By the time the clock strikes 2022, the tech-heavy Nasdaq will have one of its biggest annual declines in at least 14 years. Other indexes, including the broader S&P 500 and MSCI World, fared better, but still saw investors reeling from their heaviest losses in more than a decade. The biggest victim was of course crypto punters. Not only have clients of outfits like brokerage FTX and Voyager and stablecoin TerraUSD/Luna been taken to the cleaners, but bitcoin, the currency at the heart of the bubble, has lost two-thirds of its value.
The chaos, coupled with rising interest rates, a global economic slowdown and the covid-19 pandemic, has taken a toll on startups from big names like Google and Facebook, who can’t keep their employees for another year.
There is some positive news, however, and here are a few examples.
Post-Quantum Will Be Safer: Over the next few decades, a new paradigm in computing will be implemented. Instead of performing calculations in binary units (bits), systems operate in complex units called quantum bits (qubits). Computer scientists are rightfully excited about the possibility of more powerful and efficient machines. However, security researchers worry, because this means encryption approaches to keeping data safe could be compromised. Anything stored today, from passwords to credit card numbers, could be deciphered by an as-yet-yet-invented quantum computer in the future. In July, the US National Institute of Standards and Technology finally released four algorithms developed by outside researchers, “designed to withstand future quantum computer attacks.” Without such safeguards, the wider community—from financial institutions to Internet companies—lacks assurance that the systems they’re rolling out now will be reliable years into the future. Now you can boldly move forward into the unknown.
Machines can chat and draw: By 2022, several artificial intelligence systems have made headlines with their startling ability to mimic humans. Writing tools like ChatGPT can answer questions, compose poetry, and write code. DALL-E does the same for images as a handful of others do. It’s okay to be excited or scared about this development. When a university student accepts to use the technology to write essays and artists realize that these bots are built on stolen works, humanity has reason to worry. But you can’t stop progress, so the challenge ahead is how to steer AI towards uses that help us and avoid those that could harm even a small segment of the population.
Crypto Credibility Crunch: For all the gloating about crypto bears in the sector in 2022, we must not forget that thousands of people have lost tons of money and the victims are too numerous to count. However, there are striking parallels with the dot-com bust two decades ago that paved the way for a period of massive innovation — online payments and communications software, among them — that truly improved the lives of billions around the world. There’s a good chance this latest crash will force entrepreneurs to focus on businesses with practical value beyond cartoon monkeys and pump-and-dump schemes. And if we’re really lucky, venture capitalists will stop enabling crypto charlatans and turn their attention to funding more worthwhile projects.
Mask Torches Twitter: The Bluebird is not dead. In fact, it probably has a few years left in it. But the short-term control and dismantling of social media services has shifted the focus to the few alternatives that can be friendly and tolerant platforms for sharing information and opinions. Regardless of Twitter’s future, the world will be better off five years from now if something comes along to disrupt the megalomaniacal billionaire’s power.
America Gets Together Chips Act: Passing a $53 billion corporate welfare package aimed at attracting chipmakers is akin to Washington’s moonshot 60 years ago. A lot of money is wasted, there are a lot of failures, and the US probably still won’t catch up to Taiwan in semiconductors. But spurred by Arizona’s own investments in a Taiwanese semiconductor manufacturing company, the nation that invented dream chips will regain its former glory.
Decentralization of production: After years of relying on a single country for most of its equipment, the world finds itself at a point where the upheavals of Covid, supply disruptions and geopolitical tensions are forcing a rethink in manufacturing. Apple Inc. is finally taking alternate locations seriously, and we’ll see more of its products in places like India, Vietnam, Europe, and possibly North America. Many companies, spanning industries from electronics to automobiles, combine their product sources. The point of diversification is not to hurt China, but to make supply chains more resilient.
You can look back on a difficult year and feel a little down. The days of the salad may be over, but the time for real growth is now ripe for future technology.
More from Bloomberg Commentary:
• The race is on to fight an unlikely threat: Tim Culpan.
• Did a robot write this? We need watermarks for AI: Parmi Olsen
• If Elon Musk would tweet instead of tweeting: Tim Culpan.
This column does not necessarily reflect the views of the editorial board or Bloomberg LP and its owners.
Tim Culpan is a Bloomberg Opinion columnist covering technology in Asia. He was previously a technology reporter for Bloomberg News.
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