Technology Is Bad, Actually

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Ever since my last foray into the world of digital money I've been trying to find novel things to spend my Ethereum on in order to get a better understanding of this space.

I did not find anything.

But what I have found instead is worth more than any amount of Ethereum or Bitcoin you could imagine; An endless source of entertainment from the crypto-currency community. It's the perfect mix of obnoxious tech-bros and wealth obsessed "investors", sprinkled in with an anarcho-capitalist's lack of empathy on top. Although most of the time these are all the same people.

But as is now common-place on this blog, let's start by talking about something else instead, another tech-bro fascination known as "self-driving cars".

I wouldn't call myself one because I don't want to be grouped in with the others who are, but I'd fit the bill as a "car enthusiast" and don't really see the point of self-driving cars. I like driving cars, so why would I want it to drive itself? And especially, why would I want to be banned from driving a car as so many self-driving car fanatics say I should be?

The main reasons I hear are them being more safe and having traffic congestion eased significantly. Which would be pretty good reasons if any of them were true and that our current self-driving car technology didn't suck balls.

Some say it's just around the corner, maybe a few years, they're wrong.

A self-driving car would need to be closer to Artificial General Intelligence (AGI) than current AI technology - that is, close to being able to mimic the processes of human intelligence, than our current methods of having GPT-3 regurgitating training data to trick people into thinking it understands anything.

The biggest reason for this is the fact that there are other people on the road. Driving is not so simple as just following a set of instructions, there are hundreds of external factors that come into play, creating scenarios for the driver that they may never have seen before and expect them to deal with it right then.

If you drive race cars (or pretend ones like me) you already know how you instinctively understand intent from other drivers through "car body language", where subtle movements and characteristics in how someone drives their car can signify what they're about to do. Normal commuters do this too everyday just as instinctively because blinkers aren't enough to understand the complete nonsense that goes through the head of the average driver or the complete nonsense of things that don't have blinkers - like pedestrians.

Granted, I have enough faith in human ingenuity to believe that this will probably get solved at some point, just not for a very long time - like decades long. I simply don't see how current AI architecture can even remotely get close to this level of heuristics.(1)

(1) Yeah, I know Waymo say that their cars have driven over 20 million miles and are safer then humans. But of those miles, where where they? What were the driving conditions? How much human oversight did they need to have? I'll let you know that the answers are: mostly calm suburbs, clear and sunny days, and an entire team of people to oversee the cars of their (limited use) taxi service and go out to fix any issues.

So what about reducing traffic? The idea goes that if all cars were self-driving and completely safe, they'd be able to go any speed they want. And if we get all the cars able to communicate with each other, they'll be able plan out manoeuvring around each other even better than a human relying on "car body language" which would allow us to potentially remove stop lights/signs as we know they won't hit each other.

The problem I have with this thinking is that it's car-centric. How is the issue of traffic caused by too many cars solved by having more cars? Speeding the cars up won't do anything if there are too many cars, because sometimes cars have to slow down to do things like taking turns, or allowing other cars to merge onto the road. Traffic literally only exists because of other cars, adding more will always make it worse. Ironically, there's also the safely implications of having city criss-crosses full of high speed, high traffic, autonomous vehicles for anyone not in a car.

In my opinion self-driving cars won't help very much. To me, they seem like a desperate attempt to maintain car dependence suburbia with a flashy gadget that can be sold to you instead of actually trying to solve the issues facing a city.

So no, I don't think humans should be banned from the streets; I think cars should be banned from the streets.

The problems that self-driving cars aim to fix are mostly "American" issues that stem from decades of car-dependent cities. Yes, if you design a city such that everyone needs to drive everywhere all the time, you have problems of crippling traffic, high transportation costs, and dangerous roads. None of these issues really exist in walkable cities with high quality public transport where less people use cars, however.

Cars are expensive, require too much space, are terrible for the environment (yes, even electric cars, but that's a story for another time), and there should be less of them.

On a personal note, wanting less cars might sound strange to hear from a "car enthusiast" but this is why I don't like being grouped in with the others who just memorise the names of car models with their spec sheet and use them as status symbols. I prefer cars as impressive works of engineering where the only place they belong in is at a race track to fulfil their only purpose, which is to go as fast as possible, as safely as possible - with the latter being just as important. It's easy to make a fast car, but not so easy to make a fast car safe.(2)

(2) Part of the reason why I never liked Group B all that much, especially when current WRC cars are so much quicker and don't kill their drivers.

Regardless, the lesson here is that you can't solve a problem by just shoving technology into it. There are hundreds of tiny little political, socio-economic, and cultural facets to any complex problem surrounding our society that a few lines of code running on some silicon can't account for.

Anyway now it's time to talk about crypto-currencies. First, I want to get a little pedantic.

National currencies used to be backed by gold and now they're backed by the nation's resolve to support the currency. Crypto-currencies are backed entirely by convention. You could argue that nations are conventions, but they are bound together by a constellation of motives beyond their currency.

Crypto-currencies are isolated conventions only backed by people's agreement that it is money. That is their appeal and their vulnerability, they are not tied to anything. This is why I object to the way it is common in crypto-currency circles to refer to national currencies as "fiat". Before crypto-currency, there was essentially a dichotomy:

  1. Money that either is a commodity (e.g. gold, diamonds) or is backed by a commodity. This kind of money has intrinsic value aside from its use as money as in a post-apocalyptic collapsed civilisation for instance you can still use your gold bars to smash in the skulls of people trying to steal your stash of food.

  2. Money that is backed by agreement that it is money, and that has almost no intrinsic value. Generally this only worked on a large scale if someone big, like the government, agrees that it is money and encouraged others to do so such as by making this the only form of money acceptable for paying debts owed to the government (such as taxes) or for the government to use to pay debts.

