover = net sales working capital The ratio is sometimes known as the capital turnover ratio, as net sales to working capital, or by the acronym WCTO. Working capital is generally calculated as the company’s current assets less its current liabilities. Current assets include inventory and accounts receivable together with all other assets that will be held for less than 12 months. Current liabilities include accounts payable and payroll as well as any other liabilities, eg taxes, due in under a year. Example Company XYZ’s net sales year-to-date are €189,445, its current assets are €85,361, and its current liabilities are €43,262. Using the above equation, company XYZ’s working capital turnover is: 189,445 85,361 – 43,262 = 4.5 This means that during the period, the company has used (and of course replaced) its working capital 4.5 times to generate sales. Interpretation of results As with the majority of turnover ratios, the results should be interpreted on an industry sector basis to provide an accurate benchmark. However, in general, a high working capital turnover ratio usually indicates that the company is actively generating sales from its working capital, which is a positive indicator of future prospects. If the ratio increases significantly over the years however, or seems excessively high in relation to sector peers, this could indicate that the company is overtrading, ie taking on large orders that it does not have the resources to fulfil, and/or that a high proportion of the business’s assets are fixed assets (ie long-term assets such as buildings and machinery that are not easily converted into cash). Being top-heavy on fixed assets brings the available working capital down and means that the company lacks liquidity. This lack of liquidity could mean that the company would struggle to pay all of its debts. Meanwhile, a low working capital turnover ratio could point to inefficiencies as the company is not generating a significant return on its assets, which can signal financial difficulty. Some companies, particularly those that are going through periods of rapid growth, do however run with negative working capital as they are able to generate cash extremely quickly. This is often the case in the food outlet or restaurant industry as customers pay for the goods up front. If the company’s working capital turnover is negative, this may be a sign of an efficient business strategy, particularly if inventory is tactically low, ie just sufficient to meet demand. A well-known organisation that has operated using this business model is McDonalds. Many companies on the verge of bankruptcy also have negative working capital turnover though, so it is important to make sure that a company with negative working capital turnover has both low inventory and accounts receivable. If the company has high accounts receivable, this may indicate that it is not collecting its debts efficiently and that products have not been paid for up front. This, combined with a low inventory, would mean that the company is owed money and yet has no stock to sell to cover these debts. What is working capital? One of the most common needs for working capital occurs when a business must increase its inventory and accounts receivable in order to grow its customer base and revenues. Let’s first be clear on what the term ‘working capital’ really means. From an accounting standpoint, working capital = current assets – current liabilities. Current assets are short term in nature and can be converted quickly to cash, primarily accounts receivable and inventory. Current liabilities are obligations that come due within one year, primarily accounts payable and short term debt. The term “working capital” is often used incorrectly when talking about the financing needs of a business, especially for a start up business. For example, if a start up business is looking to finance typical operating expenses like an advertising budget and salaries for new employees, what it really needs is “long term capital” or equity. If a business is unable to support the expenses for advertising and salaries then most likely it is under-capitalized. If the company is projecting losses for the first year then most likely “equity” is what is needed, not “working capital.” Money used to fund growth in short term assets like inventory and accounts receivables is correctly considered “working capital” financing. you need to understand how money flows through your business. In other words, you need to understand your “working capital cycle.” The cycle consists of: How quickly current assets (e.g. accounts receivables & inventory) are turned into cash How quickly that cash is used to pay current liabilities (e.g. accounts payable). The working capital cycle is also referred to as the “Turnover Rates” for accounts receivables, inventory, and accounts payable. Turnover Rates. Your business’s historical turnover rates are the first step in forecasting your growing working capital needs. You need to analyze your actual income statement and balance sheet to find out the following information: How many days of inventory do I keep on hand (called inventory turnover)? How many days do customers take to pay me (called accounts receivable turnover)? How many days do I take to pay my vendors (accounts payable turnover)? The chart below shows how to calculate your annual turnover ratios. Now that you have calculated your turnover rates, you are ready to forecast your working capital needs based on your plan for growth. This growth will require carrying higher levels of inventory and accounts receivable, which will require additional working capital financing. But how much is the question. To do that calculation, you need to have a projected income statement, which includes both projected sales and cost of goods sold figures. Using these figures and the working capital turnover ratios (see calculations above), you can get an estimate of how much additional working capital is needed to grow your business. See the example below. Using these projected balances, you can figure out the changes to working capital by simply calculating the difference between your projected and historical balances for accounts receivable, inventory, and accounts payable. So what does this all mean? Simply, your new working capital needs equals the change in Accounts Receivable plus Inventory minus Accounts Payable. For our example, if you project to grow your sales from $500,000 to $700,000, you will need additional working capital of $21,496. How to fund additional working capital needs For small businesses who have been in operation and generating profits, you will most likely have reinvested some of the profits back into the business (this is called retained earnings). You reinvest your profits into your inventory, use the profits to carry increased levels of receivables or you use the profits to pay down your trade suppliers. In essence, the retention of these profits increases the working capital that enables you to grow. If you did not earn or retain sufficient profits to finance your own growth, however, you need to turn to borrowings for your increased working capital needs. Generally speaking, small businesses find it difficult to