Alexander Shulgin: Useful Mining for a Wise Future

The word ‘mining’ is at its peak of popularity these days, while the process of cryptocurrency minting has reached both government-owned facilities and privacy of individual homes. Still, there are some features of mining that are unknown to the general public. One of them is smart computation that can become useful in the future. ForkLog talked with well-known visionary and venture investor Alexander Shulgin about what it is.

ForkLog: What is ‘useful mining,’ and what’s so useful about it?

Alexander Shulgin: I’d start with an epigraph, a quote by Nathan Rothschild who rephrased Francis Bacon: “He who owns information, owns the world.” It’s 200 years old but it is only becoming more relevant. How do we perceive mining these days? Most people believe it is mining of cryptocurrencies. It is reasonable to revisit to Satoshi’s description of bitcoin. He wrote it was electronic cash, so everyone perceived it as money, not in its second sense, being a registry of assets.

See, p2p technologies existed before bitcoin, but they went nowhere. Their monetary value brought about by bitcoin gave them momentum, and there was a hype. If people were offered to mine data that have nothing to do with cash, there wouldn’t be any hype.

In fact, there is a spectrum of so called useful computations that cover not only mining of coins, but can mine real assets for the humankind, and it’s incomparably more useful and profitable than mere mining of data that we call cryptocurrencies.

All those Chinese GPU’s that will fail in a year’s time have only one value: they involve the youth in the technology and show there are new horizons where they could evolve, and their knowledge will be of demand. There are other important processes underway: the youth is studying and gaining expertise. Most importantly, they see a different picture of the world. It’s the world of tomorrow, the new habitat.

But even now one has to look ahead and see the new opportunities of mining. They are related to so called big data, and they’re expanding.

Of course, many have heard about big data, some even work in prototype projects focused on them. But it’s all still premature, and the flower’s petals are only opening. By 2020 there will have been 50 zetabytes of data with 99% of them non-structured and non-processed. That’s what will have to be tackled. Useful computations will have to be extracted from those raw materials.

Those hills of data naturally created over the centuries and highest mountains that are to be created by the humankind will have to be processed somehow. That’s where useful mining, which is a necessary way of processing those mountains of data, could come in.

FL: Where could this useful mining apply?

A. S.: Its applicability is diverse, in fact it can be applied anywhere. The most obvious areas of applicability are, of course, related to big data. Considering that data are generated by people, it’s clear that China and India will leave North America and Europe behind. It’s way easier to test a technology with 1.5 billion people. The technology will evolve with data processing and could create personal assistants like Alexa.

Alexa is more suitable in a North American household, not in a small apartment of a regular Chinese national. The size of your apartment influences the process of learning of your personal assistant. What is more important, of course, is to test this assistant with 1.5 billion people, which is more efficient and fundamental than testing with a million.

FL: So, Russia or Ukraine can’t catch up with that?

A. S.: As long as it doesn’t come to large-scale development of solar energy, which is abundant in Africa or India, Russia has an edge: we can produce it in bulk and save a lot. Post-soviet nations still have strong economies of knowledge, and very efficient human assets.

A nation might have a hundred people who could give the land a tilth in ten days, while another nation might have a thousand who could do it in a day. Therefore, their GDP will be higher than that of the nation with a hundred people. But when it comes to the economy of knowledge, a hundred knowledgeable and skillful people could give the land a tilth faster and more efficient than a hundred people. Such society could create a high value added product. Useful mining is a great helper in this regard: it will enable us to make great breakthrough while distributing all resources.

It takes the humankind farther than the economy of knowledge, to the economy of wisdom. Mining useful calculations is staged: cleaning data from noise, forming patterns, gaining knowledge, and using knowledge. The knowledge mined by such calculations will be the knowledge never seen before. Gaining such knowledge is insufficient even at this stage of development, it’s about proficient utilization of such knowledge. That’s what is called the economy of wisdom.

FL: So, standard mining is like using an iPhone just to make calls, while useful mining is like using its full functionality.

A. S.: It is. Useful mining is a new stage of mining’s development where every computation is useful for miners and the whole humankind. It will put us all to a new level. That’s where we’ll see optimization of all paperwork and banking. Lots of officials and specialists will become irrelevant. The notarial system will be the first to fall.

Many professions will be taken by the artificial intelligence, which will require lots of data to be processed with mining. That’s why I always tell my friends not to aspire their children to become officials, as there is no future there. Mining is irreplaceable for the internet of things. Robots and drones of all kinds won’t operate without processing enormous amounts of data.

The next area of applicability is the power of things. Imagine that currently 20% of all food in the world is wasted, which means that nearly 9% of all power in the world is wasted on unnecessary things. In order to produce a loaf of bread, one has to give the land a tilth, saw the rye, pull weeds, harvest it, bring it to the factory, make flour out of seeds, transport the flour and so on. It all consumes enormous amounts of energy. Thousands of machines and humans create things that go to waste.

Smart computations can redistribute all resources to cut expenses. Nothing will be wasted, no energy will be burnt in vain, and the power industry will be decentralized.

Here’s an example: this complex system of power communications is connected with copper cables that lead to lightbulbs, buttons, switches, and so on. Technologies may cut expenses on the infrastructure. The device may understand that someone’s entering one room from another and switch the light on in room one while switching it off in room two.

FL: So, smart computation is about optimizing all areas?

A. S.: Yes, useful computations are about smart solutions and valuable results. It’s like a planetary overhaul. When there’s overhaul in your house, logistics, communications and infrastructure are rearranged. The life of a person who lives there changes for the better. Ukraine, Russia and other post-Soviet nations are a perfect fit for such an overhaul. There, electric power is cheap and human capital assets are extremely valuable.

All those countries are pretty vast, there are things to be governed. I was born in Siberia where there are about 800 kilometers between two settlements. Each of those settlements, separated by wilderness, have to have power supply, roads, food etc. And it is all done for mere 300 people. Those processes have to be optimized with relocations and mergers. Smart computations and development of all those processes on the machine level is a great help to a government. It might even be necessary.

It’s way easier to feed 140 million people than 1.5 billion that are there in India. There are great areas where everything’s automatic, cheap and lacks overpopulation, so there are no problems that currently pose a colossal social load. Smart computations could bring about a great effect with a small number of people per square kilometer and necessary human capital assets.

Moreover, we’re located on the crossroads of two data volumes, which are China and Europe who have to exchange those data. We can create a new silk road to move those data. We will be processing traffic of those flows and dignify them with smart computations. That will result in huge national development.

Speaking of human capital assets, they could be positive, neutral and negative. Corruption, bribery and crime are negative, i.e. they take a toll on the community. Therefore, no renaissance is possible without educated and smart leaders who strive to reduce the negativity. Only then we can move forward combining positive human capital assets and the development of new technologies. I’m currently involved in a new project producing equipment and infrastructure for smart computations as an expert and a partner. We’ll try to be the first in the world.

FL: So, not everything is lost for Russia and Ukraine?

A. S.: Of course. The thing is to take the chance. Let’s add a quote from Vladimir Putin to the quote I recalled earlier: “He who becomes a leader in AI will become the ruler of the world.” Don’t forget that AI is the child of datamining.