2020 predictions, from 2017

People sometimes ask me what I think about the future.
Luckily for them, I’m the biggest expert on the future on planet Earth. Like everybody else.

Will New York ever look like this? (image source)

So, let me give you some bold, unconventional predictions. Just for fun. Let’s revisit in three years and see if I was right at all.

Predictions are hard

It’s hard to predict what will happen in six months.
It’s way way harder to predict what will happen in three years.
However, if you predict something three years from now, people will be quite forgiving, as long as you capture a general trend, and are not too far off, they will be happy with it… But they will still want to know how did you use Data and some Rationality to make that prediction.
Let me show you.

Prediction #1: The Facebook Party

Mark Zuckerberg is clearly ambitious. From the Facebook manifesto, to his recent activities, many have predicted that he might run for US President in 2020. Just go and read the manifesto again, and substitute the word “Facebook” with “our political party”. It works!

(image source)

However, even if I don’t personally know Mark Zuckerberg, I suspect that he is smart enough to note that:

1. He is not the best presidential candidate — white, young, rich, controversial. Winning, even with the help of Facebook, would not be easy.
2. Being President means 4 years in “prison” — endless commitments, meetings, ceremonies, etc. A nerd like Mark doesn’t like that. It also wouldn’t allow him to run Facebook at the same time.
3. Being President doesn’t mean that you have power. It simply means that you are the nicest puppet, in the hands of often obscure corporative interests. Your hands are tied, most of the time.

However, there is an alternative: he just needs to look at what’s happening in my home country, Italy.
A famous comedian, Beppe Grillo, in 2009 created a political movement from scratch, the “Movimento Cinque Stelle” (M5S), using his great charisma and a lot of social media. Note, however, that he is NOT a politician: he controls the party with absolute power, while several of his lieutenants hold important positions in Parliament and elsewhere, including Rome’s mayor Raggi. In fact, in the past three years, the M5S has been the biggest political party in Italy, or close second.

Mark Zuckerberg might as well create a “global” political party, and become way more powerful than any US President in history by controlling this political party, too. He doesn’t need to be frontline — other more experienced, skilled, pleasant candidates can give his party representation in two hundred countries all over the world.

I believe that this is way more likely to happen than Mark Zuckerberg running for President himself.

Prediction #2: A global economic recession

This is easier, right? Everybody is saying that the stock market cannot possibly run like this for more than six, seven years. It HAS to stop!

But my reasoning is different: there are at least FOUR major situations ready to blow, and the combined probability makes me think that, even if just one or two end up blowing, it means a crisis potentially as big as the 2008–2009.

ONE: Japan. A combination of high national debt, aging population, economic stagnation and strong insulation from the rest of the world mean that Japan can hit a major crisis between 2021 and 2023.

Japan Prime Minister Shinzo Abe (image source)

TWO: Europe. Between Brexit, Grexit, a weak Euro currency, the immigration issue, and essentially a failed “United States of Europe” that acts as a second, bureaucracy-heavy government in addition to each national one, it’s hard not to imagine that the Eurozone will have hard times in the future. More specifically, Italy’s debt is preoccupying, the immigration issue is driving populist movements and therefore a much greater political instability, Trump’s policy is going to damage Europe’s economy, and Putin’s rising power is going to twist Europe’s arms on many issues, including energy. Enough for you?

THREE: Africa. The continent is booming, both economically and in terms of actual population. But it’s doing so in a very unfair way: the Gini coefficient (which measures income equality in a country, with zero being a perfectly communist country, while 100 being a country where one person owns everything) in African countries is the worst in the world, and it’s getting worse.
Between the vast exploitation of land and natural resources (by China and others), the increasing demographic pressure and economic inequality, Africa is always in crisis, but a whole new level of crisis is coming, and it can affect the world around it.

FOUR: China. The second economic power after the US, and soon to be the first, China has terrible issues coming up: it might be bad news for Australia, but it will affect the entire world. A 250% debt to GDP ratio, infrastructure that maybe nobody will ever use, ghost cities that were supposed to shelter millions of people. A powerful political party might not be enough to avert an economic crisis, after decades of double digit growth. And we’re not even considering the North Korea issue.

And we could go on: Russia, the Middle East…

All in all, I think that there’s enough data to realize that MANY things can go wrong in the next three years, and that could be enough to trigger a new global crisis.

Prediction #3: Cryptocurrencies will be worth more than FOUR trillion US$ by 2020.

I have been following Bitcoin, and other cryptocurrencies, since 2011.
Like the “eternal” September in 1993, this June 2017 will be remembered as the “Ethernal June” (a term I just invented now), the month in which pretty much the world started to hear about Ethereum (and ICOs), and pay a much closer attention to Bitcoin.

Vitalik Buterin, the young co-founder of project Ethereum (image source)

Currently (June 12th, 2017), the “market cap” of all cryptocurrencies is at about $110 Billions, of which $43B is Bitcoin and $37B is Ethereum.

