BITS, ATOMS AND ELECTRONS

Dick Pountain/Idealog 268/08 November 2016 11:13

In a recent review of Amazon's Echo I read that "voice assistants have been on our phones for a long time, but they haven't really taken off" (until Alexa that is). The part of this claim that stopped me dead was that phrase "long time". Apple's Siri arrived with iPhone 4S in 2011 while Microsoft's Cortana was rolled out in 2015, so it would seem that five years is a "long time" nowadays. And it's true. Technology progresses, if perhaps not exponentially then according to some power law, so five years really can now be a whole generation. Leaps from CDs to downloads, downloads to streaming, keyboards to touch screens to voice: for millions of youngsters those "older" techs, if known at all, seem prehistoric.

Many commentators would proceed from there to discuss the effect of such rapid change on the human psyche, but I propose to skip all that (except for a throw-away aperçu that this crazy pace is partly to blame for that widespread disgruntlement displayed via Brexit and Trumpism). I'm actually more interested in how sustainable this pace is. There is of course one popular strand of opinion that answers this question with "for ever and ever", until we have robots smarter than us, we live in virtual worlds, and all our minds are connected together into some kind of singularity. I don't believe a word of that, perhaps because I bored myself of science fiction back in the '60s. I'd argue instead that although progress will continue, it's already diverting into a different direction, from bits back toward atoms.

I first put Bits v Atoms in a column title over 20 years ago (PC Pro issue 22), when observing that you can order a pizza via the web but you can't eat the picture of a pizza on the web. A platitude that remains true, though you can nowadays order a pizza and have it delivered to your door by Deliveroo, Just-Eat, Hungryhouse, GrubHub or a dozen similar sites. We're made of atoms so we need to eat atoms, and though we pay for those atoms nowadays in electrons (credit card transactions), those electrons only have value thanks to the atoms they can buy. Cars, houses, boats, yachts, private jets these are the things the owners of our social media get out of the game, not pictures on screens (and most of us would like some too). This inexorable logic means that over the long-term, information, bits, pictures on screens, can only decrease in value compared to atoms, and we're already beginning to see the effect of this on the internet giants. IT and the internet may have reduced the cost of distributing bits almost to zero, but they've barely started on reducing the cost of distributing atoms/things.

On the one hand Twitter - which is still losing *billions* rather than millions - just had to axe its video-sharing service Vine. On the other hand Netflix and Amazon have both started creating their own original digital content, which surely contradicts my thesis. But does it really? Already I'm reading in the business sections that both companies are getting nervous about the enormous cost of producing this content, and I'd guess that both are doing it only as a long-term strategic attack on Hollywood and the over-air and cable TV companies. Once (and if) they manage to slay those, pillage their audiences and archives, it will surely be more profitable to revert to recycling that vast archive, rather than pay for expensive new content. The makers of the great movies of the 20th century had no choice but to spend all that money: given a choice, a canny modern investor won't.

There is a way though, admittedly a wildly eccentric way, that I can see for the internet of the far future to remain economically viable. Some rather loud hiccups notwithstanding, BitCoin has demonstrated that it can fulfill the role of paying for stuff in the atom world. Also, the notion of a Universal Basic Income is starting to be taken seriously in some rather surprising political quarters. Now BitCoin imparts value to its electrons through scarcity, by the process of "mining" them using a horrendously intractable algorithm running on a very fast computer. Fine, let's invent a smallish computer that will be fitted into every household like a utility meter, which contains a whole stack of fast GPUs that are continuously mining something resembling BitCoin - the amount yours uncovers becomes your Universal Basic Income. What's more, these GPUs are water-cooled, so it's also your central heating boiler! Voilà, energy and money integrated into the same system that's distributed via existing infrastructure. OK, so the banks and electricity companies won't like it much. Boo hoo.