Russian Celebrity Alexander Shulgin on Decentralization and Inevitability of a New Reality

The technological revolution including cryptocurrencies and blockchain technology is boggling the minds of the contemporaries, launching the most daring and fantastic scenarios of our civilization’s future. Talking with ForkLog, a well-known Russian visionary, composer, venture investor and founder of corporate group Familia Alexander Shulgin shared his vision of blockchain technology and the system of tomorrow’s geopolitical relationship.

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FL: Alexander, why do you think blockchain should be talked about? Why are you so much interested in the technology? Maybe, you’re just interested in investment and innovations in general?

A. S.: I’ve been involved in innovations and investment all my life. The thing is that they weren’t called innovations then, this word is rather new. Certainly, I keep my eye on any new trend, so I knew about bitcoin back in 2010. Before that, I was interested in p2p technologies, things like KaZaA. It was the service created by those Estonian guys who later made Skype. I think it was the first time when p2p technologies caught my attention.

It’s not too interesting to talk about cryptocurrencies, just because everyone is talking about it. Blockchain is interesting because we’re seeing the maturing technology. Apart from that, the technology is comprehensive, so it isn’t bent on just one of its products, bitcoin.

Not so long ago authorities and regulators acted in partisan spirit in regard of cryptocurrencies and even threatened with criminal prosecution, but later everything has changed: they are way more sympathetic now and even seem to love blockchain. Meanwhile banks and financial institutions are jumping aboard various blockchain consortia.

The truth is that understanding the technology’s importance is not too hard. When reading my lectures, I speak about the ways industrial revolutions were taking and show how technological practices were changing, how everything was growing centralized (including finances, governance, production, logistics, media, etc), and that it all has reached the tipping point.

Today we’ve entered the era of omni-decentralization which covers certain economic sectors and some social issues. This decentralization became possible due to such technology as blockchain, among other things.

FL: Speaking of decentralization, how exactly do you perceive it? Is it a positive or a negative phenomenon for you?

A. S.: It’s positive as there’s no other way of perceiving progress. One can’t stop it, and I do my best to be on par with it, or even ahead of it if possible. What does the phrase ‘run with the wind’ mean? Conservators understand it as ‘feebly sloshing,’ ‘acting passively in the wake of given circumstances,’ and so on. I see it differently. For me ‘running’ is tolling. When you run with the wind, you increase your tempo, and eventually it turns out you’re faster than the wind.

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FL: You mentioned blockchain consortia in somewhat negative context. You don’t trust them? Do they seem futureless?

A. S.: You are hearing things! It’s not negative, it’s just slightly sad. Consortium is yet another attempt in centralization. Take R3 for instance. Its members are rather serious people, yet the consortium has recently creaked at the seams. In my opinion, such a platform based on Ethereum blockchain is a purely corporate solution. Or, there are Russian guys from Sberbank, the Central Bank, QIWI etc. creating a consortium based on certain technologies. It’s all inside, you see.

I believe the biggest, the most stable, and the most honest blockchain is bitcoin. I certainly wish all the best to all other consortia, especially to ours, because they are being created by my partners, colleagues and friends. Still I believe that consortia are created for the sake of what the very philosophy of decentralization is standing against. Eventually, they produce simulacra and unnecessary add-ins. Try being simpler and less centralized.

FL: Well, there are banks trying to employ blockchain technology. Do you think they’ll succeed in adapting it for their needs? Or, as some say, they’ll eventually have to admit their failure to compete with alternative fintech solutions?

A. S.: We have entered the era of global transformations. What’s happening is metamorphosis, not some sort of an update, upgrade or a mere change. You may compare it to the way a butterfly comes out of a caterpillar, or steam out of water. I mean there are profound tectonic changes in all areas, including geopolitics, industry, monetary policy, social system, and so on. The overwhelming decentralization of everything underlies all those fundamental changes.

FL: You said that those technologies will somehow transform even the political system.

A. S.: Of course. The geopolitical system will change. Instead of 200+ existing nations with their borders and existing governance models I expect nearly seven digital states, or digital communities to emerge within 15 to 20 years. They will be forming around the U.S. with their Silicon Valley and the British Commonwealth; China and its Great Firewall; India, which also tries to protect its internal market and create a digital one; Islamic nations; and Latin America nations and ASEAN countries. Europe doesn’t look likely to create a Single Digital Market due to disagreements within the union. Economy countries of today like South Korea and Japan are questionable here. They might become a part of a Eurasian digital economy based on the digital space that’s only being created here. Let’s conventionally call it RU-state.

FL: Will state governance of such digital communities be built on the principles of e-democracy?

A. S.: I wouldn’t use the term of ‘democracy,’ as the transformation will entail new terms. Of course, there will be a completely new system. This blockchain technology, what does it do? It allows you to remove intermediaries, the third party, or, in this case, a nation state. I’d rather use the term coined by Marshall McLuhan, ‘the global village.’ There will be more socialization, and capitals will be redistributed. Lots of functions currently existing in nation states will just wither away, while those still required will be replaced by their new forms. Do you know the power of private armies? It’s enormous! In some African countries, mineral resources are protected by private armies, which are way more efficient than national armies.

FL: As to efficiency, we all agree about that. But will it be safe for regular citizens of such digital states?

A. S.: I think, the new technologies and the transparency the offer will allow us to see who’s dangerous and who’s loyal. In this system, no masquerade of facts and concepts will be ever possible. If we all switch to a decentralized ledger, it will be hard to come up with something bad and then hide it. The system will work in such a way as to cut out all hostile intentions automatically, with technologies based on deep learning and feedback tracing.

What’s the most important thing for a human being? Its only purpose is to be happy. Technologies will work like a sculptor working with a boulder. It will cut out everything unnecessary, everything that had been hindering the movement. Decentralization, robotization, and softwarization will cut out like 80 per cent of jobs! People won’t have to work to survive. They will at last have some time to live.

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FL: Such perspectives actually scare many people. Some just don’t know how to live without realizing you don’t have to do some routine job any longer. It all might result in upsurge of unemployment and some other global problems, don’t you think?

A. S.: Well, why do you think big strong guys work in security or parking services? That’s because even today there’s a need of involvement and employment of a human being. Even today there’s an issue of ‘extra people’ in the withering system of today. Technologically we’re ready to enter the new reality, implement e-government, and go even further with implementing we-government. But certainly, in social terms it’ll be a great disaster for today’s adults. On the other hand, there’s a new generation that doesn’t consider processing some papers at a state service. It’s engaged in creating apps, augmented reality, cyber-sport, and so on. It’s self-employed. The future society will be based on direct interaction without intermediaries. It will be based on co-creation, co-ownership, and altogether co-everything. And blockchain technology will promote it all!