For the first time since Bitcoin’s inception, it is very clear that cryptocurrencies are here to stay. Their critical mass, their momentum, the investments being made, and finally a huge interest from governments (including Vladimir Putin, quite surprisingly) mean that in the next two-three years many valuable things will be built on top of this technology, and that Bitcoin (or Ethereum) has the chance to become the world’s first truly global currency, independent from any specific country or corporation.
Well, maybe not so fast. (“The fantasy of ‘de-politicised’, ‘honest’ money”).

Political aspects aside, there’s no denying that cryptocurrencies are going to become a fundamental part of our daily lives. Their ability to be programmed and updated allowed them to grow from just an insanely complicated tool to buy a pizza (for today’s millions of dollars) to a monetary juggernaut that every financial institution is now dealing with, including the “Gods of money” Goldman Sachs.

Goldman Sachs’ coverage of Bitcoin (image source)

(personal note: I hope to live to that day where some scientist will mathematically prove that these “graphs” with waves and targets and oscillations and such are hopeless forms of tribal religion — that’s what I believe and I want to be proven right).

So, why my prediction says FOUR trillions US$ by 2020, which is about 40x the value of today’s currency? Because if people keep believing in cryptocurrencies as store of value / a good investment / whatever, then its potential as an asset has barely started to build up. It is not hard to imagine that it could capture a value in the same ballpark as gold’s assets, which are worth $8.2 Trillions today.

It is also not too hard to imagine that, if the market cap grew about 40x from November 2013 ($3.3B) to today, it might as well grow another 40x in the next 3.5 years (end of 2020).
Unfortunately, there is really no other data point that we can reliably use, but let me quickly mention a few things that could happen, and could justify this 40x jump:

1. A cryptocurrency to measure, and exchange, reputation among humans.
2. A cryptocurrency to invest in any artist (musicians, painters) and gain returns if the artist in which you invested is successful.
3. A cryptocurrency that will seriously challenge our current Cloud providers (AWS, Azure, Google Compute Platform) by offering compute, storage and higher level services without the limitations or impositions of a central authority (corporation).

Prediction #4: Robocop

We will have a proper Robocop (a robotic cop, in case you have lived under a rock) walking down the streets of an Asian metropolis, by end of 2020.

Robocop (image source)

I don’t believe it will be a combination of human and robot, however, but simply just a robot (potentially remotely controlled by a human, and aided by some form of Artificial Intelligence). I’m pretty sure it will be able to quickly launch drones for reconnaissance, and will be armed and able to kill. In fact, I am even willing to bet that one of these robots will kill a human by 2023.

I am basing this prediction on a very long list of papers, or other sources, that I’ve read over the years. Frankly, it is not necessary for me to point at specific sources — just google around and you will find enough to document yourself and possibly agree that this might be a real possibility.

Prediction #5: we will challenge the concept of a city

Driverless cars are coming. In 2010, I predicted that Singapore will have driverless cars by 2020 — back then, only 1 people in 20 agreed with me. Today, in 2017, I believe that at least 19 out of 20 people would agree.

A future city? (image source)

Driverless cars will fundamentally change how we live in cities. They will deeply affect the real estate market, and of course there will be backlash and fights and lobbying — existing companies trying to defend their revenues, versus new entrants trying to conquer market opportunities.

In general, it’s easy to imagine a few things happening to cities — and it’s a bit harder, but not impossible, how these things are going to affect the real estate market.

1. Roads and parking spaces will be partially “given back” to the city: with driverless cars, you don’t need parking spots, and you don’t need too many lanes. This will free up a lot of space, for walking at the street level, or for storage and food production inside parking lots.
2. Housing and office prices will go crazy. Real estate is affected by some main factors: proximity to work locations, proximity to services, proximity to schools, proximity to entertainment options (including nature), and the general vibe of the area. Proximity is usually measured in miles, but with driverless cars it will be measured in time: and once driveless cars will manage to increase average speeds (by pooling together like a train when on a highway, for instance), and to make your trip much more enjoyable (because you don’t have to drive), there will be less pressure to be in proximity to these things, and more interest in living in an area where there is a lot of activity within walking distance. To make an example: you don’t need to live in San Francisco, if you live in the East Bay in an area where there is a sense of community, and local shops and the ability to walk around.
3. Public transportation will die (at least, short distance). This is quite obvious, right? Driverless cars will be far more efficient and cost effective than ANY other form of public transportation, at least for city-wide services.

These, and other changes, will push for a huge discussion on the role that cities have in shaping the world, and how we can improve that role. It is quite exciting to think that we will have a chance to “undo” the damage brought by urban sprawl.

(hint: this is why I am doing a startup that relates to these concepts).

Conclusions

I left out many other predictions, and interesting topics (e.g. Pornhub launching its own cryptocurrency (or doing an ICO), or Facebook doing the same): but I guess that for now this is enough food for thoughts.

However, allow me two final questions:

1. Do you agree?
2. What are your predictions for 2020?