An “Anarchistic” Look at Blockchain: Feature Interview With Patrick Schwerdtfeger, author of Anarchy, Inc.
Patrick Schwerdtfeger has an uncommon vision for the future. As a San Francisco-based business futurist specializing in artificial intelligence (AI), blockchain and social media, he envisions a world of unprecedented change, with technology serving as both part of the problem and part of the solution.
Advancements in AI and blockchain, he says, are igniting a new world of decentralization and anarchy, resulting in massive opportunities for strategically well-positioned businesses. Schwerdtfeger notes that technology represents an existential threat to anyone who fails to embrace it, as well as a massive opportunity for those who do.
Recently, I stumbled upon and downloaded his new book Anarchy, Inc: Profiting in a Disruptive World with Artificial Intelligence and Blockchain, and decided to reach out to him. His holds a startling view of the future believing that the disruptive shifts taking place in our world will radically alter everything we’re accustomed to.
It’s here where Schwerdtfeger is predicting a new technological era — one that upends old centralized service models, sparking exponential personal opportunity. A model where only providers and customers exist, free of management, administrators or any other form of middle layers.
Technology, he says, has given everyone tools that grow in intelligence everytime an error is made and that knowledge is passed along. He believes that these data troves are so vast and inexpensive that the flow of innovation taking place today will appear glacial by comparison.
Schwerdtfeger’s book delivers sage predictions about the near future in addition to vital intelligence and insights on how to not only adapt to impending changes but to get prepared and in sync, in order to stay on top of new developments.
During a March 19th conversation with Schwerdtfeger by phone from his office in San Francisco, he discussed the overarching philosophy behind his book, offering deep insights about the impact of artificial intelligence and blockchain on today’s rapidly evolving digital economy. Here’s what ensued from our robust dialogue:
Anarchy is a word that seems to conjure all sorts of thoughts and opinions for the average, everyday person? But you ascribe a different meaning to it for your book. Tell us a little about this.
PS: The media environment today is in a state of Anarchy already. And for some people, Anarchy has a kind of negative connotation. I’ve seen people interpret Anarchy to mean that there is armed militia on these streets or there are hoodie wearing hackers that are controlling the internet. That’s not necessarily what it means. In its simplest form, Anarchy just means a society that rejects power and the prevailing power structure. And that is certainly a situation that we’re increasingly in.
The subtitle of your book, “profiting in a disruptive world with artificial intelligence and blockchain” is an intriguing one. Can you talk about where these two emerging fields intersect?
PS: The intersection between blockchain and AI is a bit tricky. The former is an enabling technology for a decentralized world that doesn’t necessarily intersect with artificial intelligence directly. There is an argument, however, that blockchain in the distant future could enable a world where artificial intelligence can’t be stopped by virtue of the fact that it’s operating on the blockchain and a decentralized space. Today, there are huge latency issues and computational power demands required to run AI. Therefore you can’t run it through a blockchain because the latency issues are just too big. But in the future, if the latency issues get taken care of, this unstoppable scenario could become a reality.
What was the biggest takeaway for you personally in writing this book?
PS: The thing I began to realize while studying various use cases and trends is that everything is beginning to become more decentralized, everything is spreading out. Anyone who is facilitating decentralization is getting more powerful, while others are losing power. In other words, enterprises that are simply protecting their existing power are going to lose. On the other hand, those facilitating the decentralization of power are going to get more of it, which is a fascinating dynamic. So I believe more and more decentralization is coming.
Can you elaborate a bit more on your prediction regarding decentralization?
PS: Certainly blockchain by its very definition is a decentralized system. So imagine a future where administrative functions no longer exist because they’re automated through blockchain smart contracts. The Hackett Group, for example, recently released a study which showed that the number of finance employees per billion dollars in revenue is already down 40% over the last ten years. When people retire or move on to different jobs, large companies are often not replacing them because more and more of their work is being handled by enterprise software applications. I think that artificial intelligence will also increasingly come into play here as well.
So what impact do you believe that all of this will have on today burgeoning freelance economy?
PS: I predict that we’re going to see an explosion of online gig economy, freelance, do it yourself style platforms where one can earn a living basically without asking anyone’s permission. The one problem I see with this though is that self-employment requires one to be disciplined and motivated, something that most human beings have little of. Nevertheless, growing numbers of people will be forced into these gig economy jobs in order to make money on the side because we’re going to see a very significant period of job displacement in the U.S. where truck drivers and people working in sewing shops or customer service call centers are going to be displaced. Unable to find the kinds of traditional jobs we generally look for today, it’s going to be an enormous shift.
And governments?
PS: Governments will also be in a very tricky situation. Keep in mind that they will also be losing power as time goes on. Because blockchain technology is borderless, it’s going to be harder and harder for governments to make regulations that apply to their citizens. They will be left behind as other governments that give their citizens more freedom and more opportunity.
You reference the word “tricky” often when it comes to the blockchain. Is it that complex?
PS: Let’s keep in mind that Blockchain is inherently an incredibly simple thing. People make it out to be more complex than it really is. It’s just a new way of recording transactions — — a new way of recording things that happen. So there soon will be a time when companies will have hundreds of private blockchains working simultaneously for different areas of their operations. It will eventually be the standard operating procedure.
Are there any case example you can point to that underscore the practical value of blockchain
PS: Accenture and Microsoft have been working collaboratively to create what is known as ID2020, a blockchain-based system that provides digital identity to undocumented people who are mostly refugees today. Because it’s a biometric database that’s on the blockchain, anyone on a smartphone can verify with their own biometrics who they are and where they came from. It’s a very interesting project.
But then there’s the case of India which in the last few years has developed a program known as Aadhaar, a 23 point biometric, demographic database. 99% of Indian adults already have their aadhaar number and use it to get all of their social benefits. They’ve done an excellent job with this and it’s very sophisticated. In fact, it’s much more robust than some of our equivalents databases here in the U.S. But it’s not on a blockchain because the government doesn’t want to lose control.
In other words, the Indian government is concerned that blockchain might usurp their control and authority?
PS: That’s correct. Every time something is decentralized there is a loss of control. Prime Minister Modi and the Indian government is seeking to maintain as much control as they can. So they have chosen to not put their system on the blockchain.
How is this problematic for the country?
PS: They are facing an enormous administrative expense with Aadhaar, with thousands of employees needed to run it. I don’t know the real number but I’m sure it’s a lot. And it is restricted just to India. On the other hand, you’ve got ID2020, which, once built and deployed, will have zero administrative expense and no borders. Of these two competing models, I believe the one that’s blockchain based will win out over time.
Sounds like this is not the best long-term proposition for India
PS: That’s correct. Just imagine a time when ID2020 or a similar blockchain project is fully up and running. The government of India will all of the sudden lose a huge amount of the control they have today. So again, all of this about giving power back to the individual, taking power away from prevailing power structures that are holding onto it without providing something in exchange.
How long before this takes place, in your opinion?
PS: Blockchain is an enabling technology. So it’s going to creep in. There are some who are expecting that one day, all of the sudden, blockchain is going to change the entire economy overnight. That won’t happen. But when it does creep in, it’s going to catch a lot of people off guard. We are going to see it start to creep into the mainstream from the edges, the fringe. That’s where the innovation comes from. And before you know it, we are going to see blockchain based architecture all around us. I predict that it will be everywhere within the next 7–10 years.
