Technology oracle George Gilder’s writing output is nothing short of prolific with twenty books published during his long career. I read his broadband manifesto Telecosm at the height of the dotcom boom where he declared the age of computer over, and the beginning of infinite bandwidth with ubiquitous networks. His main premise was correct, but didn’t come to fruition for about fifteen years with the cloud computing phenomena. Now that we’re fully entrenched in the “big data” era, Gilder is rocking the boat again with prognostications about the next telecommunications phase. Published in 2018, Life After Google: The Fall of Big Data and the Rise of the Blockchain Economy, is Gilder’s latest pronouncement of what may be coming in the not-too-distant future.
I didn’t like this book one iota. I liked a lot of what Gilder had to say, just not the way he said it. The former gold bug, now cryptocurrency crusader, was erudite with long winded sentences. There was too much fluff in Life After Google, and it read like a mashup of a philosophy book and a technology manual. Lots of minutia about the structure of semi-conductors, data centers and networks. Although Gilder is very smart and has a great sense of humor, much of the work was self-serving. He positions himself as part of the resistance against the Silicon Valley technology giants. It came off like the John Connor character in The Terminator fighting against Skynet and the cyborgs that protect the network. In reality, if blockchain circumvents “big data” and ushers in a new era, Gilder and his bitcoin (BTC) buddies such as Peter Thiel, Chamath Palihapitiya and Marc Andreessen, are going to hit the mother lode. Palihapitiya already cashed in some bitcoin and bought the NBA franchise Golden State Warriors. We’re talking about a lot of money here.
The title of the book is Life After Google. Not Amazon (AMZN). Not Apple (AAPL). Not Facebook (FB). It’s Google (GOOG)(GOOGL) Gilder sets his sights on. This is because, “Under Google’s guidance, the Internet is not only full of unwanted ads but fraught with bots and malware. Instead of putting power in the hands of individuals, it has become a porous cloud where all the power and money rise to the top.”. Gilder believes that security in the first iteration of the Web was fine because there were no such things as financial transactions. When credit cards and cash exchanges were introduced, new security regimes become indispensable. He goes on the say, “The crisis of the current order in security, privacy, intellectual property, business strategy and technology is fundamental and cannot be solved within the current computer and network architecture.”. This is where the distributed network of blockchain comes into play and the cryptocurrencies that accompany it. The most notable cryptocurrency is bitcoin.
“Warren Buffett dismisses bitcoin as a ‘mirage’. Jamie Dimon, the CEO of JP Morgan Chase, calls it delusional. The Nobel laureate economist and Times columnist Paul Krugman declares it ‘evil’.”
It should be noted that JP Morgan Chase (JPM) now has the Quorum platform that utilizes blockchain. It’s gaining traction, but as an evolution, not a revolution, at least on Main Street.
Gilder explains Markov chains, where the outcome of a given experiment can affect the outcome of the next experiment. Google’s entire architecture is dependent upon Markov chain technology. “By every measure, the most widespread, immense and influential of Markov chains today is Google’s foundational algorithm, PageRank. Treating the Web as a Markov chain enables Google’s search engine to gauge the probability that a particular Web page satisfies your search.”. The author takes swipes at the “titans of the cloud” from Amazon to Facebook for using Markov models to predict what customers will do next. Gilder also discusses hedge fund Renaissance Technologies, and its stellar performance with a dependence on Markov chain technology. He calls Renaissance the Google-era titan of finance and investing. Yet, he is betting against all of them in that a non-Markov model will win, aka, blockchain. I found some of the technological writing difficult to read and understand, especially when discussing Markov chains. I had to go over it a few times, which I prefer not to do. Some of it can be chalked up to my own lack of knowledge. Some of it can be attributed to the stream-of-conscious style of writing that felt like a nod and a wink to Gilder’s associates and techie followers.
Gilder devotes a lot of pages refuting Google’s head engineer Ray Kurzweil, an “inventor-prophet”. I took this to be a backhanded compliment. “Google enlisted in a chiliastic campaign to blend human and machine cognition. Kurzweil calls it a ‘singularity’, marked by computation over human intelligence.”. A Markov enthusiast, Kurzweil maintains that in recognizing patterns, “hierarchical hidden Markov models are a guide to the mind.”. Gilder believes that the intellectuals of this era are simply blind to the reality of consciousness. He rejects Kurzweil’s doctrine that consciousness can be put to the side as was inferred in Kurzweil’s How to Create a Mind. Gilder is a staunch believer in AI, but nevertheless, spends a lot of time invalidating the teachings that machines will overcome human beings. You don’t have to worry that a Cyberdyne Systems T-800 Terminator is coming to get you.
A big clue about the contents of Life After Google is the publisher Regenery Gateway. On their Website the company states that, “Regenery Gateway, dedicated to serious works of cultural, social, and political analysis, is a reaffirmation of Regnery’s tradition of publishing original and penetrating conservative thinkers.”. You don’t get much more conservative than George Gilder. I get the impression after reading the book that he’s in the libertarian camp, and influenced by the Austrian School of Economics. He wants to blow up the whole system. “The premise of the cryptocurrency movement is the recognition that the old bureaucracies of socialism and crony-capitalism have failed. That is the problem, not the solution.”. He goes on to say, “Blockchains, smart contracts and cryptocurrencies are new ways to address the evils of the Google Age: porous internet security, unmoored money, regulatory overreach, network concentration and diminishing returns of big data.”. Gilder believes that the move to blockchain and cryptocurrency will happen in his lifetime, and he’s 80 years old now.
I couldn’t read the book in long sessions because there was so much fluff. It just bogged me down. That said, I highlighted relevant paragraphs and sentences, and on my second pass through, it made much more sense to me going over the condensed version. Gilder goes into great detail about the resumes and histories of obscure computer scientists that are well known in the bitcoin universe from their blogs and whitepapers. Hackers, programmers, electrical engineers and bitcoin miners could probably benefit from reading Life After Google. I read for information and pleasure. Although there’s a lot of information in the text, it wasn’t a pleasurable experience. About the only investment in the book that bridges both eras is Nvidia (NVDA). It will be successful with parallel processing if blockchain becomes mainstream. Like they say in the business world, the squeeze was not worth the juice. A better book on cryptocurrency and blockchain is Bitcoin Billionaires by Ben Mezrich.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: Am long the market with S&P 500 index funds and some small caps.