Digital Marketplaces Unleashed
Page 82
Such a system is able to predict my reaction to certain objects or experiences because it can compare my data to that of likeminded people. People who already used this specific item or experienced what I’m about to. If they didn’t then the algorithm is looking for the next best thing.
Why? The algorithm isn’t looking for a binary yes/no answer but rather for a probability. The final decision is going to be still be up to you – the user.
Which brings us to the next step.
53.2.4 The Interconnection of Goods & Services in the Digital Age
So the system is aware of my desires and likings. It can predict my reactions to certain objects. Because such a system would have more than one user it will be aware of the current resources every person has – every user of the system (this can be done through regular 3D scans of your apartment [13] or more advanced IOT implementations [14] and interconnected items – just to name a few examples). So whenever I know what I’m looking for it will be able to find someone who has this specific item – or has something that comes close to what I crave.
So we are talking about a system that knows what I have and what I need and is able to match those needs with something another person has and needs. A direct exchange of goods and services – an intelligent and efficient distribution of those.
Because this is very abstract, let’s rather get back to the example of me looking for a new smart phone.
Let’s assume that the first steps delivered a desired result. Being: Me knowing what to look for. Now let’s say there is a person owning two or three smartphones which he or she does not really use. This person however is in desperate need of a new microwave. I happen to have a spare microwave but need the smartphone. An expert system would be able to recognize such opportunities and interconnect us – so I give my microwave to the other person and receive my smartphone in exchange.
If this example sounds a little oversimplified and ridiculous this might be because it is: Depending on the user base there may be such opportunities from time to time. More realistically however would be a situation where you are going to have a three‐way‐exchange. Let’s see what I mean by looking at one more example: I still have the microwave but the person with the smartphone actually needs a sofa in exchange. Luckily there is a third person who has a sofa a needs a microwave. So I give him my microwave, he gives me his sofa and I exchange it with the second person for the smartphone.
Please bear in mind that these examples are overly simplified and do not take the value of items into account. I’m going to cover this topic next, please just make a personal note for now.
Three‐way‐exchange is something that revolutionized the organ donations and saved many lives by doing so. Just a few years ago we were lacking the computational power and algorithms to calculate this kind of exchanges. Today we can. Imagine what we could achieve with an expert system that is not only able to calculate three‐way but also four‐ or five‐way‐exchanges.
Let’s go even further: Image that such a system would not only be able to exchange goods but also services. Example? Let’s say I’m good at playing the piano and need a new wall in my house: I could find a mason that is able to do the deed in exchange for piano lessons for his daughter – or I just give him my smartphone instead. Whatever seals the deal – I don’t have to worry about such things, because the systems takes care of those details for me.
Please reflect a little about the possibilities of such a system before you continue to the next part – which is what this whole topic is actually all about:
53.2.5 The Value Equation & the Shift in Perspective
Our value system is an essential core of our personality. We are living in a world where we constantly have to adapt our values in order to maintain our personality. So our values are drastically changing, the faster the change in our environment occurs. What do I mean by that? As we digitalize our life even further, there will be a drastic shift in our value perception. You can already see this kind of changes today: People who pay real money for virtual items in video games. They don’t do this kind of thing because they are stupid. They do it because these items hold value for them. Some people find value in racing go carts around the race track and pay money for the activity – others buys expensive caviar because they like the taste. The more digital our live is, the more value digital items and activities will hold for us. Share economy is another great example for a value shift: Younger generations no longer care about owning things – they care about using them. Who can blame them in a world where all the goods are already spread among those who came before us and resources are and will be very limited.
There is a huge difference in the value of things that depends on a very subjective evaluation of these things. Meaning: Every person has its own value for every item or service. A system for direct exchange of goods should take this variable into consideration: The personal value for a certain thing. It should be able to balance the individual values and find deals that are suitable for all involved parties.
This is where it gets really interesting. Such a system does not rely on money in order to work. Even worse: Money is something that hinders such a system because it creates an additional and very abstract value. It complicates things in a world with direct exchange of goods.
You might shake your head in disbelieve because you think that there is no way in the world we might forfeit our monetary system someday. But we might. Money is a concept the mankind invented to balance the exchange of goods – when our world got too complicated for the direct exchange [15]: How many chicken is this cow worth? Three, maybe four or five? What about adding a quarter pig. The correct answer to that question would be: Whatever it is worth for me.
Money is a simplification – our current monetary system on the other hand is anything but simple. Benefiting only those who control it. In an interconnected, global and educated world – it will hit its limits. Resulting in either a revolution or a new and better system – just as monarchy was replaced by democracy. This is a part of the progress.
So one of the results we get from using such a system will be a formula to calculate individual value and an answer to an age old question: What is value actually about and what should hold value for us.
53.2.6 Privacy & Other Technicalities
While being a generally utopic and positive system, there are also some dangers involved in building it. Privacy and the protection of personal information is the major topic: Uploading every piece of your life to the cloud seems like a bad idea, coming from our current status quo. Unhappy ex‐employees, hackers, corrupt governments and companies and many, many more are looking for ways to get their hands on our personal data.
There are certain approaches to solving this issue without giving up the comfort of this system: A very interesting solution would be an advanced application of the Blockchain technology – combined with a system that gives me (the user) full control over my data and whoever has access to it. Such a privacy control mechanism would allow the system to access my personal data, without actually knowing who I am [16]. And I, on the other hand, would be able to control who is able to see what parts of my personal data.