Until this century it wasn't really practical to have a large scale type #2 money for general use without it being backed by a government and so the term "fiat money" came to mean the whole of type #2. Bitcoin and similar crypto-currencies are type #2 but not government backed. By using the term "fiat" to refer to other type #2 money, it gives the impression that Bitcoin is not type #2 which leads people into thinking Bitcoin is type #1 instead.

I've seen people invest in Bitcoin thinking that they are investing in a gold-like money because of this. The dichotomy needs to become a trichotomy: commodity money, government-backed fiat money, and non-government-backed fiat money.

Granted, the crypto-currency community seems to have moved away from attempting to use crypto as a currency and more a "store of value" like gold, sort of making it more a commodity, which makes more sense considering it's deflationary characteristics, but I just wanted to get that off my chest.

The core technology behind all cryptos, the "blockchain" is straight garbage. This isn't like self-driving cars where I could see it getting better eventually, no, it's a trash idea. Ah yes, how about a linked list where every node contains a hash of all the data of the nodes behind it, and every time you want to add a new node, you need 100,000 computers to say "OK" to it. Simply put, there are no reasons for why you would want a decentralised blockchain over a centralised database apart from ideological ones.

Ideological reasons like being free from government regulation. But… eh, why do you think government regulation exists? Not everyone will have the ability or will to "be their own bank", how do you prevent them from being scammed, or involved with fraud?

Decentralisation is bad, actually.

Sure, it's a good thing to strive for, but they are inevitably more complicated, difficult to use, and much harder for the average person to understand. I mean, look at what I had to do to get this blog permanently on IPFS. Decentralised technology like IPFS doesn't work well until the network effects build up, if they ever do. I'll just point to the millions of torrent files today that will remain unseeded forever. Durability with P2P only works as a complement to centralisation.

I've heard people say smart contracts will allow us to completely revolutionise the Internet at large with its' "code is law" philosophy where you'll no longer need to trust any third party and can just run anything on some code on a blockchain.

This still requires you to trust the person who wrote the code though, so I have no idea why people keep pushing this idea of having no middleman. I've met people who write code, I've seen the code they write, very few of them I would trust with any amount of my money.

At best you can say smart contracts are a more "neutral" middleman, which makes sense if you have no idea how code is written. Forgetting the fact that people can just write the code wrong, any complex codebase is filled with the biases and assumptions of the people who have written it.

The most obvious example is AI, which often times shows more transparent biases as they are only trained on specific things. But something a little more interesting and less known are the "historically rooted gender divisions of labour that are replicated and even amplified in the digital economy, and particularly work in platform-mediated/online and virtual spaces".

I encourage you to read Bama Athreya's paper, "Bias In, Bias Out: Gender and Work in the Platform Economy."

Oh yeah, there's also NFTs. I'd rather not even talk about them.

Crypto-currencies are a solution looking for a problem. But they can make you a lot of money, the tech-bros are right about that one thing.

To be honest, I think having a "useless" investment asset could be useful and better when compared to other investment assets.

When people who already have bought a house want to buy another house as an investment, what happens? The demand for houses becomes higher, raising prices. And since these people already have a house, it's a decent indicator that they have the money for it, so they'll be able to pay more than someone just entering the market. And now, home ownership is out of reach for most young people.

When a business sells it's ownership as equity to other people, what happens? The business is incentivised to grow more to increase the price of its' stocks. It's incentivised to do this forever because people want their investments to grow forever. And since a business can't keep growing forever, eventually it has to do something to increase profits, like decreasing working pay/conditions, or using customer brand loyalty to get away with selling worse products, or just buying out competitors and dismantling them. And now, a dystopian nightmare where the established business can use it's existing wealth to strangle innovation.

So, when someone buys Bitcoin, what happens? The price of Bitcoin goes up or down, and the rest of the world is not affected. Well… apart from all the energy consumed by datacenters used to mine the Bitcoin.

One other thing I like about crypto is how you can simulate economy experiments using the funny Internet money. Ponzi scheme? There are plenty of those going on. Want to investigate Harberger's triangle/deadweight tax loss? Create a small game. Prediction markets? See Auger.

As long as you approach it from the perspective of "this money is worthless" it's all just a fun learning experience about economic theory. Although, mostly of theories from Austrian school economics, but still worthwhile I think even if it's not the type of theories you personally subscribe to.

I've basically just relegated crypto-currencies to complicated forms of gambling, but seriously, this really is me genuinely trying to find a use for them.

Crypto-currencies aren't this society transforming technology that mark a new era of humanity. They're some bits on a computer that people think is worth something, and there's only so much you can do with that. If you really want to solve our economic problems, reduce wealth inequality, or create a better Internet, I suggest looking outside your own perspectives and not trying to solve money problems by replacing it with money, but now with computers.

And like with cars on streets, I'd look at a solution that tries to get rid of money altogether.

Now that doesn't necessarily mean the destruction of Capitalism, if that's what you think I'm going for,(3) systems like mutal credit are actually used by many businesses currently when dealing with other companies, they'd just need some work to become standardised for everyone else to use without being too fragmented.

(3) You are right though.

Again, technology isn't going to be able to solve anything by itself, and sometimes it just distracts from the things that could actually solve them. Our over reliance on using technology to solve societal woes has given too much power to the people who create it, and mostly - to those who sell it. Because it's the marketers who shape people's perceptions on what is actually possible and how useful it can be.

It's easy to get someone it buy into a new shiny piece of tech by throwing buzzwords and technical jargon at them. It's less easy to actually understand the underlying problems of a complex civilisation and attempt to solve it holistically, where technology may not be needed or is just used to make it more efficient.