In a recent interview with The Guardian, Kagan dismissed cryptocurrencies as having no real value to society, suggesting that AI chatbots like ChatGPT would provide a better return on investment.
Although Kagan’s arguments merit a closer look, they may not hold up to full scrutiny. It is inherently flawed for Kagan to compare AI chatbots with cryptocurrencies. Despite the clear advantages of AI chatbots, they have different uses and goals than cryptocurrency.
The original purpose of cryptocurrencies, such as Bitcoin, was to ensure decentralization, security, and privacy.
These two technologies cannot be directly compared because their roles are too different; it would be like comparing apples and oranges.
An Oversimplification of a Complex Issue
Kagan’s dismissal of cryptocurrencies as a “craze” that “brings nothing useful to society” is an oversimplification of a complex issue.
Moreover, the banking sector has been changed by cryptocurrencies, which now make international transactions quicker and more effective.
Furthermore, they have enabled individuals in countries with volatile currencies to protect their wealth and gain access to global markets, as seen in Venezuela and Zimbabwe. Kagan’s dismissive stance ignores these significant societal benefits.
The underlying technology of cryptocurrencies, blockchain, also has potential uses that go far beyond banking.
Smart contracts, supply chain management, and secure data sharing are just a few of the ways blockchain technology has the potential to transform various industries.
By ignoring the value of cryptocurrencies, Kagan is unintentionally undermining blockchain’s potential.
The Crypto Analysis by Nvidia is False
Kagan’s claim that crypto mining/validation is comparable to high-frequency trading is deceptive. While both industries necessitate massive computational power, their societal impacts are not comparable.
High-frequency trading has been chastised for its potential to destabilize financial markets, whereas cryptocurrencies have the potential to democratize finance and increase financial inclusion. To compare the two is to misunderstand the fundamental principles and objectives of cryptocurrencies.
Nvidia’s anti-crypto stance threatens to stifle innovation
Finally, Kagan’s views on Nvidia’s role in the development of AI systems, as well as its decision to limit the mining capabilities of its graphics cards, are dubious.
While it is understandable that the company would prefer to prioritize AI research and gaming clients, it is critical to consider the broader implications of such a decision.
Nvidia may be stifling innovation and contributing to the centralization of mining/validator power by restricting access to its hardware for cryptocurrency mining, which contradicts the core principles of cryptocurrencies.
Kagan’s arguments against cryptocurrencies are, at best, oversimplifications of a difficult topic and, at worst, rejections of the potential social benefits that they might offer.
Kagan is doing a disservice to the complex discussions surrounding both technologies by limiting the discussion to a binary choice between cryptocurrency and AI chatbots.
Cryptocurrencies and AI chatbots can coexist, and dismissing one at the expense of the other would be a mistake.