Thanks to Facebook’s recent announcement of project Libra, cryptocurrencies are back in the spotlight. The big daddy, Bitcoin, has just celebrated its 10th birthday and is, converse to what many naysayers may have you believe, still performing well (it’s currently hovering around $10k). It seems that much like the internet, smartphones and social media, cryptocurrencies aren’t a passing fad afterall.
Instead, they are fast becoming one of the pillars of UD/UI/UX (1), upon which the ‘fourth industrial revolution’ is being staged.
Although that might sound like an exciting prospect, don’t forget: a revolution is first and foremost the combination of a violent internal war and external disruptions to the fabric of our society. For us to benefit from a new societal structure, the established order must be overthrown with catastrophic consequences.
In this week’s article I’m going to share with you a short excerpt from a recent conversation with the stakeholders of a Private Equity firm, during which I was asked to elaborate on some hypotheticals concerning this new revolution and what it could mean for our future.
1. What are we talking about here?
The ‘fourth industrial revolution’ was a concept first proposed by contemporary German economist Klaus Schab, the founder and president of the World Economic Forum. Schab suggested that while the first two industrial revolutions were technical, the next two are digital. The advent of information technology since the 1960s has been hailed as the third revolution, and now we’re broaching the fourth: where IT is now entering and altering everything around us.
The purpose of the current revolution is to restore man's pride in his condition, and reduce the effects of Freud's narcissistic injuries (2) by solving, through technology, what I call the ‘narcissistic boundaries’:
- I want to break the boundary of mortality
- I want to break physical boundaries (interplanetary travel)
- I want to break my mental boundaries (e.g. bionic implants that can increase cognitive abilities)
So what do blockchain and cryptocurrencies have to do with any of this? Let me explain.
The technical solutions supposed to solve the narcissistic frustrations will be of extraordinary complexity and will be based on new technologies, which at the time of writing are still just prototypes (i.e. quantum computing). At the heart of next generation AI is the need for new analysis and learning mechanisms which will be required to concurrently process, structure and store information from disparate systems spread around the world. For performance and security purposes this will need to be automated and decentralized, two concepts at the core of blockchain.
2. Societal perspective: from the trace regime to the I.F. regime
Whilst the technology may not quite be there, we are already seeing a greater, more holistic shift in human society as a consequence of entering the fourth revolution. The disciplinary institutions of the first industrial revolution, as outlined by Michel Foucault, are gradually being replaced by those of the Deuleuzian societies of control.
We can see this manifest in the ‘regime of trace’ as explained by Alain Damasio in his novel Les Furtifs. Damasio asserts that we are constantly and, often, reluctantly monitored, measured, tracked and located for the benefit of ‘pure players’ corporations (GAFAM). They collate data in order to create increasingly effective and intrusive commercial solicitation systems through their diverse digital extensions (smartphones, social media, applications, etc).
In my opinion the next step is the creation of the indiscernible fake (I.F.), of which we have seen a recent explosion due to the latest advances in artificial intelligence, and of which the phenomenon of ‘fake news’ is only an innocent emanation when we consider what the future will have in store.
For example: did you know that with 8k displays, digital reality has surpassed the definition of the human eye? It has become, with the right lighting and viewing conditions, completely impossible to distinguish between a ‘real-life’ and a computer-generated image. Did you also know that Google has been buying the faces of passers-by for $5 gift cards in order to improve its facial recognition systems?
What does this all mean? Through the next generation of imaging tools, and with data from Google’s facial recognition engines, the ability to create deep fakes which the human eye cannot differentiate is rapidly becoming a reality.
What does any of this have to do with blockchain? Well, several groups of researchers are already working on “countermeasures” to these fakes, leveraging blockchain to immutably label ‘real information’ (news, pictures, video, etc).
One such project comes from the New York Times itself: the News Provenance Project, which employs a blockchain-based solution for the journalism industry, records and shares metadata on the images and video published by news agencies to provide otherwise absent authentication.
3. The financial angle: universal income and the ‘reverse’ business model
From an economic point of view, the fourth industrial revolution is expressed not only by the appearance of a new ‘reverse’ business model, but also by the disruption of money itself, a concept which has evolved alongside digital technologies (more than 89% of money is no longer fiduciary).
Among others, blockchain technology and the cryptocurrencies that have become incumbent, are now part of the toolbox used by competing nations to define what the "global" currency of the 21st century will be. If your vision is not too blurry beyond a horizon of only 20 years, you already know that it will no longer be the dollar, nor any other "classic" currency...
Several moguls from Silicon Valley support universal income, which will partially compensate for the disappearance of some current jobs in favor of automation. And we will soon start to see the first concrete examples of "reverse" business models appearing: the seller no longer asks you to pay. Instead, it is he who pays you.
There’s just one caveat: you have to agree to be tracked, evaluated and measured in every way and by every means possible. Just let Siri, Alexa or Google listen to you day and night and you will receive crypto for free! But what is the objective? How could GAFAM continue to turn a profit under such circumstances?
To answer that question, I first need to clarify one point: traditional currencies aren’t going anywhere. The entire global retail sector is not going to migrate over to a cryptocurrency such as that created by Mark Zuckerberg et al.. What will happen is that these cryptocurrencies will have their utility and their value on certain platforms, but your traditional fiat currencies will still be used to pay for other goods and services. The data these companies collect, for instance, will be sold for dollars to the highest bidders.
Don’t get me wrong, I am not here to try and predict the future. As is always the case, there is no doubt that reality will far exceed our expectations. Instead, what I am urging is that it is essential, especially as a prospective investor, to know how to maintain an honest reflection on the transformations that are coming. Monitoring, foresight and a little imagination are absolutely integral to this.
User device, user interface, user experience
2. The narcissistic injuries:
- I am not the center of the universe.
- I am descended from the monkey.
- My actions are mostly governed by sexual conditioning.