Some tech predictions for the Biden era
If you’re eager for a more decentralized tech ecosystem, this may be a mixed bag.
The following post is adapted from #Web3 Weekly, my regular newsletter about decentralization. If you’d like to get it in your inbox every Sunday, subscribe here.
As the U.S. presidential election is on everyone’s mind right now, I offer a few predictions below about its likely impact on tech decentralization. Hey, why not?
For reasons we’ll explore further on, I’ll stick approximately to the first two years of the Biden administration. So let’s say this is what I’m expecting through year-end 2022:
• There will be no new laws clarifying federal crypto regulation. In the absence of such a bill from Congress, we’ll continue to have a mishmash of administrative agencies “creatively” applying existing law, courts ruling on the correctness of those assertions, and the occasional state government doing its own thing.
Of course, this should be maddening to anyone involved in the industry. But the key word in my unpleasant presecription above is “Congress.”
As much attention as the new president is getting right now, it’s important to remember that Congress is a co-equal branch of government, with the upper chamber still in the hands of a Republican majority. Thus we now have the uniquely American phenomenon known as “divided government,” which in the last several decades has usually meant paralysis.
When the two American parties have to share power like this, it’s become difficult to pass legislation on much of anything, let alone regulation of a complicated new technology that most members of Congress are still struggling to understand. Thus we’re likely stuck with the status quo at least through the mid-term congressional election in 2022.
A similar dynamic applies to potential new regulations of Big Tech, by the way. Which brings us to…
• Tech giants’ algorithmic filter bubbles will continue to undermine democracy as we know it. Ex-Googler Tristan Harris explained this eloquently in the latest installment of Bill Maher’s talk show Friday. I’d highly recommend watching the clip in full, but his jist is that we’re about 10 years into people getting most of their news from algorithmically customized feeds on social networks. This greatly contributes to the phenomenon of people of different political persuasions seeming to live in separate factual universes, and it’s unlikely to cease anytime soon.
• Ethereum 2.0 will be a hit. For me, this is the flipside of Big Tech’s unchecked oligarchy. If U.S. antitrust laws are of limited use in combating the problem — the Justice Department’s pending lawsuit against Google notwithstanding — our next biggest hope is for new products to arise in the marketplace to disrupt the giants.
In other words, we can’t ultimately separate technical aspects of decentralization from the economic ones.
In that spirit, Ethereum 2.0 is a glimmer of sunshine indeed as a distributed computing platform that could provide an alternative to Big Tech’s troves of user data. Its launch appears to be on track for as early as December. From there, it will likely proceed as a small but promising platform, with new tools and applications gradually coming onboard over time.
• The era of a weaker, more digital dollar will take hold. Bitcoiners in particular have been obsessed with money printing by central banks lately, especially the greenback, for good reason. It’s been a form of economic stimulus to counter the virus-driven global recession.
In the U.S., more traditional forms of fiscal stimulus are likely to be limited or nonexistant in the next few years. (Congress, again.) Thus the Federal Reserve is likely to continue its printing of dollars as a stopgap alternative.
As the Fed has a high degree of political independence, it may also press ahead with a “digital dollar” plan. This would certainly give the bank additional flexibility in doing its work.
That said, the fate of an “official” digital dollar may ultimately be of lesser consequence to consumers, since they already have several dollar-based stablecoins available from other entities, including Tether, DAI, USDC, and more. These tokens will likely only continue to increase in usage and trading volume in the next two years as more users realize the dollar is already digital as you want it.
• Our cities, including the tech and finance hubs, will lead America’s eventual economic recovery from COVID19. It’s fashionable right now to bemoan the fate of San Francisco, Seattle, New York, and other U.S. cities hard hit by the virus. Supposedly, a “work anywhere” future will benefit all the other anywheres out there, whether they be suburbs or hollowed-out industrial towns or whatever.
I don’t really buy it. The bottom line is that our economy generally will be more tech-driven after the virus as retail, corporate meetings, education, and all sorts of other activity have moved online. And a more tech-based economy tends to be a more urban one, not less. This has been a consistent pattern through thousands of years of human history, even older than America itself. It’s not going to end now.
To put it a different way: Which would you a rather be right now — a tech hub that already has scads of tech talent and corporate headquarters in place, or a small town whose economy revolves around the local mall, movie theater, and brick-and-mortar retail?
Yes, the tech hub has more to lose, as all the hand wringers are pointing out. But it also has more of a foundation to built a future upon.
That’s it for now. Just for fun, I promise I’ll check back after the mid-term elections in ’22 to see how all this panned out.