Too much trust in innovation?
Published: 25 Dec. 2017, 20:35
On a Chinese Go site, AI has replaced humans not only as a player, but also as a commentator. Chinese technology company Tencent’s AlphaGo rival “Fine Art” (Jueyi) has already beaten a slew of China’s top champions.
Even a contest between the top masters in the ancient game of black and white stones appears less exciting than one between deep-learning machines. “There may not be any room left for human minds one day,” said Yoo. In less mentally excruciating games like chess, an inexperienced player can easily beat a world champion through a game on a mobile app.
Hard currency may soon follow the path of these board game players after the staggering ascent of virtual currency. A single Bitcoin was valued at a paltry 39 cents when it first appeared on cyberspace in January 2009 and now fetches over $15,000. Does that mean the world’s most circulated greenback now values a 40,000th of what it had been eight years ago?
We do not have to hear it from Vitalik Buterin, the inventor of Ethereum, a cyptocurrency as popular as Bitcoin, that virtual money is in a bubble. But what cannot be denied is that digital currency has seriously shaken traditional currency just as much as inflation, financial crises, quantitative easing and fiscal deficits have in the past.
If artificial mind programs like AlphaGo and Fine Art pose a challenge to human talents, artificial money is an attack on government institutions. Tim Wu, a professor at Columbia Law School, attributes the rise of cryptocurrency to the fall of confidence in institutions and governments.
“Bitcoin’s rise may reflect, for better or worse, a monumental transfer of social trust away from human institutions backed by government and to systems reliant on well-tested computer code. In our fear of human error, we are putting an increasing deep faith in technology,” Wu said.
Unlike the centralized state establishment, blockchain as well as other platform-based technology all operate on decentralized models of value creation and exchange. Bitcoin is wildly volatile, but nevertheless backed by impeccable blockchain technology worshipped as the “Trust Machine,” not as intrusive and manipulative as the central ledger, but a shared and trusted opened ledger that protects your money from fraud and hacking.
The zeal and hype over cryptocurrency technology is shared globally. But in Korea, it has gotten out of hand. Despite authorities warning of the bubble bursting and likening the trade to gambling, over 2 million people exchange the currency every day in a trade worth 6 trillion won ($5.6 billion).
The buzz goes on under the self-delusion that there would always be a bigger fool than I out there. The hopeless generation with no signs of improvement in job scarcity bet whatever they have left with the hopes of hitting a jackpot. It is how 20 percent of global trade in cyptocurrency takes place in an economy that contributes a mere 2 percent to the global economy. The world’s largest cyptocurrency exchange is based in Seoul, and this is where the Bitcoin value topped the $10,000 milestone for the first time.
Business tycoons are mixed about digital money. Microsoft’s legendary co-founder Bill Gates claims that Bitcoin is better than traditional currencies like the U.S. dollar. Warren Buffett, the billionaire investor dubbed as the Oracle of Omaha known to stay away from internet stocks, warns Bitcoin is a “real bubble.”
Bubbles can fuel growth, but their excess can poison and kill the industrial root. The infamous bursting of the dotcom bubble had ruined the lives of many retail investors. In the aftermath, venture start-ups were distrusted and lived with the stigma as frauds for more than a decade.
Google chose Korea to test out its deep-learning AI. Thousands of Koreans willingly volunteered to experiment with cryptocurrency. The question is how fast or slow the bubbles fizzle out.
Will blockchain technology go into a 10-year curse with the fall of Bitcoin? Or will it become unstoppable and become the financial technology basis for the fourth industrial age? Since the country has become the host economy of the historical test, the government inevitably stands in the same test for its success or ruin.
JoongAng Ilbo, Dec. 23, Page 30
*The author is chief executive of JoongAng Design Works.
Hong Seung-il
with the Korea JoongAng Daily
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