obtain working capital financing from traditional banking sources. As a result, you might be tempted to turn to non-bank lending sources such as factoring, merchant cash advance, and online lenders. You should know that these sources of working capital financing charge annual percentage rates (“APR”) of 50% or more! What are alternative sources of working capital financing? Small business owners needing to finance inventory and accounts receivables may be eligible for financing from community lenders, such as Community Development Financial Institutions (“CDFIs”). CDFIs are nonprofit, private financial institutions that provide affordable lending to small business owners who are not being served by the banking community. Conclusion When growing your small business, you will need to make an additional investment in inventory and accounts receivable. How much working capital you need can be estimated by creating projections that use your historical “Turnover Rates” for inventory, accounts receivable, and accounts payable as shown in the example above. Working capital is the difference between a company’s current assets and current liabilities. It is a financial measure, which calculates whether a company has enough liquid assets to pay its bills that will be due in a year. When a company has excess current assets, that amount can then be used to spend on its day-to-day operations. Current assets, such as cash and equivalents, inventory, accounts receivable and marketable securities, are resources a company owns that can be used up or converted into cash within a year. Current liabilities are the amount of money a company owes such as accounts payable, short-term loans and accrued expenses, which are due for payment within a year. Positive vs negative working capital Having positive working capital can be a good sign of the short-term financial health for a company because it has enough liquid assets remaining to pay off short-term bills and to internally finance the growth of their business. Without additional working capital, a company may have to borrow additional funds from a bank or turn to investment bankers to raise more money. Negative working capital means assets aren’t being used effectively, and a company may a liquidity crisis. Even if a company has lots invested in fixed assets, it will face financial challenges if liabilities come due too soon. This will lead to more borrowing, late payments to creditors and suppliers and, as a result, a lower corporate credit rating for the company. When negative working capital is ok Depending on the type of business, companies can have negative working capital and still do well. Examples are grocery stores like Walmart or fast-food chains like McDonald’s that can generate cash very quickly due to high inventory turnover rates and by receiving payment from customers in a matter of a few days. These companies need little working capital. Products that are bought from suppliers are immediately sold to customers before the company even gets a chance to pays the vendor or supplier. In contrast, capital-intensive companies that manufacture heavy equipment and machinery usually can’t raise cash quickly, as they sell their products on a long-term payment basis. Since they can’t sell fast enough, cash won’t be available immediately during tough financial times, so having enough working capital is desirable. Adjustments to the working capital formula While the above formula and example are the most standard definition of working capital, there are other more focused definitions. Examples of alternative formulas: Current Assets – Cash – Current Liabilities (excludes cash) Accounts Receivable + Inventory – Accounts Payable (this represents only the “core” accounts that make up working capital in day-to-day operations of the business) MANAGING WORKING CAPITAL Working capital management has an impact on the liquidity, profitability and financial health of the organization. If the following main components of Working Capital are managed, working capital as a whole can be managed: INVENTORY MANAGEMENT A balanced inventory should be maintained to optimize working capital requirements. Inventory should not remain idle nor should the company lose out on sales / production because it does not have sufficient inventory in hand. cash conversion cycle (CCC) A higher, or quicker, inventory turnover decreases the cash conversion cycle (CCC). A lower, or slower, inventory turnover increases the CCC. The CCC measures the number of days it takes a company to generate and collect revenue from its inventory assets. Stated differently, the CCC measures the time it takes a company to purchase its inventory and then collect cash from its sales. Cash conversion cycle = days inventory outstanding + days sales outstanding - days payables outstanding A company's inventory turnover affects the CCC in that it is used in the calculation for days inventory outstanding: Days inventory outstanding = average inventory / cost of goods sold per day When a company's inventory turnover is high, meaning it cycles through inventory quickly, it reduces the average inventory, and therefore decreases the days inventory outstanding. When a company's inventory turnover is low, meaning inventory sits on its books for an extended period of time, it increases the average inventory, and therefore increases the days inventory outstanding. When the days inventory outstanding is low, it reduces the CCC. This means a company is able to collect cash from revenues quickly; the business is able to use its working capital in other areas. When the days inventory outstanding is high, it increases the CCC. This means it takes a company longer to collect its cash from revenues, which causes potential cash flow issues to arise when it company needs working capital. What is a Working Capital Cycle? The Working Capital Cycle for a business is the length of time it takes to convert net working capital (current assets less current liabilities) all into cash. Businesses typically try to manage this cycle by selling inventory quickly, collecting revenue from customers quickly, and paying bills slowly, to optimize cash flow. the influence of e-money can change the value of accelerating cash on the turnover of working capital and investment and continuous innovation Steps in the Working Capital Cycle For most companies, the working capital cycle works as follows: The company purchases, on credit, materials to manufacture a product (for example, they have 90 days to pay for the raw materials). The company sells its inventory in 85 days, on average (days payable outstanding) The company receives payment from customers for the products sold in 20 days, on average. In the first step of the process, the company get the materials it needs to produce inventory but doesn’t initially have any cash expense (purchased on credit under accounts payable). In 90 days’ time, it will have to pay for those materials. Eighty-five (85) days after buying the materials, the finished goods are sold, but the company doesn’t receive cash for them initially (sold on credit under accounts receivable). Twenty (20) days after selling the goods, the company receives cash, and the working capital cycle