Asia Blockchain Summit 2024 (ABS2024) will return with a bang from August 6th to August 8th at the Taipei Nangang Exhibition Center! To celebrate this event, Dynamique Zone has invited renowned bestselling author of “Currency Wars,” Song Hongbing, for an exclusive interview.
Background:
The English, Hong Kong, and South Korean projects will make a strong appearance in Taiwan on June 20th, unveiling the ABS Game Zone, the world’s largest Web3 game exhibition.
Table of Contents:
The Federal Reserve’s Dilemma: Fear of a 1970s-style Economic Hard Landing
AI Development to Hit the Energy Barrier: Overvaluation of Common Themes
Can Computing Power Transform into Currency? Beware of Reliving the Internet Bubble
The Only Consensus in the US Election: Suppressing China
Trump Embracing Cryptocurrencies is Just a Political Move
Is Satoshi Nakamoto a Group? Like the Outlaws of Liangshan Marsh
Environmentalism as a Barometer of Left and Right Wing Ideologies
About ABS 2024 (Asia Blockchain Summit):
Since its release in 2007, the bestselling book “Currency Wars” has swept the globe. Against the backdrop of the 2008 financial crisis, it became a hot topic and achieved 25 editions within just three months, becoming the best-selling economic book worldwide. Although more than a decade has passed, some people still believe in conspiracy theories behind currencies, especially after the COVID-19 pandemic. In the preface of the new edition, author Song Hongbing states:
In this era of increasing importance of AI, blockchain, and sustainable development, currency continues to play a vital role as the medium that controls everything. In preparation for the upcoming Asia Blockchain Summit in 2024, Dynamique Zone has invited author Song Hongbing as a guest speaker. We have conducted an exclusive interview with him to discuss the future global economic market, AI and financial technology, the rise of Bitcoin, and the secrets behind it.
Interestingly, the predictions made in Song Hongbing’s book, “Currency Wars,” about the profound changes in the global economy and geopolitics seem to be gradually coming true over time. After the outbreak of the pandemic, the US implemented large-scale quantitative easing policies, leading to a global state of high inflation and economic contraction. The key players in the international market are profoundly impacting the global political and economic landscape. Song Hongbing believes that the world economy is still largely influenced by the US dollar system:
Looking at the financial market news, it has been widely expected since last year that the Federal Reserve would cut interest rates this year. However, halfway through June, there are no signs of any interest rate cuts, leaving many investors confused and puzzled as they try to understand the current state of the Federal Reserve’s interest rate policy and its intentions. Some reasonable inferences may shed light on the direction:
Song Hongbing believes that by analyzing the actions of the Federal Reserve this year, we can uncover the dilemma it faces. He states that if the Federal Reserve cuts interest rates now, market expectations of inflation may quickly rebound, leading to a new round of stronger inflation, repeating the mistakes of the 1970s. However, if the Federal Reserve chooses not to cut interest rates now, issues such as fiscal deficits, interest expenses, pressures on small and medium-sized banks, and commercial real estate problems may lead to a systemic crisis, which is the root of this year’s market turbulence.
In addition to the uncertainties brought about by the macroeconomy, recent topics have been dominated by AI-related sectors and investment jargon. The intense competition in computing power among major technology leaders has attracted high attention from global investors. As the AI wave advances, the market cannot help but wonder if there will be a critical moment when this endless computation game, which relies on graphics cards and consumes massive resources, will come to an end.
Song Hongbing also quotes Huang Renxun, offering new insights, “If AI continues to develop according to the law of accelerated growth, by 2030 or 2050, the electricity consumption of AI alone will reach 14 times the current total energy consumption of the earth.”
Song Hongbing points out that the key lies in the accumulation of energy. Ultimately, this competition for computing power may become stuck in the supply of energy. It is an inevitable problem in the future. In addition to energy, materials related to power supply may also face shortages.
Song Hongbing states that the current surge in copper and silver prices and other commodities reflects people’s strong expectations for AI. However, the real economy cannot support such high growth because these prices will rise rapidly, affecting the development of other industries.
From the perspective of economic history, Song Hongbing reviews that AI is not the first great technological revolution invented by humans. The world has previously experienced the IT revolution and the electricity revolution, for example. The development of these revolutions had their limitations and challenges, and AI is no exception.
Therefore, Song Hongbing points out that the market’s expectations for new technologies are too high and believes that new technologies should immediately change the world economy. However, the economic penetration rate of technology is not as fast as people think, and significant impacts also require time. This overly optimistic expectation has led to overvaluation of AI themes, which is where the risk lies.
In addition to the financial themes brought about by AI, the industry, such as OpenAI, has also proposed visions like “computing power as currency.” CEO Sam Altman has put forward an innovative vision, considering AI computing power as an asset that can be used to replace money and provide a “universal basic income (UBI)” in the future. This would allow every citizen to share a portion of the computing power of AI models, enabling them to freely use these computing capabilities, similar to currency, through transactions, rentals, donations, and other means.
