In this edition of my column, I wanted to return to some of the theoretical ideas that I have touched on in the past. At Bytecoin, we are concerned with constructing a future that recalibrates the financial scales in favor of the individual. I thought it would be worthwhile to use this space to adumbrate what that kind of future might look like.
Agustín’s Crypto Conversion
On the heels of Facebook announcing the release of its Libra cryptocurrency, Agustín Carstens, head of the BIS – known as the central banker’s bank – has said that global central banks may have to issue their own digital currencies sooner than they had expected.
Dubbed “San Agustín” in his native Mexico for his role in stabilizing the Mexican economy after the price of oil collapsed in 2009, Carstens is a figure familiar to many in the crypto community, not for his banking acumen, but for the many disparaging pronouncements, he has made regarding cryptocurrencies in the past.
For evidence of his past views, all you have to do is head over to the BIS website where they still feature an interview with Carstens from just a year ago where he goes to great lengths of condescension to make sure everyone knows what little regard he and the institution he represents have for cryptocurrency.
After calling cryptocurrencies “a bubble, a Ponzi scheme,” Carstens goes on to answer a question asking whether the enthusiasm generated by cryptocurrencies among young people for finance and education was a good thing by saying:
“Glance back into the past and you will see that creating gold or money from nothing has been a regular obsession. It never worked. Even the great physicist Isaac Newton was at one point in his life obsessed by alchemy and the idea of making gold. He was very successful in a number of fields, but in this one he failed. Newton ended up as head of the British Mint.
Why? Because he could detect at once if a coin was counterfeit. After he failed in his attempt to make gold, he switched sides and sent counterfeiters to prison. So my message to young people would be: Stop trying to create money!”
How much can change in a year! Judging by Carstens recent comments, admiration has taken the place where animadversion once lived. To bring his analogy to its logical conclusion, while Isaac Newton, after long peregrinations in the dark wood of ignorance and alchemy, finally got a hold of himself and joined the respectable British Mint, the BIS has decided to do the opposite and taken up with the counterfeiters.
Hey, if you can’t beat em, join em, I guess. And who better to convert to crypto than a modern Saint Augustine (perhaps the youthful cries of “tolle, hodl! tolle, hodl!” were too much for him in the end). Now, you’d think there would be some kind of public expiation before the banks were allowed to dive in, but then again Purgatory doesn’t have a place in the “Paradise Now!” outlook of the banker.
Agustín’s change of heart is hardly unique. I’ve used this column in the past to look at the way corporate boats have begun beating back against the current of their past philosophies and public statements. So what’s going on? While the Libra news is significant, it and the evolving banking enthusiasm for crypto are just the latest external manifestations of a deeper transformation of which we are all a part.
The Technological Singularity and the Digital Twin
Everywhere you look today you encounter the sentiment that we have arrived at the end of something. Our newspaper headlines declare that our feet are firmly planted in the “Post-Truth Era,” our journals enumerate the absurdities we are faced with in “late capitalism;” to some extent everybody seems to be waiting for a shoe to drop and for something – a real end, a new beginning, some collective experience of transcendence – to occur.
The notion that we are coming to the end of something, that we are even perhaps coming to the end of ourselves as we know us, is fundamentally pessimistic except where it coincides with technological development.
Despite the shabby state of the world, and the shabby reflection of ourselves that has become all-too-clear with the tools we have built to connect with each other and augment our capacities, despite all that, there is still hope that the technology that we have built and continue to build will someday help us to iron out a few of our deficiencies and reorder life on this planet in a more harmonious way.
The breaking point, that transcendent moment we are shuffling towards, has been termed the technological singularity. The idea of the singularity has its roots in science fiction; it will occur at the moment when artificial intelligence surpasses that of humans. Over the years theorizing about the singularity has shifted from fantastic speculation to the analysis of an inevitable reality.
When this moment takes place it will alter the possibilities and limitations that shape human existence. Singularity theorists have theorized that once AI reaches a comparable level to that of humanity (which many think will happen towards the middle of this century) its transition to superintelligence will be rapid.
But the singularity is not confined to the realm of artificial intelligence alone. What is taking place right now is the structuring of a new digital reality. As I wrote about not long ago, a digital twin of reality is being born and it is taking shape around three structures: artificial intelligence, the internet of things and blockchain.
The internet of things is a means of translating perceivable and sensible phenomena from this world into the next. Using cameras, microphones and elaborate tracking devices the IoT is turning our empirical reality into a sort of prima materia for the digital world. Our cataloged material reality will form the passive base of the new world; it is the thing that will be experienced.
The things that will be experiencing this base are the actors who will possess artificial intelligence. Artificial intelligence will constitute the active principle of the digital reality, and the beings – either fully artificial or partially human – will be the agents of movement in this paradigm, capable of shaping events.
Finally, the remaining key element of the digital twin is blockchain. Blockchain technology is so important because it is capable of forming trustworthy value bridges from this world into that of the digital. Blockchain will account for the intangible qualities of physical things as they are reborn into digital space. The digital twin will also require an ever-expanding amount of space to store its things and record the actions that have taken place within it. Blockchain will facilitate the digital world’s recorded experience of time.
What Will Happen Once the Digital Twin Takes Shape?
Recently I have used this column a platform to air my imprecations against Facebook and the like, and as a result, it has become a bit too dreary for its own good. This time I’d like to take it in the other direction.
For argument’s sake let’s consider the BIS reversal and the trend it is a part of as a sort of capitulation, an acknowledgment that the future of finance lies decidedly outside of traditional banking. We are living through a revolutionary cycle, out of which will be fashioned a new image of man.
I have briefly touched on what I consider bubblings of digital millenarianism here in the past, but now, in the interest of optimism, I’d like to take up something in a similar, albeit secular, key.
Economists and philosophers have long considered the ways in which digitalization and AI will disrupt the way we work and live. In the best case scenario, what will happen over time is that repetitive and labor-intensive work will become the domain of robots and AI, while humans will be left the more imaginative tasks.
Freed from the burden of having to earn our bread from the sweat of our brows, we will enter a new stage in our development wherein our aims and activities will be different from what they are now.
The prospect of such a transfiguration has echoes of the doctrine taught by Joachim of Fiore, the Italian theologian from the Middle Ages. Joachim developed the theory of the three ages, wherein all of human history was divided into three epochs: the Age of the Father, the Age of the Son, and the Age of the Holy Spirit.
The Age of the Father corresponded to the days of the Old Testament which were characterized by strict obedience on behalf of mankind to the will of God.
The Age of the Son was ushered in by the coming of Christ and the forming of a new covenant between mankind and God.
The Age of the Holy Spirit, according to Joachim, was an impending age that would see the release of mankind from the bounds of justice and the law. For the first time, man would experience true freedom in the third and final epoch as he would have transcended his limitations of the previous ages.
In this final era, Joachim preached that the worldly houses of concentrated power, in his time the church and the state, would no longer be necessary. A new order of men of the spirit would arise by virtue of their own goodness, but they would not rule over others, but merely act as guides.
If the digital twin is coming, let it be the sword that brings about a comparable changing of the guards. The changes brought about by digitalization could serve to free us both of reductive activities and subjugation to the dictates of institutions of financial power. If we adapt adequately, and compassionately, to the changes that are happening we can rid ourselves of yokes that have long been outdated.
Agustín’s crypto conversion is an announcement that the banks have seen the writing on the wall. The singularity is coming and it has the potential to be glorious. We need to use the time we have to continue building infrastructure in this space that will protect the freedoms of individual and lay the foundation for the age of financial freedom.