Have you been looking for a George Gilder Life After Google review? Well, here you are and this is my personal take on Life After Google by Geroge Gilder.
There are some big ideas expressed in this book. The crux of Mr. Gilder’s argument runs in a few sentences pretty much like this:
The developed world economy is currently dominated by Google’s business model of Big Data. This business model has some inherent weaknesses, it is top-down, centralized, and therefore insecure. Big Data and all it represents may have passed its peak and will eventually be replaced by something he calls the Cryptocosm. The Cryptocosm is a bottom-up model, built on blockchain technology. The Cryptocosm principles are, decentralized peer-to-peer architecture, inherently secure, and in direct opposition to the centralized attributes of Big Data. Cryptocurrencies, which are integral to the Cryptocosm will replace national currencies.
But that isn’t all the book has to offer.
It wanders in many directions, a bit like the random walk hypothesis of the internet surfer which is apparently linked to Google’s algorithms in some mysterious way. Some of these excursions seem to relate in necessary ways and build towards his main argument. Others seem to be interesting digressions.
As a reader, you aren’t told upfront whether the chapter you might be wading through will turn out to be a keystone in a supporting wall or an ornamental feature of the structure the author is building. Or maybe it all profoundly matters and I just wasn’t paying attention.
Newton and the industrial age
Mr. Gilder goes into great length tracing the history of how Google has shaped the now dominant online economy.
He starts in the times of Sir Issac Newton, whose explanations of the mechanics of the physical world of our everyday experiences laid the foundations for the industrial age.
From Newton, he moves on to explain the works of great mathematical minds of the 20th century. How Turing, von Neumann, and others debated the frameworks that enabled computer programming and the information age.
Gilder then explains a number of changes each of which contributed to what the information age has now become.
From the information age to Big Data
He explains how the Google founders saw weaknesses in the dominant advertising model. How they could transform that model from a transaction between the advertiser and the media channel to one that leverages users’ search data to feed them ads that match their individual interests. Powerful, energy-efficient processors and lightning-fast networks enabled the construction of Google’s machines that can analyze and serve the right content with paid advertising to users.
He explains how some of the tenets of information theory have been used to develop AI and machine learning that enable speech recognition, self-driving vehicles, and fabulously profitable hedge funds. How all of these achievements require aggregated data in one place. But also that the processing speed required means we have reached the limits of serial processing and parallel processing has now taken over.
Though we could have taken different directions, the age of Big Data was born.
Characteristics of the Big Data age
The online world that has been shaped primarily by Google is characterized by the following features:
- Big data,
- AI,
- Machine learning,
- Free searches,
- Free content,
- Personalized ads.
Gilder points out that one of the guiding principles of Google’s business model is that everything should be free to users.
As he explains, what has essentially happened is that the advertising model has been migrated away from TV, radio, and print media onto the online platform. The vision implemented by Google’s founders was that internet users will only be fed content that they want and only be shown ads or sponsored content that is finely tuned to their wants.
This is essentially a new variant of the advertising model. By making everything free the commodity that is scarce, or rather that is competed for is the users’ attention measured in eyeballs and seconds.
The inherent problems of Big Data
But to make this work, Google needs to know about what we the users are doing when we search and click-through on our online journeys.
Google needs to build a replica of the internet and through their algorithms, populate the massive Google data and processing machine with information about where each of us been, what we have been attracted to, what we have clicked on, what we have liked. All this so Google will know what content, ads, and sponsored material to feed to us…. and other scary things we hardly know about ourselves but that is another story.
As is now common knowledge, if you are getting something for free then you are not a client or a customer, you are a user. You, or your attention have become the product that is being packaged and sold to the advertisers.
The Big Data model requires that it is all brought together in one place, i.e. centralized for the algorithms to work their magic. This centralization makes it vulnerable to attack from hackers and other belligerents and hence insecure.
The ascendancy of hacking
We’ve all seen the news stories about computer system hacks where social security numbers, credit card numbers, etc have been stolen in their millions. We have also heard how organizations in the private and public sectors have to continue devoting more and more resources to combatting security breeches and the problem gets worse and worse with no obvious end in sight.