However, Song Hongbing believes that while this vision seems to solve the employment issues that AI may cause, there may be concerns similar to the history of internet bubbles behind it.
Recalling the 1990s, Song Hongbing once worked for WorldCom, a telecommunications company in the United States. At that time, WorldCom was the world’s largest network communications company, with almost half of the world’s traffic passing through it. Six out of thirteen servers belonged to this company. In 2003, WorldCom went bankrupt, becoming one of the largest bankruptcies in US history.
Geopolitics is also a significant factor influencing the world. The US is currently facing an important presidential election, and judging from the close race between Trump and Biden this year, the competition between the two sides is fierce, with few elections in history being so closely contested. The final result is still difficult to predict, and the advantages and disadvantages of both sides remain unclear.
In this context, how does Song Hongbing evaluate the current situation of the Democratic and Republican parties? Which candidate would have a greater impact on global economic stability?
Song Hongbing explains that this election is not just a competition between two candidates but also a contest between different political trends and forces. In the context of globalization and anti-globalization, regardless of the election results, a major division may be triggered within the United States.
During the interview, Song Hongbing also discussed how cryptocurrencies have become a topic in the 2024 US election. For instance, Trump has started accepting cryptocurrency donations, and his son recently issued a meme coin, which is a plus for Trump’s camp, attracting support from many cryptocurrency investors and industries. On the other hand, this has also put pressure on Biden’s camp.
In the past, Song Hongbing mentioned that the purpose of Bitcoin and blockchain is to subvert traditional finance and central bank systems, but their structures are not yet complete, making them not the final system. Now, the cryptocurrency industry has had such a significant impact on the US election. Does this change Song Hongbing’s perspective?
Song Hongbing does not believe that Trump is genuinely friendly towards cryptocurrencies. It is possible that everything is just a means for Trump to seek votes.
Regarding cryptocurrencies, we also wanted to know how Song Hongbing, known for his analysis of currencies and conspiracy theories, views the most mysterious figure in the history of cryptocurrencies, Satoshi Nakamoto. There are many different answers to this question, with some saying that it is a system invented by the US to infiltrate China, while others say that it was actually invented by a Chinese Japanese immigrant. Song Hongbing believes that Satoshi Nakamoto and Bitcoin are highly purposeful. They wanted to replace the arbitrariness of the existing monetary system with absolute mathematical rules. They never thought that Bitcoin would develop into what it is today, but with the success of Bitcoin, they may become the richest people on earth, turning Bitcoin from opposing currency monopolies to a new monopolist.
At the end of the interview, we discussed sustainability and environmental issues, especially in activities such as Bitcoin mining and AI, which require a large amount of computing power. The consumption of massive amounts of electricity is an important issue. In the visible future, these activities will not only not decrease but will also grow on a large scale.
In the past decade, ESG (Environmental, Social, and Governance) standards and emission standards have encouraged companies to purchase goods or engage in political actions to achieve certain sustainability goals. However, currently, with major US companies at the center, these companies have begun to move away from the demands of ESG, seemingly no longer mentioning these things. This conveys a signal that “humanity is about to enter an era of massive resource consumption,” and environmental issues are no longer a priority. Song Hongbing interprets sustainability and the contradiction of resource consumption.
The interview with Song Hongbing concludes with discussions on sustainability and environmental issues. In every transformation, there is a struggle for power, ideas, and interests. As Song Hongbing said in “Currency Wars,” whoever controls currency can dominate the world. The conflicts in today’s world are not only about territory and resources but also about the dominance of the financial system.
In the more than ten years since the publication of “Currency Wars,” we are honored to invite Song Hongbing as a guest speaker at the Asia Blockchain Summit in 2024. Finally, he would like to say a few words to the readers.
About ABS 2024 (Asia Blockchain Summit):
ABS 2024 (Asia Blockchain Summit) will be held from August 6th to 8th at the Taipei Nangang Exhibition Center, Hall 2. ABS 2024 has attracted over 15,000 participants from 30 countries this year and is known as the global premier stage for the historic moment of the blockchain industry.
ABS has featured nearly all the “leaders of the Web3.0 world” as speakers over the years, such as Binance founder CZ (Changpeng Zhao), BitMEX founder Arthur Hayes, Dr. Doom Nouriel Roubini, SEC Commissioner aka Crypto Mom Hester Peirce, Animoca Brands CEO Robby Yung, Litecoin creator Charlie Lee, Circle CEO Jeremy Allaire, and many others.
The speakers invited for ABS 2024 include Ethereum founder Vitalik Buterin, TON Foundation Chairman Steve Yun, Memeland&9GAG founder Ray Chen, Indian prodigy Anand, Three Arrows Capital founder Su Zhu, and many more.
ABS Official Website:
https://abs.io/