is complete. Working Capital Cycle Formula Based on the above steps, we can see that the working capital cycle formula is: Working Capital Cycle Sample Calculation Now that we know the steps in the cycle and the formula, let’s calculate an example based on the above information. Inventory days = 85 Receivable days = 20 Payable days = 90 Working Capital Cycle = 85 + 20 – 90 = 15 This means the company is only out of pocket of cash for 15 days before receiving full payment. Positive vs Negative Working Capital Cycle In the above example, we saw a business with a positive, or normal, cycle of working capital. Sometimes, however, businesses enjoy a negative working capital cycle where they collect money faster than they pay off bills. Sticking with the above example, imagine now that the company decides to become a “cash only” business with its customers. By only accepting cash (no credit cards or payment terms), its accounts receivable days become 0. Let’s use the same formula again and calculate their new cycle time. Inventory days = 85 Receivable days = 0 Payable days = 90 Working Capital Cycle = 85 + 0 – 90 = –5 Now, this means the company receives payment from customers 5 days before it has to pay its suppliers. Financing Growth and Working Capital Businesses with normal/positive cycles often require financing to cover the period of time before they receive payment from customers and clients. The is especially true for rapidly growing companies, and hence the idea that it’s possible to “grow the company out of money.” To solve this problem, companies often arrange to have financing provided by a bank or other financial institution. Banks will often lend money against inventory and will also finance accounts receivable. For example, if a bank believes the company is capable of liquidating its inventory at 70 cents on the dollar, it may decide to provide for 50% of the cost of the inventory (to give the bank a buffer in case the inventory has to be liquidated). Additionally, if a company sells products to businesses that have high creditworthiness, the bank may finance those receivables (also called “factoring”) by providing early payment. By combining one or both of the above two banking solutions, a company can reduce the capital required to finance their operations. Working Capital Cycle in Financial Modeling In financial modeling and valuation, one of the key set of assumptions that are made about a company is its accounts receivable days, inventory days, and accounts payable days. When building a financial model, it is important to clearly lay out these assumptions and understand their impact on the business. Operating working capital needs to be kept as low as possible, even down into negative values, in order to improve the cash position. To control the stock level, the purchasing volume needs be fine tuned to the latest sales trend and forecast. When you’re working on reducing the capital locked up in inventory, start by keeping inventory on hand levels low and ordering just-in-time inventory to meet your customer demands. Ideally your customers should be paying you before you need to pay your suppliers. The advantages are obvious: When your working capital is negative, you do not need to tap into your bank account when procuring inventory. As long as you’ve not paid your suppliers for the inventory on hand, you can cash in when it’s sold to the customer. Finally, you only pay the supplier only after you receive the cash from the customer. This way, you would receive a cash benefit from the supplier and have a positive cash balance. In this scenario, a growing business would not feel the strain of pre-financing a larger inventory level, as the inventory would be pre-financed by the suppliers. To unlock capital tied up in your inventory, you need: Supplier payment terms that are longer than the payment terms of the customer Inventory turnover that is faster than the payment term difference An effective way to control your inventory levels is to introduce maximum stock levels that keep the working capital low or even negative while balancing the benefits of lower cash-out with the potential reduction of some supplier discounts. Reducing Stock Levels Inventory management plays an important role in reducing working capital, as the goal is to sell out the inventory to the minimum stock level before the supplier needs to be paid. However, you also need to be careful of overselling, as this can cause you to end up in an out of stock situation. With an inventory management solution like TradeGecko, you’ll have access to sales intelligence reports that can help you decide on the optimal inventory levels for your product based on your sales history. Once you’ve set your optimal stock levels after taking customer demand and safety stock into account, the next step is to calculate your reorder points to ensure you’ll always have enough stock on hand for your customers. There is always the temptation for wholesalers to increase their order sizes for a supplier discount or rebate, which is why it’s important to set maximum stock levels for your products. To measure the benefits of the available cash, you have to look at your financing situation. Let’s assume that you have a company loan of $1 million. If you can reduce the stock level on average by $100,000, you can reduce the loan to $900,000. That way, you save the interest rate on the $100,000 as you do not need to finance the stock. If you keep the loan at $1 million or have no loan at all, you have just increased your cash position by $100,000. You can now use this money to invest in other opportunities for growing your business that will earn you more profit. In case you have an attractive investment opportunity but financing resources are used to the limit, you can look into freeing up cash from careful stock management to finance these investments. However, if you choose to maintain high inventory levels, you’ll face the opportunity costs of losing out on these growth opportunities. At the same time, additional side effects may complicate the assessment. For example, reducing the order size may result in higher handling costs even as it reduces the warehouse costs. As a business owner, you need to evaluate your specific business case and make sure the benefits outweigh the additional costs when deciding. Reducing Order Size Some suppliers require a minimum order quantity and this quantity could already be more than needed. In this case, you should start negotiating better terms to improve your cash flow management. When faced with a minimum order quantity, try to negotiate longer payment terms for this specific order or splitting payments in line with the expected sales of the product. A side note on negative working capital Negative working capital has many benefits to a business in stable times and times of growth, but it can become a risk when customer demand is shrinking. If sales are declining dramatically and aren’t anticipated in a reduced order size, you will face an increase in working capital and an increase to your expenses. At the same time, slow sales also result in a cash drain, leaving a business stuck with little available cash due to capital locked up in stock. For a B2B