A CEO and former hedge fund manager shares his thoughts about the Economic Singularity.
The word is in from Raoul Pal: We have six years to accumulate as much money as possible before AI/AGI drastically transforms everything we understand about business, markets, and economics.
He refers to this phenomenon as the Economic Singularity.
Before continuing, what is meant by the Singularity?
Many definitions exist, but this ties into the technological singularity in this case. It represents the point at which technological expansion and advancements become uncontrollable and permanent.
While it remains hypothetical, this phenomenon is getting closer to becoming a reality.
Following the launch of Open AI’s ChatGPT in November 2022, various AI cryptos started taking off amid a bear market.
Projects and tokens such as Singularity.NET (AGIX), Fetch.AI (FET), Ocean Protocol (OCEAN), The Graph (GRT), and Origin Trail (TRAC) more than tripled in price between December 2022 and February 2023 – AGIX and FET managed 10x gains in those three months – despite all retracing after a while.
While tripling in price doesn’t sound like much…in crypto, for context, this was shortly after the peak of the FTX fiasco, where the entire market was still in the doldrums.
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Some will say that Pal’s comments are hyperbolic and come across as alarmist.
Perhaps he’s wrong (as he was with XRP), and with existing frameworks, we’ll still have ample opportunities well beyond 2030.
I believe he’s adopting a cautious approach. This is akin to scientists opting for the precautionary principle when forecasting and modelling.
No one knows exactly when the Singularity will occur, but any prudent person would prepare sooner rather than later for widespread tech disruptions.
It will be a matter of when, not if.
“I think we’ve got six years to invest as much as we can, whether it’s your brain power or your capital, and both if you can, to make as much difference (as possible) to unfuck your future.”
Raoul Pal The Journey Man podcast, 13 August 2024 > Prepare for 2030: We Have 6 Years to Unf*ck Our Future.
Whether this milestone is utopian or dystopian remains to be seen. I am slightly pessimistic, partly because I have watched too much Black Mirror…
What will become dystopian is ill-equipped people to deal with the future AI disruption, some of which has already started.
It’s generally wiser to plan for worst-case scenarios than to wing it and hope for the best, as many have done with their finances and health situation over the decades, but I’m not here to judge.
With an ageing population and dwindling birth rates – notably across the developed world – it will become even harder for the have-nots intending to rely on a pension.
Let’s not forget about the overwhelming amount of money printing (debasement) globally. Much of this has fuelled inflation rates and increased costs for goods and services, with cost blowouts in various sectors.
Moreover, looking at GDP figures in recent years for many countries leaves much to be desired, especially in the developed world.
It’s a timely reminder that you must prepare for the future sooner rather than later, particularly for many rainy days ahead.
This begins with living within your means and allocating leftover money each month for investing ASAP.
This six-year journey is the most important time of anybody’s lives…if you’re open-minded, you’re adapting to it…you’re at least investing in this change as opposed to fearing the change.”
Many won’t be for various reasons within and beyond their control. As such, some will settle for meagre government pensions, a form of universal basic income (UBI) or both.
Some might see Worldcoin’s involvement as positive, with those signing up for and participating in its iris-scanning program being rewarded with WLD tokens. The entity is interested in using its World Network system and World Foundation to help deliver an AI-funded UBI.
However, I remain sceptical about this, which I covered in the following article in August 2023.
https://medium.com/crypto-insights-au/crypto-watch-july-august-2023-worldcoin-wld-262ac96f85b2
Pal also notes the role of cryptocurrencies for bots. This asset class’s P2P, decentralised payment systems circumvent the need for intermediaries that would otherwise vet and manage individual and business bank accounts.
Smart contracts and cryptocurrencies, which will only improve in the years ahead, will allow these automated systems to function like well-oiled (digital) machines.
As such, keep a close eye on the aforementioned crypto assets—some of which have now merged into the Artificial Superintelligence Alliance (ASI)—and the rising popularity of AI agents (which falls under the AI 2.0 umbrella term).
Additional thoughts
It’s important to recognise that AI and robots already play a pivotal role in doing some jobs with chronic workplace shortages – notably in construction, healthcare, and hospitality* – and for low-skilled and dangerous professions:
– robotic mining equipment, despite the upfront expenses, significantly reduces labour costs and improves safety.
– automated harvesters, planters and weeders in agriculture and land conservation
– mechanical and camera arms to help surgeons and their assistants during major operations.
* At least where I live in Australia, this sector constantly struggles to get reliable and competent local workers.
With ageing demographics worldwide, more robots are needed to perform menial, repetitive, and labour-intensive tasks.
As these become more advanced, companies like Amazon will embrace the technology further. As of April, the e-commerce giant had over 750,000 robots working alongside humans at its facilities.
Ongoing improvements to automated hardware and software will ignite concerns about job losses and changing employment trends, especially across industries that still haven’t experienced AI disruption.
We’re starting to see white-collar jobs getting replaced by AI. This has already begun in customer service, replacing people in customer service and data entry.
Some personnel in skilled industries, such as creative design, are beginning to worry about rapid advancements in AI.
However, an Adobe product leader doesn’t appear concerned about generative AI tools, claiming it will boost productivity and help make better content.
Other high-end industries, such as law and accounting, will benefit from using AI as a complementary suite of tools.
This greater reliance on automation should reduce costs and speed up processes previously done exclusively by humans. Time will tell how quickly (and to what extent) firms will pass any savings onto their clients.
I’ve always lived in highly developed countries, which also begs the question: How will AI affect the developing world?
In due course, it will have its impact there. In the meantime, there will be a greater impetus to implement automation in countries with very high minimum wages and median salaries.
However, I will elaborate on this in a future article for brevity and relevance, provided there are enough connections to blockchain technology and crypto assets.
In summary, we must prepare for rapidly advancing AI systems sooner rather than later. I appreciate Pal’s bringing this to the public’s attention. I imagine many elites and tech gurus started preparing for The Singularity years ago, well before us plebs had an inkling of what this concept even meant.
Disclaimers
- N.B. None of this is financial advice; I am not a financial advisor. This information is for educational purposes only. You are ultimately responsible for crypto investments, let alone in any asset class.
- The opinions expressed within this piece are my own and might not reflect those behind any news outlet, person, organisation, or otherwise listed here.
- Please do sufficient research before investing in any crypto assets, staking, NFTs or other products affiliated with this space.
- I hold small amounts of the digital assets listed throughout this piece. These collectively account for <2% of my total crypto portfolio.
Image (AI-generated) by user18989612 at Freepik. Unspecified base model.