Facing Off with the Future: Markov and Nakamoto — "Life After Google: The Fall of Big Data and the Rise of the Blockchain Economy"

Facing Off with the Future: Markov and Nakamoto — "Life After Google: The Fall of Big Data and the Rise of the Blockchain Economy"

It has to be said that George Gilder is a remarkably bold writer. At a time when Google still seemed to be at the height of its power, to publish a book titled Life After Google: The Fall of Big Data and the Rise of the Blockchain Economy required extraordinary confidence in his own predictions and judgment. When the book first appeared, Bitcoin and the idea of blockchain were just beginning to emerge into the mainstream, while also going through dramatic rises and falls—from a few hundred dollars in 2016, to several thousand in 2017, to nearly $20,000 at the beginning of 2018, and then back down to just over $3,000 by the end of that same year. These bewildering swings were hard enough for outsiders to understand; perhaps even insiders were equally confused. As for concepts like Bitcoin and blockchain, it was—and perhaps still is—difficult to see clearly whether they were merely setbacks on the way to something greater, or the kind of Ponzi scheme on the verge of collapse that critics often described. But in the author’s view, Bitcoin is not simply a sudden new phenomenon. It represents a brighter future for technological development. Readers may not finish this book as devoted supporters of blockchain technology, but they will at least come away with a deeper understanding of these now-familiar concepts.

At its core, this book is about a clash between two ways of thinking: Markov and Nakamoto. As one of the foundations of modern machine learning, the Markov chain works much like quantum mechanics, producing certainty out of uncertainty. The future, in this view, is merely a probabilistic extension of the present; an ordered future can be derived from random data. Intuitively this feels unreasonable, much like Einstein’s criticism of quantum mechanics: “God does not play dice.” And yet the reality is that both quantum mechanics and Markov chains have achieved tremendous success in guiding the real world. It is much like Bohr’s reply to Einstein: “Stop telling God what to do.” To a large extent, we still tend to believe that contemporary artificial intelligence—represented above all by deep learning—remains one of the most promising directions for future development. But in the author’s eyes, this amounts to using dice throws to determine the future. By contrast, the greatest value of the virtual figure Nakamoto and the Bitcoin he created lies in affirming that mind is higher than matter, that human consciousness surpasses mechanism, that true wisdom is superior to mere algorithmic search, and that purposeful learning is better than blind evolution.

It is precisely on this basis that the author argues that Google—and most other internet giants that treat artificial intelligence as a lifeline—are fated to decline. Only the rise and development of blockchain technology, he believes, can bring humanity a real future. Fully understanding his argument may require a fairly strong technical background, but even a passing familiarity with his claims and line of reasoning can be rewarding. The book touches on a wide range of subjects: Moore’s Law and large-scale computing, the looming crisis in storage technology, the irrationality of government regulation, the excessive growth of finance, and the technology, history, and evolution of Bitcoin and blockchain. There is no shortage of fascinating material here. Still, perhaps because the author tries to cover such a vast and complex field, the narrative sometimes seems to lose its main thread. Yet these digressions, in a way, also keep the book from becoming a dry technical treatise and make it more approachable for general readers.

At the end of the book, the author adds an unusual glossary section. In these short, incisive definitions, one can see the structure and essence of his thought. For readers, finishing the book may not immediately turn them into advocates of Bitcoin and blockchain, but it does at least offer another perspective from which to view reality and the future. A few especially distinctive definitions from the book include:

Economic growth: learning as tested through falsifiability or potential bank failure... Government guarantees impede learning, and therefore impede economic growth.

Expansionary fiscal and monetary policy: ... In an information economy, both of these measures attempt to use government power to drive growth, but economic growth is a form of learning (the acquisition of knowledge through repeated thought), and learning cannot be forced.

Overgrowth of finance: the growth of finance beyond the growth of the business activity it is supposed to measure and regulate. For example, international currency trading is about 73 times the total volume of global goods and trade... Real-estate derivatives are now 9 times global GDP.

Cash (real money): a measuring stick, a standard of value, reflecting the scarcity of time and its irreversible passage. ... In this sense, both Bitcoin and gold are cash, but government-monopolized money is not.

Wealth: knowledge that has been tested. The laws of physics dictate that matter is conserved—material resources have not changed since the Stone Age. All lasting economic progress comes from knowledge increased through learning.