business, the absolute amount of working capital can be huge and the potential outflow of cash, significant. So as a business owner, you need to be prepared for this risk and have alternative financing options ready to minimize the impact to your business. Conclusion It is essential to manage your stock level according to your individual sales cycle and financing capabilities. If you place large orders to cash-in supplier discounts it might not be to your overall advantage. The best starting point is to find out the stock level that really supports your business at minimal cash out. Only afterwards you might consider extending an order and receive a supplier discount, because now you are aware of the extra cash required to get this discount. With this preparation you are in the position to reduce the working capital and improve your cash flow. That way, you can put yourself in a better position to control your spending - get discounts or expand the business. F. XO cash money rotation system in micro finance Resources, events, agents (accounting model) Resources, events, agents (REA) is a model of how an accounting system can be re-engineered for the computer age. REA was originally proposed in 1982 by William E. McCarthy as a generalized accounting model, and contained the concepts of resources, events and agents (McCarthy 1982). REA is a popular model in teaching accounting information systems (AIS), but it is rare in business practice. Most companies cannot easily dismantle their legacy data warehouse systems or are unwilling to do so. Workday, Inc., IBM Scalable Architecture for Financial Reporting, REATechnology, and ISO 15944-4 are exceptions.[1] Fallon and Polovina (2013) have however shown how REA can also add value when modelling current ERP business processes by providing a tool which increases the understanding of the implementation and underlying data model. The REA model gets rid of many accounting objects that are not necessary in the computer age. Most visible of these are debits and credits—double-entry bookkeeping disappears in an REA system. Many general ledger accounts also disappear, at least as persistent objects; e.g., accounts receivable or accounts payable. The computer can generate these accounts in real time using source document records. REA treats the accounting system as a virtual representation of the actual business. In other words, it creates computer objects that directly represent real-world-business objects. In computer science terms, REA is an ontology. The real objects included in the REA model are: goods, services or money, i.e., resources business transactions or agreements that affect resources, i.e., events people or other human agencies (other companies, etc.), i.e., agents These objects contrast with conventional accounting terms such as asset or liability, which are less directly tied to real-world objects. For example, a conventional accounting asset such as goodwill is not an REA resource. There is a separate REA model for each business process in the company. A business process roughly corresponds to a functional department, or a function in Michael Porter's value chain. Examples of business processes would be sales, purchases, conversion or manufacturing, human resources, and financing. At the heart of each REA model there is usually a pair of events, linked by an exchange relationship, typically referred to as the "duality" relation. One of these events usually represents a resource being given away or lost, while the other represents a resource being received or gained. For example, in the sales process, one event would be "sales"—where goods are given up—and the other would be "cash receipt", where cash is received. These two events are linked; a cash receipt occurs in exchange for a sale, and vice versa. The duality relationship can be more complex, e.g., in the manufacturing process, it would often involve more than two events (see Dunn et al. [2004] for examples). REA systems have usually been modeled as relational databases with entity-relationship diagrams, though this is not compulsory. The philosophy of REA draws on the idea of reusable Design Patterns, though REA patterns are used to describe databases rather than object oriented programs, and are quite different from the 23 canonical patterns in the original designs pattern book by Gamma et al. Research in REA emphasizes patterns (e.g., Hruby et al. 2006). Here is an example of the basic REA pattern shown as an E-R diagram: The pattern is extended to encompass commitments (promises to engage in transactions, e.g., a sales order), policies, and other constructs. Dunn et al. (2004) provide a good overview at an undergraduate level (for accounting majors), while Hruby et al. (2006) is an advanced reference for computer scientists. Here is a diagram of an extended REA pattern (from Hruby et al. 2006) REA is a continuing influence on the electronic commerce standard ebXML, with W. McCarthy actively involved in the standards committee. The competing XBRL GL standard however is at odds with the REA concept, as it closely mimics double-entry book-keeping. REA is now recognised by The Open Group (OG) within the TOGAF® standard (an industry standard enterprise framework), as one of the modelling tools which is useful for modelling business processes. The model Money Creation We consider a closed economy that is composed of N agents, one central bank and one commercial bank. The central bank is in charge of determining the amount of money base and the required reserve ratio. Agents are endowed with a certain amount of money at the very beginning of the model and then trade with each other randomly. The commercial bank provides depositing services to savers and lending services to borrowers. The economy is considered to be in an insufficient demand situation where extra supply of goods can be realized as long as there is extra demand. Money Creation money creation and money circulation in a credit economy. Our special attention is paid to the role of debt in the two processes. With the agent-based modeling approach, macro phenomena are well founded in micro-based causalities. A hypothetical economy composed of a banking system and multiple traders is proposed. Instead of being a pure financial intermediary, the banking system is viewed as the center of money creation and an accelerator of money circulation. Agents finance their expenditures not only by their own savings but also through bank loans. Through mathematical calculations and numerical simulation, we identify the determinants of money multiplier and those of velocity of money. In contrast to the traditional money creation model, the money multiplier is determined not only by the behavior of borrowing but also by the behavior of repayment as well. The velocity of money is found to be influenced by both money-related factors such as the expenditure habits of agents with respect to their income and wealth and debt-related factors such as borrowing and repayment behaviors of debtors and the reserve requirements faced by banks. Theoretical analysis The economic processes described above include two types of interactions: the interaction between agents and the banking system which