This is one of the fundamental weaknesses of the Big Data model. By bringing all the data together in one place, those with malintent know where to find it.
The gold standard and unit of account
We have to go back to Sir Issac Newton to get this point.
In addition to his revolutionary contributions to science and more lifetime achievements than most nation-states, he was Master of the Royal Mint for the last 28 years of his life. One of his big achievements in this role was to move Britain to the gold standard. This pegged the value of the pound sterling to gold, thereby stabilizing the currency and facilitating international trade which was a key component, along with ruthless military expansionism and attitudes of imperial superiority, etc, in the rise of the British empire.
This article explains more about the history of gold standards.
Fiat money
Currently, no country operates on a gold standard. All currencies either fluctuate in free exchange against other currencies as a function of interest rates and government monetary policies or they peg themselves directly to other stronger currencies.
In either scenario, the value of the currency, in terms of what it can buy in products and services is determined by government fiat, which literally means by order of the government.
The problem of fiat money
Even a little knowledge of history will tell us that governments can’t always be trusted to be honest custodians of their currencies. We see periods of inflation or deflation which effectively mean the transfer of wealth from one group in society to another and all the upheaval that involves.
Right now, in early 2021 huge quantities of liquidity have been injected into the economies of the world by central banks printing money and holding interest rates artificially low. All this is to combat the economic effects of the coronavirus. But an inevitable side effect can only be to store up inflationary pressures that will be felt sooner or later. But that is another story.
Bitcoin
Gilder explains well how Bitcoin was developed, what it is, and importantly what it is not. Bitcoin is intrinsically secure due to its decentralized peer-to-peer structure, trustworthy since all transactions are transparent to everyone and scarce because the number of Bitcoins is limited to 21 million.
So Bitcoin shares some of the attributes of gold as a basis for currency except that it has no external unit of measure that can be used to peg it as a unit of account. For this reason, says Gilder, Bitcoin as a currency will ultimately fail.
Ethereum
While there are now many cryptocurrencies, the other big rival with Bitcoin for our attention is Ethereum, which is technically the particular blockchain while Ether is the fuel that runs on the network.
Here is another article that examines Bitcoin, Ethereum, and how to invest or trade in them.
Ethereum is quite different from Bitcoin. While Bitcoin can just record transactions in an ever-expanding ledger, the ledger that runs on the Ethereum network can be programmed to enable conditional transactions, often referred to as smart contracts.
The blockchain
All cryptocurrencies, including Bitcoin and Ethereum, are built on blockchain technology. Gilder explains how many of the core features of blockchain provide solutions to the inherent weaknesses of Big Data and fiat currencies. Blockchain:
- is decentralized and therefore innately secure
- is developed through collaboration in a bottom-up fashion rather than top-down
- is transparent and open by design every node has the full record of all transactions so cannot be falsified and is hence trustworthy
- facilitates direct transactions between end-users eliminating the middlemen
- can function as a store of value and hence as currency
Much about blockchain technology and its proponents have a ring of fanaticism or just anti-government and anti-regulation about it. The book succeeds in explaining and in many ways justifying the fervor of the blockchain community.
Style, and other things
I must admit as I was reading through I wondered why I needed to be led on these lengthy excursions on the development of the computer. And the bits about information theory and Markov’s theorems and Turing machines and all that. Maybe it was necessary for my education but some of these threads while interesting in their own right were either left dangling or not really changed or resolved by the coming demise of the great evils of Big Data.
I often found the writing style to be a bit turgid, condescending, and superior in unnecessary ways. It often feels that he goes into excessive detail to prove a point that as readers we would have already accepted on the basis of less ponderous evidence.
Investing in new trends
I should point out that there is a fundamental premise behind this book, which actually some of the content contradicts.
