Welcome to the 40th edition of Hold the Code! In this edition, discuss the rising trend of crypto replacing cash as currency and algorithms recognizing behaviors. Our weekly feature speaks to the role on AI in a "tech-enabled" future.
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Growing Demand for Speculative Income
Attracting Young Workers
Since the beginning of the pandemic, many workers in the USA have left the labor force. Because of this, workers have gained greater bargaining power with their employers, resulting in many negotiating for more flexibility and better benefits. Additionally, the perk of being paid a salary in cryptocurrency is gaining popularity. A cryptocurrency, such as Bitcoin and Ethereum, is a digital asset that utilizes computer code and blockchain technology to operate somewhat on its own, without the need for a central party to manage the system.
According to a global poll taken by deVere Group, a financial consultancy firm, over a third of millennials and one half of Gen-Z would be willing to have half of their salary paid in cryptocurrency. In addition to this, a survey from SoFi at Work and Workplace Intelligence found that 42% of the 800 U.S. employees polled would like to get NFTs as incentives for performance.
Some firms have offered to pay wages in Bitcoin to attract young workers. Younger workers are more likely to want the risk-reward benefit of being paid in a speculative asset like a cryptocurrency instead of a more stable currency like the US dollar. CEO of SharpRank, a company offering to pay its workers crypto, Chris Adams, said:
“We found that the younger demographic, who might have a higher risk appetite, tend to see risk-reward through a different lens than somebody who has really only ever known being paid in cash.”
Tony Jarvis, a director of enterprise security at the cybersecurity start-up Darktrace, has said that being paid in cryptocurrency is “trendy”:
“Offering to pay your employees with Bitcoin can be a way to attract what we might call ‘future-thinking workers’, especially if you’re in certain industries, like FinTech.”
Benefits and Risks
Being paid in cryptocurrency is quicker than a traditional bank transaction. With traditional bank transactions there are many additional costs, exchange fees and waiting times. With cryptocurrency, the crypto goes into your account the second after your employer makes the payment.
Another benefit from being paid in cryptocurrency is the potential to pay less tax. There are varying tax laws across different countries for cryptocurrencies. For example, Portugal has a 0% tax on Bitcoin, whereas India recently imposed a 30% income tax on cryptocurrencies. Some employees would benefit from lower taxes on cryptocurrencies if they were paid their salary in crypto.
That being said, it is possible that governments change their tax laws on cryptocurrencies as it starts to become a more popular method of payment. From the 18th of April, a new law in the USA will require individuals to report cryptocurrency transactions to the Internal Revenue Service.
Arguably the main risk of being paid in cryptocurrency is its volatility. The most common cryptocurrency, Bitcoin, has had its value fall by roughly 40% since November. When compared to the US dollar, which acts as the reserve currency of the world, cryptocurrency is much more unstable as a medium for transactions. The speculative nature of cryptocurrency makes the true value of any income paid in cryptocurrency very uncertain, which has consequences on future planning and budgeting.
Mimicking Consciousness?
Human observations of the world require complex combinations of sensory information and the ability to distinguish between contexts. For us, it is relatively simple to view a set of images and understand the behavior that is being done. For machines, this is not so easy. Alexander Liu, a graduate student in the Computer Science and Artificial Intelligence Laboratory at MIT, is implementing machine learning to process sensory information in the way that humans do in order to reach the same conclusions.
Thought Complexity
Presented with a set of images of a man juggling and smiling in enjoyment can be processed by the human brain in less than a second. However, there is much more complexity behind this conclusion. For instance, knowing the action of smiling is linked to enjoyment and recognizing that moving multiple circular objects in a circular motion is a behavior known as “juggling” are both difficult to understand without some form of prior experience. So how can a computer do it?
“Just like a Google search, you type in some text and the machine tries to tell you the most relevant things you are searching for. Only we do this in the vector space,” responds Liu.
Much similar to search engines, algorithms are trained with images on certain behaviors in order to translate sensory information into knowledge. One example of this would be like an algorithm viewing a baby crying in a picture and knowing to associate this with an audio clip with the spoken word crying.
Applications
Similar to any advancement in AI, teaching an algorithm to recognize certain behavior can have serious implications if used incorrectly but this can also allow for a more robust program that is far more effective in automating mundane tasks. Ideally, measures will be put in place to limit abuse of these types of programs while still allowing them to be helpful.
Weekly Feature: What Will Become of Our “AI-Enabled World”?
Would AI replace human workers in the future? People from all walks of life have tirelessly debated this question for decades now. However, some AI researchers and economists think this is the wrong question to ask when we think about our tech-enabled future.
Why hasn’t AI taken over yet?
It all started with some curiosity about why AI has been… underperforming its expectations. For ages, researchers and tech leaders have looked to AI to expedite economic growth and foster widespread prosperity. What prevented AI from creating this impact?
Erik Brynjolfsson, director of the Stanford Digital Economy Lab, writes that AI researchers and businesses have focused on building machines to replicate human intelligence. I mean, that’s a natural and straightforward choice, right? However, according to Brynjolfson;
“...the obsession with mimicking human intelligence has led to AI and automation that too often simply replace workers, rather than extending human capabilities and allowing people to do new tasks.”
Growing Tech Inequity
Simple automation – machines replacing human workers doing the same tasks – can create immense value for businesses. Therefore, it’s no surprise that businesses have been content with our society’s interest in human-like AI. However, the excessive focus on creating human-like AI for the purpose of replacing humans is not only narrow-sighted but also dangerous according to Brynjolfsson because it amplifies the market power of a few – a path straight down to greater inequality of income and wealth. For example, according to the Brookings Institution, in 2019, 38% of all tech jobs were spread across only 4 cities (San Francisco, San Jose, Boston, Seattle). Two-thirds of all AI assets are concentrated in just 15 cities. Says Diane Coyle, an economist at Cambridge University:
“resentment is simmering among many as the benefits are perceived to go to elites in a handful of prosperous cities.”
What can we do instead?
Instead of focusing on creating human-replacing AI, Brynjolfsson argues, we should explore the immense value that AI can create by producing new goods and services. When we talk about an AI-enabled world, we are alluding to a future where we are able to leverage exciting technologies beyond our current capabilities because of AI – not one where all there exists is AI.
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Written by Jake Connell, Dwayne Morgan, and Larina Chen.
Edited by Dwayne Morgan