constitutes the money creation process and the interaction among agents themselves which constitutes the income–expenditure process. Thanks to those debt-related behaviors, these two processes are not independent from each other, but intertwined with complicated feedback loops. For example, the behavior of lending of the banking system does not only changes the stocks of money and debt through the money creation process, but also enables borrowers to make debt-financed expenditure in addition to those financed by their own income or wealth, which then results in changes in the flows of income for others. On the other hand, the behavior of repayment, which is constrained by the income flow for indebted agents in the income–expenditure dynamics among exchanging agents, also affects the money creation process by annihilating money and debt simultaneously. Therefore, when we study the determinants for money multiplier and those for velocity of money circulation, we cannot isolate the two processes. In addition, we should be aware that there exist two different types of equilibrium where the artificial economy eventually falls into: the stock equilibrium where the stocks stop changing and the flow equilibrium where the flows stop changing. When we simulate the model under the initialization and follow the evolution of the stock variables (the money aggregate and the total amount of debt) and the flow variable (aggregate income/expenditure) as shown in Fig. 2 and Fig. 3 respectively, we can find that the stock equilibrium and the flow equilibrium are not reached at the same time. Fig. 2 Fig 3 With this in mind, we next calculate the equilibrium value for the money multiplier and velocity of money by employing the mean-field approximating approach. The Conclusion the behavioral foundations of the money creation and money circulation processes with an agent-based model. The role of debt is taken into special consideration, and the banking system is characterized as the center of money creation and the accelerator of money circulation. With the mean-field approximation method, we obtained the theoretical expressions of the money multiplier and the velocity of money and studied the dependence of these two variables on different parameters through computer simulation. As a result, three major conclusions can be drawn from these analyses. First, we found that the expenditure habits of the public determine the extent to which the economy relies on debt. A clear phase transition between a credit economy and non-credit economy is observed when people vary their propensity to spend. It is also proven that unlike the traditional money creation model, the money multiplier is influenced not only by the borrowing behavior that creates money but also the repayment behavior that destructs money as well. Finally, both money-related and debt-related factors, namely the expenditure habit of agents, the borrowing and repayment behavior of debtors and the monetary policies the banking system is subject to, are found to be the determinants of the velocity of money. Money supply Money supply data are recorded and published, usually by the government or the central bank of the country. Public and private sector analysts have long monitored changes in the money supply because of the belief that it affects the price level, inflation, the exchange rate and the business cycle. The business cycle, also known as the economic cycle or trade cycle, is the downward and upward movement of gross domestic product (GDP) around its long-term growth trend.[1] The length of a business cycle is the period of time containing a single boom and contraction in sequence. These fluctuations typically involve shifts over time between periods of relatively rapid economic growth (expansions or booms), and periods of relative stagnation or decline (contractions or recessions). Business cycles are usually measured by considering the growth rate of real gross domestic product. Despite the often-applied term cycles, these fluctuations in economic activity do not exhibit uniform or predictable periodicity. The common or popular usage boom-and-bust cycle refers to fluctuations in which the expansion is rapid and the contraction severe. In recent years economic theory has moved towards the study of economic fluctuation rather than a 'business cycle' – though some economists use the phrase 'business cycle' as a convenient shorthand. The explanation of fluctuations in aggregate economic activity is one of the primary concerns of macroeconomics. The main framework for explaining such fluctuations is Keynesian economics. In the Keynesian view, business cycles reflect the possibility that the economy may reach short-run equilibrium at levels below or above full employment. If the economy is operating with less than full employment, i.e., with high unemployment, Keynesian theory states that monetary policy and fiscal policy can have a positive role to play in smoothing the fluctuations of the business cycle. Beside the Keynesian explanation there are a number of alternative theories of business cycles, largely associated with particular schools or theorists in heterodox economics. A common alternative within mainstream economics is real business cycle theory. Nowadays other notable theories are credit-based explanations such as debt deflation and the financial instability hypothesis. The latter two gained interest for being able to explain the subprime mortgage crisis and financial crises. This theory explains the nature and causes of economic cycles from the viewpoint of life-cycle of marketable goods. The theory originates from the work of Raymond Vernon, who described the development of international trade in terms of product life-cycle – a period of time during which the product circulates in the market. Vernon stated that some countries specialize in the production and export of technologically new products, while others specialize in the production of already known products. The most developed countries are able to invest large amounts of money in the technological innovations and produce new products, thus obtaining a dynamic comparative advantage over developing countries. Recent research by Georgiy Revyakin proves initial Vernon theory and shows that economic cycles in developed countries overrun economic cycles in developing countries.