That premise also lies behind many of the basic assumptions made by the investing public. This is the notion that we can research what is happening in the world, what are the trends in the economy, industry, and social demographics and predict what is going to happen. Predict the hot products and services of tomorrow, who will be the winners, who the losers, which new industries will emerge which old ones will dwindle – and then to invest in the winners.
One of the lessons of Life after Google is that machine learning and AI have already proved then can outwit investors and particularly investors who rely on using company fundamentals to determine the prospects for their share prices.
Machines learning to invest
The book talks about hedge funds that use machine learning to mine databases of stock, currency and commodity prices, news feeds, government data to find and exploit relationships that can predict prices. Even when those relationships don’t make any obvious sense to us mere human beings. The book points out how some of these funds have achieved significant and superior returns even over market downturns.
Gilder concludes, however, that this wealth creaming is not wealth-creating through long-term investment. It is more about short-term exploitation of arbitrage opportunities that adds a tad of liquidity but isn’t the same as nurturing innovation.
Strangely, he doesn’t provide any solution to this problem. Nor is it explained how the new Cryptocosm will undo the wealth-grabbing advantages that machine learning hedge funds currently enjoy. Or at least if he did, I must have missed it.
This post contains affiliate links.
You can purchase a copy of Life After Google, from Books-a-Million
Questions and answers
Q. Is Life after Google a good read?
A. Yes. You definitely will be rewarded with a glowing sense that you have successfully waded through a challenging tome penned by a visionary of entrepreneurship. However, the writing style is occasionally condescending and not all the threads of the narrative are brought together. Which left me wondering why I had to read through all of them.
Q. What does Life after Google predict?
A. That technologies and industries built on blockchain technology will rise and eventually overcome the centralized data behemoths and that cryptocurrencies will become the more trusted and secure stores of value and mediums of exchange.
Q. What is the meaning of Cryptocosm?
A. Everybody, whether individuals, companies, public organizations, industries, or economies who use blockchain technology as the foundation for secure and widely trusted transactions, all networked together will form the Cryptocosm.
Single page summary
Here is a single-page PDF summary of the main points of George Gilder’s Life After Google.
I hope you found this article interesting and useful. Do leave me a comment, a question, an opinion, or a suggestion and I will reply soonest. And if you are inclined to do me a favor, scroll down a bit and click on one of the social media buttons, and share it with your friends. They may just thank you for it.
Disclaimer: I am not a financial professional. All the information on this website and in this article is for information purposes only and should not be taken as investment advice, good or bad.
Affiliate Disclosure: This article contains affiliate links. If you click on a link and buy something, I may receive a commission. You will pay no more so please go ahead and feel free to make a purchase. Thank you
Life After Google
Pros
- Well researched
- Insightful
- Mostly logical
Cons
- Wordy style
- Meandering narratives
This sounds like an interesting book. I hadn’t even thought of “life after Google”, it has become such an integral part of our daily online activities, I can hardly imagine another data base taking over one day … although that is basically what usually happens in any other offline scenario, isn’t it? So, why not online indeed?
If Blockchain systems seem promising for the future, but Bitcoin is insecure, then what Blockchain system would be better to invest in?
Hi Christine, As you say Google has become so central to our online experience and our online experience and become so central to our lives. I remember seeing a John Oliver TV sketch on the centrality and dominance of Google in the search engine field and he mentioned Bing, and said – What is Bing? I don’t know, Google it I guess. – which is the point. As regards the predictions Gilder makes, I am not sure I entirely agree with the scenario suggested. I think it is more likely that the convenience of free stuff has more mileage in it. As for Bitcoin, it is secure and almost impossible to defraud within the confines of the blockchain itself. That is one of the big attractions. The issue as a currency is that it has no yardstick of measure other than the market demand for Bitcoin itself. I also think that we will see Bitcoin go higher in price. But as Gilder says it is a speculative play. As regards investment in blockchain, the best way would be to look for one or more ETFs specializing in blockchain technology. No irony here but a simple Google search on Blockchain ETFs will bring up a number of viable funds. These ETFs are also speculative to some extent. Just a word of caution though, the narrowly focused ETFs are likely to have quite low assets under management and may be quite illiquid. I would stick with a fund that has at least $100 million in assets and even then not be looking for short-term gain. Best regards, Andy
Hey Andy,
This is such an interesting article. I have never heard of George Gilder or the Life After Google.
