Cryptocurrency is libertarian and artificial intelligence is communist

Peter Thiel and Reed Hoffman, the founder and co-CEO of PayPal, debated the relationship between technology and politics at Stanford University in early 2018. Decentralized and centralized technologies such as cryptocurrency and artificial intelligence were discussed, and how their underlying technical frameworks are implemented in different political regimes.

While Thiel, the former CEO of PayPal, and Hoffman, the former CEO of LinkedIn, are outspoken supporters of the new tech sector, they support opposing sides when it comes to politics. Thiel strongly supported President Trump in the 2016 election, and Hoffman, like many others in the tech community, sided with Hillary Clinton. Hoffman even acted as an adviser to Clinton and financed part of her campaign.

The discussion, started by Neil Ferguson, discussed the current political environment and the factors that may influence its change. In particular, will US politics continue to be divided between right and left or in some other way? Will it be supporters of authoritarian power against democratic power, nomenclature against populists, supporters of growth against supporters of the theory of stagnation? 

Thiel noted that technology development is a “treacherous business”, since it is relatively difficult to predict the trajectory of future technologies and policies. However, Thiel noted that while predictions are difficult, he remains interested in the confrontation between decentralization and centralization movements that is happening today. 

The opposition between decentralization and centralization focuses on two areas of technology that have gained great popularity in Silicon Valley. These two technology areas include the cryptocurrency industry and the artificial intelligence (AI) sector. Thiel drew parallels between the cryptocurrency industry and its decentralized nature, and the centralized trends of AI. Thiel stated that “Cryptocurrency is libertarian, and artificial intelligence is communist”, pointing to two extremes of technological and political ideological goals.

When commenting on cryptocurrency, Thiel was more interested in its underlying blockchain technology and how it could change modern society. Unlike existing technologies and centralized entities, cryptocurrency is typically open source and therefore allows anyone who can code to contribute and become a member of the community.

Even those who are unhappy with the future direction of cryptocurrency can create a new coin based on the original code.. Additionally, when forks are created, no one from the community or system can confiscate them unless they have access to or have compromised the user's private keys. 

Cryptocurrency was therefore originally designed to circumvent regulations and government controls, although some countries such as China have banned its use.

Artificial intelligence, on the other hand, depends on big data, which is often collected by large, centralized entities. A great example is Google. The search engine giant is a large, centralized entity that can use automatic learning, drawing on the vast amount of user behavior, search, and image data that has been collected over the years.

The Connection Between Technology and Policy

Understanding how these new technologies function, Thiel mentioned in the discussion that these trends and patterns are also reflected in policy. Throughout history, communist countries such as China and the Soviet Union have also sought to create highly centralized dominant economies.

Technically, highly powerful and smart AI can even help the state by predicting growth, output, and resource production. Since communist countries love the control that a political system provides, it is not surprising that the “Chinese Communist Party hates cryptocurrency and loves AI.”

Agreeing with Thiel, Hoffman provided another metaphor, saying that cryptocurrency is “anarchy” and artificial intelligence is “the rule of law”. Thiel offered many interesting ideas, but Hoffman was much more positive and optimistic about Silicon Valley's ability to create products for the benefit of humanity.

Hoffman noted that large tech companies such as Airbnb allowed people to become micro-entrepreneurs and used it as an important example of technology providing more opportunities for ordinary people. However, despite Hoffman's optimism, he is also very concerned about the impact of technology on politics.

“We must be guided by the principle that with great power comes great responsibility, we are not convinced that this future will be good for us, for our future.”

However, regarding America, Thiel believes that the economy only prospers when it comes to technology.