[29] He also presumes that economic cycles with different periodicity can be compared to the products with various life-cycles. In case of Kondratiev waves such products correlate with fundamental discoveries implemented in production (inventions which form the technological paradigm: Richard Arkwright's machines, steam engines, industrial use of electricity, computer invention, etc.); Kuznets cycles describe such products as infrastructural components (roadways, transport, utilities, etc.); Juglar cycles may go in parallel with enterprise fixed capital (equipment, machinery, etc.), and Kitchin cycles are characterized by change in the society preferences (tastes) for consumer goods, and time, which is necessary to start the production. Simultaneous technological updates by all economic agents (as a result, cycle formation) would be determined by highly competitive market conditions: in case if a manufacturing technology at an enterprise does not meet the current technological environment, – such company loses its competitiveness and eventually goes bankrupt. If we consider two consumption paths, each with the same trend and the same initial level of consumption – and as a result same level of consumption per period on average – but with different levels of volatility, then, according to economic theory, the less volatile consumption path will be preferred to the more volatile one. This is due to risk aversion on part of individual agents. One way to calculate how costly this greater volatility is in terms of individual (or, under some restrictive conditions, social) welfare is to ask what percentage of her annual average consumption would an individual be willing to sacrifice in order to eliminate this volatility entirely. Another way to express this is by asking how much an individual with a smooth consumption path would have to be compensated in terms of average consumption in order to accept the volatile path instead of the one without the volatility. The resulting amount of compensation, expressed as a percentage of average annual consumption, is the cost of the fluctuations calculated by Lucas. It is a function of people's degree of risk aversion and of the magnitude of the fluctuations which are to be eliminated, as measured by the standard deviation of the natural log of consumption. Lucas' formula Robert Lucas' baseline formula for the welfare cost of business cycles is given by (see mathematical derivation below): {\displaystyle \lambda ={\frac {1}{2}}\sigma ^{2}\theta } where {\displaystyle \lambda } is the cost of fluctuations (the % of average annual consumption that a person would be willing to pay to eliminate all fluctuations in her consumption), {\displaystyle \sigma } is the standard deviation of the natural log of consumption and {\displaystyle \theta } measures the degree of relative risk aversion.[6] It is straightforward to measure {\displaystyle \sigma } from available data. Using US data from between 1947 and 2001 Lucas obtained {\displaystyle \sigma =.032}. It is a little harder to obtain an empirical estimate of {\displaystyle \theta }; although it should be theoretically possible, many controversies in economics revolve around the precise and appropriate measurement of this parameter. However it is doubtful that {\displaystyle \theta } is particularly high (most estimates are no higher than 4). As an illustrative example consider the case of log utility (see below) in which case {\displaystyle \theta =1}. In this case the welfare cost of fluctuations is {\displaystyle \lambda ={\frac {1}{2}}(.032)^{2}=.0005.} In other words, eliminating all the fluctuations from a person's consumption path (i.e., eliminating the business cycle entirely) is worth only 1/20 of 1 percent of average annual consumption. For example, an individual who consumes $50,000 worth of goods a year on average would be willing to pay only $25 to eliminate consumption fluctuations. The implication is that, if the calculation is correct and appropriate, the ups and downs of the business cycles, the recessions and the booms, hardly matter for individual and possibly social welfare. It is the long run trend of economic growth that is crucial. If {\displaystyle \theta } is at the upper range of estimates found in literature, around 4, then {\displaystyle \lambda ={\frac {1}{2}}(.032)^{2}4=.002} or 1/5 of 1 percent. An individual with average consumption of $50,000 would be willing to pay $100 to eliminate fluctuations. This is still a very small amount compared to the implications of long run growth on income. One way to get an upper bound on the degree of risk aversion is to use the Ramsey model of intertemporal savings and consumption. In that case, the equilibrium real interest rate is given by {\displaystyle r=\rho +\theta g} where {\displaystyle r} is the real (after tax) rate of return on capital (the real interest rate), {\displaystyle \rho } is the subjective rate of time preference (which measures impatience) and {\displaystyle g} is the annual growth rate of consumption. {\displaystyle r} is generally estimated to be around 5% (.05) and the annual growth rate of consumption is about 2% (.02). Then the upper bound on the cost of fluctuations occurs when {\displaystyle \theta } is at its highest, which in this case occurs if {\displaystyle \rho =0}. This implies that the highest possible degree of risk aversion is {\displaystyle \theta ^{Max}=r/g=.05/.02=2.5} which in turn, combined with estimates given above, yields a cost of fluctuations as {\displaystyle \lambda ={\frac {1}{2}}(.032)^{2}2.5=.0013} which is still extremely small (13% of 1%). Mathematical representation and formula Lucas sets up an infinitely lived representative agent model where total lifetime utility ( {\displaystyle U}) is given by the present discounted value (with {\displaystyle \beta } representing the discount factor) of per period utilities ( {\displaystyle u(.)}) which in turn depend on consumption in each period ( {\displaystyle c_{t}})[4] {\displaystyle U=\sum _{t=0}^{\infty }\beta ^{t}u(c_{t})} In the case of a certain consumption path, consumption in each period is given by {\displaystyle c_{t}^{cert}=Ae^{gt}} where {\displaystyle A} is initial consumption and {\displaystyle g} is the growth rate of consumption (neither of these parameters turns out to matter for costs of fluctuations in the baseline model, so they can be normalized to 1 and 0 respectively). In the case of a volatile, uncertain consumption path, consumption in each period is given by {\displaystyle c_{t}^{vol}=(1+\lambda )Ae^{gt}e^{-{\frac {1}{2}}\sigma ^{2}}\epsilon _{t}} where {\displaystyle \sigma } is the standard deviation of the natural log of consumption and {\displaystyle \epsilon } is a random shock which is assumed to be log-normally distributed so that the mean of {\displaystyle ln(\epsilon _{t})} is zero, which in turn implies that the expected value of {\displaystyle e^{-{\frac {1}{2}}\sigma ^{2}}\epsilon _{t}} is 1 (i.e., on average, volatile consumption is same as certain consumption). In this case {\displaystyle \lambda } is the "compensation parameter" which measures the percentage by which average consumption has to be increased for the consumer to be indifferent between the certain path of consumption and the volatile one. {\displaystyle \lambda } is the cost of fluctuations. We find this cost of fluctuations by setting {\displaystyle \sum _{t=0}^{\infty }\beta ^{t}u(c_{t}^{cert})=\sum _{t=0}^{\infty }\beta ^{t}u(c_{t}^{vol})} and solving for {\displaystyle \lambda } For the case of isoelastic utility, given by {\displaystyle u(c_{t})={\frac {c_{t}^{1-\theta }-1}{1-\theta }}} we can obtain an (approximate) closed form solution which has already been given above {\displaystyle \lambda ={\frac {1}{2}}\sigma ^{2}\theta } A special case of the above formula occurs if utility is logarithmic, {\displaystyle u(c_{t})=ln(c_{t})} which corresponds to the case of {\displaystyle \theta =1}, which means that the above simplifies to {\displaystyle \lambda =.5\sigma ^{2}}. In other words, with log utility the cost of fluctuations is equal to one half the variance of the natural logarithm of consumption.