Apart from that – in order to build it: It’s essential to isolate the organization that runs the system, because it would be very prone to every type of manipulation. It needs to stand on neutral ground and behave as a neutral entity. The organization itself should not be driven by financial goals because this would nip the whole concept in the bud and produce a clash of interests. Resulting in the premature death of the system. There are also many sociological consequences worth considering from using such a system on a global scale.
53.2.7 The System – Concluded
Let’s conclude what we have so far: We are talking about a system
that is able to recognize who I am as a person. Based on data I provide to it through various sources. It is able to select items and services based on a holistic approach considering more criteria than I could possibly imagine. It knows what I want and can predict how I’m going to react to it, based on data it cross‐referenced from other “likeminded” people and their experience. It knows what I have and what other people, connected to the system, have. It can then create direct, three‐ or even four‐ or five‐way‐connections between users of the system, that allows each to get the item or experience that the person is looking for. Which in turn would feed more data into the system and help the algorithm to improve even further. Everything resulting in a positive exponential development of the system itself.
We can solve the biggest privacy issues by using a modified Blockchain algorithm that will allow the users to maintain control of their personal data and use the benefits of the personalization while staying anonymous.
Final thought: Such a direct exchange system would make us question our own values and essentially remove the need for money: Or rather replace it with a different, more advanced, concept – more suitable for our modern society. A way to focus on the real value of things and balance our consumption.
53.3 Excursus: About Change and the Law of Accelerating Returns
You can skip this passage, if you are only interested in the system itself. This is just background information that might help you to understand the accelerating rate of progress.
I’d like to conclude with an underlying principle that drives the kind of change, discussed in this article. This topic might seem far‐fetched, when it comes to digital markets of tomorrow, but there is a certain reason I bring it up. The reason being: There are certain principles underlying everything in this universe. One of these is the exponential growth or decay of … well, basically everything there is. Because this is such an abstract topic, I’d like to explain it with a thought experiment.
Imagine that you’d have a time machine and use it to go 200 years back in time – to the beginning of the 19th century. Now imagine grabbing a person from that time, pulling him into your time machine and taking him back to our current time. What do you think would happen when he sees cars, plains, computers, the internet, smartphones, skyscrapers, hover trains and all of those things we crated in the last 200 years? I guess he will be so overwhelmed by these changes, that he will instantly drop dead.
Good thing we have great medical care nowadays and can actually revive the dead person from the 19th. century. Now imagine you excuse yourself and lend him your time machine to play the same prank to some stranger from back in his past. What he then does is: Going back to the 16. century, grabbing a random person and taking this person to the 18th century. The time delta is the same – 200 years. Now imagine what would happen next. Do you think the person from the 16th century will drop dead after seeing the 18th century progress? Faster carriages, new political structures, a little taller buildings and new fashion.
He actually won’t drop dead, because the changes are not big enough to trigger such a kind of reaction. In order to achieve the same kind of relative effect the person from the 18th century would need to go back all the way to 10,000 BC. The visitor from the long gone past, would then be baffled by the buildings, ships, carriages or simply all those people living in one place and … you guessed it drop dead.
You might already see a pattern here, but try imagining this thought experiment one step further. Imagine you’d want the person from 10,000 BC to play the same kind of prank on someone from his past. Going back 10,000 years to 20,000 BC would not do the trick. He would need to go back even further to, let’s say, hunter‐gatherer times – about 100,000 years BC. The huntsman would then again be baffled by the agriculture, settlements, language and many other things we consider as basic.
This is what the law of accelerating returns is all about [17]. The term has initially been coined by Ray Kurzweil, a futurist and now head of the tech department at Google. If you break it down even further, you can calculate the rate of the drop dead effect and get to the point where the changes in the next 20 years are going to be greater than everything we experienced in the past 200. So whenever you see someone with a time machine, he might not be coming from the year 4000 AD but maybe rather 2090.
The further we get within our rate of progress, the faster the progress will become, enabling us to progress even faster.
This is a very important thing because it concerns everything that surrounds us. From our political systems, to our relationships and most certainly our technology and the possibilities we have. All of these things are simply a product of our current progress. Whenever it comes to exponential growth, most people have trouble coping with this concept. This is a result of certain biological limitations of the human brain and our ability, or rather lack thereof, of abstract reasoning – or simply put: We tend to think linear. We interpolate the current position or tend to create predictions for the future based on the past. We can’t be blamed for that – that’s just the way we think and the data we have to evaluate our predictions.
Before I close this topic, try imagining yourself as being a horse carriage tycoon at the end of the 19th century. The time where the first automobiles started to appear. There is almost no way you could predict, that the automobile will, some day, play a major role in our society. The usual way of going about this kind of problem would be to look back at the past: The horse & carriage used to be a part of the society for thousands of years and there is no way around it. “So don’t care about this whole automobile‐hype ”. This kind of reaction is based on data from the past.
If you would be a clever tycoon, you’d devote a part of your resources to this automobile thing, because … who knows, there might be something about it – it might sale to some rich people looking for fun – last year about a thousand of them sold, so why not. This kind of reaction and prediction is based on current facts and figures and is a simple interpolation of those. You’d be more correct in your prediction than the first tycoon but still far from the actual truth because you didn’t take the exponential growth into account.
It’s easy for us today to look back at such examples with a grin and shake our heads in disbelieve. But please remember that we make the same kind of mistake every day when we try to predict the future. Apart from that, there is a lot more prediction happening today than used to take place when the automobile was first introduced because of … you guessed it: The exponential growth. [MR]
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Further Reading
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