[6] An alternative, more accurate solution gives losses that are somewhat larger, especially when volatility is large.[7] Risk aversion and the equity premium puzzle However, a major problem related to the above way of estimating {\displaystyle \theta } (hence {\displaystyle \lambda }) and in fact, possibly to Lucas' entire approach is the so-called equity premium puzzle, first observed by Mehra and Prescott in 1985.[8] The analysis above implies that since macroeconomic risk is unimportant, the premium associated with systematic risk, that is, risk in returns to an asset that is correlated with aggregate consumption should be small (less than 0.5 percentage points for the values of risk aversion considered above). In fact the premium has averaged around six percentage points. In a survey of the implications of the equity premium, Simon Grant and John Quiggin note that 'A high cost of risk means that recessions are extremely destructive'.[9] Evidence from effects on subjective wellbeing Justin Wolfers has shown that macroeconomic volatility reduces subjective wellbeing; the effects are somewhat larger than expected under the Lucas approach. According to Wolfers, 'eliminating unemployment volatility would raise well-being by an amount roughly equal to that from lowering the average level of unemployment by a quarter of a percentage point G.XO. e- Cash and e- Money on Send and receive money instantly All of our payment acceptance methods are quick, we aim to get our customers their hard earned money as quickly as possible. The quickest is our Digital Wallet which allows you to instantly pay and get paid using Due Cash. Ideal for individuals and even freelancers, this new payment method is gaining in popularity, especially with the ability to use your mobile device to handle these transactions. From splitting a bill to getting reimbursed for expenses, our digital wallet is designed to simplify and speed up all your transactions. keep every part of every transaction e- money and e- cash on e- Key Pass : PCI compliance Encrypted transactions Fraud monitoring and alert tools Proprietary security features built using blockchain Ongoing and automatic security technology upgrades to our payments platform multiple digital payment options for online and mobile environments that include: Credit and Debit Card Processing Power your business with seamless credit and debit card processing. Our low-cost and highly secure processing solution is guaranteed to save your business valuable time and money. 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With our digital wallet, you'll be able to send and receive payments in real time using Due Cash. Feel free to send money anywhere in the world as our wallet works great in a global environment! Coming Soon! H. XO working capital impact cash flow Working capital represents the difference between a firm’s current assets and current liabilities. Working capital, also called net working capital, is the amount of money a company has available to pay its short-term expenses. Positive working capital is when a company has more current assets than current liabilities, meaning the company can fully cover its short-term liabilities as they come due in the next 12 months. Positive working capital is a sign of financial strength. However, having an excessive amount of working capital for a long time might indicate the company is not managing their assets effectively. Negative working capital is when the current liabilities exceed the current assets, and the working capital is negative. Working capital could be temporarily negative if the company had a large cash outlay as a result of a large purchase of products and services from its vendors. However, if the working capital is negative for an extended period of time, it may be a cause of concern for certain types of companies, indicating that they are struggling to make ends meet and have to rely on borrowing or stock issuances to finance their working capital. Understanding Cash Flow Cash Flow is the net amount of cash and cash-equivalents being transferred in and out of a company. Positive cash flow indicates that a company's liquid assets are increasing, enabling it to settle debts, reinvest in its business, return money to shareholders, pay expenses and provide a buffer against future financial challenges. Negative cash flow can occur if operating activities don't generate enough cash to stay liquid. This can happen if profits are tied up in accounts receivable and inventory, or if a company spends too much on capital expenditures. Understanding the cash flow statement – which reports operating cash flow, investing cash flow, and financing cash flow – is essential for assessing a company’s liquidity, flexibility, and overall financial performance. How Working Capital Impacts Cash Changes in working capital are reflected in a firm’s cash flow statement. Here are some examples of how cash and working capital can be impacted. If a transaction increases current assets and current liabilities by the same amount, there would be no change in working capital. For example, if a company received cash from short-term debt to be paid in 60 days, there would be an increase in the cash flow statement. However, there would be no increase in working capital, because the proceeds from the loan would be a current asset or cash, and the note payable would be a current liability since it's a short-term loan. If a company purchased a fixed asset such as a building, the company's cash flow would decrease. The company's working capital would also decrease since the cash portion of current assets would be reduced, but current liabilities would remain unchanged because it would be long-term debt. Conversely, selling a fixed asset would boost cash flow and working capital. If a company purchased inventory with cash, there would be no change in working capital because inventory and cash are both current assets. However, cash flow would be reduced by the inventory purchases. The Bottom Line A company’s working capital is a core part of funding its daily operations. However, it's important to analyze both working capital and cash flow of a company to determine whether the financial activity is a short-term or long-term event. A boost in cash flow and working capital might not be good if the company is taking on long-term debt that it doesn't generate enough cash flow to pay off. Conversely, a large decrease in cash flow and working capital might not be so bad if the company is using the proceeds to invest in long-term fixed assets that will generate earnings in the years to come. I . XO The Difference Between "Hard Money" and "Soft Money" Hard money and soft money are terms that can be understood in various contexts. In economics, it is often used to describe (hard) coin money and (soft) paper money, respectively. These terms can also be used to refer to political contributions in the United States, which can be made directly to a specific candidate (hard money) or indirectly to political parties and political action committees (soft money). The rules governing the two types of contributions differ, and it may be prudent to check these rules in detail before making a contribution. Hard and soft money can also refer to how clients pay the brokers or financial services providers, where hard money refers to direct payments for services rendered (e.g. brokerage commissions) and soft money to payments for indirect items (e.g. in settling a costly error by providing free research). Soft money arrangements in the financial industry are common, but are must usually disclosed to stakeholders and regulators. Hard Money When cash is contributed directly to a political candidate, it is known as a "hard money" contribution. These contributions may only come from an individual or a political action committee, and must follow the strict limits set forth by the Federal Election Commission (FEC). For example, during the 2017-2018 election cycle, donors were subject to the following limits: $5,000 per candidate, per election, from a non-connected committee that qualifies as a multi-candidate committee. Donating to a candidate or candidates in excess of those federal limits can result in criminal charges including fines and jail time for violating campaign finance laws. To each candidate or candidate committee per election To national party committee per calendar year To state, district & local party committee per calendar year To any other political committee per calendar year $2,500 $30,800 $10,000 (combined limit) $5,000 Soft Money When cash is contributed to a political party or political action committee (PAC) with no limits attached to the amount that can be received, this is known as a "soft money" contribution. The funds can come from individuals and political action committees as with "hard money," but they can also come from any other source, such as corporations. The law says this money can only be used for "party-building activities" such as advocating the passage of a law and voter registration, and not for advocating a particular candidate in an election. The supreme court case Citizens United says that soft money contributions can be unlimited in that they constitute a form of free speech that is protected by the First Amendment, although this ruling has remained controversial. PACs that receive unlimited funds as soft money cannot be directly linked to or directed by the political candidate or candidates that they support. This is an important caveat, since if it is found out that a candidate is dictating what message or television ad the PAC or Super PAC will air, they are considered to be directly influencing how the money is used, making it a hard money contribution—and violating campaign finance laws. Hard Money vs. Soft Money: Difference Hard Money: In the United States, political contributions are usually divided into hard money and soft money. Hard money is the money given by a contributor directly to the presidential candidate, and is limited in amount, since it is governed by the regulations of the Federal Election Commission (FEC). The FEC stipulates the guidelines as to how one can contribute, in this case. It is given directly to a particular person for his/her election activities. Soft Money: Soft money is a political contribution that is unregulated. Labor unions and corporations are allowed to give soft money, only to parties, and cannot give them to individual candidates for federal office. This can be used for party-building activities, and cannot be used for a particular candidate. These funds are mostly used for advertisements and other activities. However, with the rising problems of unfair practices and corruption seeping in due to politics, the FEC sought to regulate soft money too. There are regulations on both hard money and soft money, as of today. Z . XO Electronic Money to e- Cash Transformation What is Electronic Money Electronic money is money which exists in banking computer systems and is available for transactions through electronic systems. Its value is backed by fiat currency and it can be exchanged into physical form however its uses are often more convenient electronically. BREAKING DOWN Electronic Money Electronic money is used for purchases and transactions globally. While it can be exchanged for fiat currency, it is much more conveniently monitored and utilized through electronic banking systems and electronic processing. The value of electronic money is established by its fiat currency which makes it different from emerging cryptocurrencies. Electronic money is backed by the central bank system. However, In the United States, only a small fraction of the currency is utilized in physical form. The remaining percentage of it is held in bank vaults and also against collateral. Currency in Circulation Electronic money can be held in various accounts. Most individuals and businesses store their money with banks which provide electronic records of the cash on deposit. Other forms of stored value electronic money include digital wallets such as PayPal and Square or prepaid cards which allow users to deposit fiat currency for electronic money. With all types of stored electronic money sources the need for fiat currency varies and as such the banking system provides for this through varying means. While banks transact fiat currency to electronic money for their customers they also hold that money in vaults at their physical locations. Since the use of electronic money is more common than physical currency, banks also deposit their cash with one of the 12 Federal Reserve banks across the nation. A primary function of the U.S. Federal Reserve and its 12 supporting banks is to manage the fiat currency in physical form. Thus, the Fed also has control over the money supply through its monetary policies and open market operations. The Fed also controls the reissuance of money and the printing of new money when fiat currency is no longer available for distribution. Electronic Payment Processing In the U.S. many people receive their paychecks through direct deposit, move money with electronic fund transfers, and spend money with credit and debit cards. While physical currency still has advantages in certain situations, its role has gradually diminished. Many consumers and businesses feel that electronic money is more secure because it is not easily lost or damaged and can be available for use at nearly all merchants across the U.S. Therefore, the U.S. financial market has a secure and well established infrastructure for transacting electronic money. The primary means for electronic money transactions is through payment processing networks. In the U.S. Visa and Mastercard are the two primary payment processing networks facilitating the transactions of electronic money across the nation. Banks and financial institutions partner with electronic money networking processors to issue their customers branded network cards which facilitate the transactions of electronic money from bank accounts to merchants. Digital wallets are also available following similar transaction protocals. Electronic money is also easily transacted through e-commerce allowing consumers to shop and purchase all types of goods and services online. ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ e- MONEY = Mine On Natural Energy You ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