In all honesty I am a bit skeptical about machines learning to invest and bitcoin or cryptocurrency.
I am on LinkedIn a lot and I have a lot of connections. But, I keep getting “lumbered” with people who disguise themselves. They say they do a certain job on their profile, but then they E-mail you saying they are cryptocurrency or bitcoin mentors and they hound you.
I see a lot of negative reviews on the news and online about crypto and machines learning to invest. But, I would love to know if you have ever invested in this before? If you have, then what was your experience?
Thank you for sharing and keep up the great work.
All the best,
Tom
Hi Tom
Thanks for stopping by. I have not tried using machine learning for investing directly myself, I don’t have the programming skills for that. The closest I have come is to use a very mathematical system using a stock screener and strict rules that I applied. I used this system which involved running the screener every half-month. I developed this system based on the writings of O’Shaughnessy. I started this in 2002 and it did extremely well for a few years. I had to abandon it at one point as the stock screener I was using was no longer available.
The investment success of machine learning systems is quite well documented. But of course, if we are asked to believe the topline published results unless you can dig into the trade details you won’t know whether the system was run entirely using machine learning or whether there was human intervention brought into play. Most of these systems though seem to arbitrage themselves out of whatever niche advantages they had originally found. Essentially there are so many intellectual and financial resources all gunning to beat each other at this that whatever edge is found gets whittled away by others getting in on the action.
I haven’t been caught by bitcoin mentors yet, or maybe they have tried and I just delete. I think most people are trading cryptocurrencies on a short term basis. I took a small position in Bitcoin when it was down early last year just for the fun of it. I guess the interesting thing about Bitcoin is that it has become a safe-haven for investors who are worried about the US dollar. I think those worries but also steady buying by some funds and big players is helping to fuel its recent rise. I still think it is a highly speculative play though and could as easily plummet as skyrocket.
Thanks again and best regards
Andy
Now here is a terrain I know nothing about and in fact are a little afraid of: cryptocurrency. Yet, it’s an interesting area, so I read your information with both eyes open. 🙂
A friend of mine invests all her spare money in her purse at the end of the week in Bitcoins. You frightened me a little by remarking Bitcoin is not going to last (I know, it was the writer who said it).
Well, if Blockchain is on the rise, eventually I should need to educate myself more on that terrain. Maybe it’s better for me to read a different one than Life after Google first. What do you think?
Hi Hannie,
Your friend will be in good company if she is gradually building positions in Bitcoin as many big investors are doing the same. I think the glamour value of Bitcoin will buoy it up for some time yet. But maybe at some point, they will become a bit like old collectible postage stamps. I think only a few of the really rare ones are still worth anything today. People just aren’t collecting stamps anymore.
Many of the published books on blockchain technology rehash information that is available online. So in fact Gilder’s book may be one of the best as it seeks to put blockchain in the perspective of an evolving industry rather than getting into minutia about the differences between individual cryptocurrencies – of which there are now many. However, as I say in this review, the book is quite a tough read and I would not be surprised if many who start reading it do not get to the end.
Another approach is to read blogs and cryptocurrency chat sites, but I would take everything with a pinch of salt and know there will be a lot of chaff with the grain. Like many new subjects, there is a rush to get into print and a great many of the books that you find will be just plain poorly executed and may misinform in significant ways.
Sorry, I can’t be more positive about it! I’d better stop there before I mix even more metaphors!
Best regards
Andy
It seems to be a very interesting book and very visionary indeed. It is scary to think about the risks of big centralized data. I kind of agree with the author that it will change in some how in the future, not sure about the Cryptcosom though but would be interesting see that model in place…. Cryptocurrency is a reality and is becoming more and more popular so why not Cryptcosom??? It is a complex matter but very good to see things from other perspective and get different insights!!! It seems a very tech book though, is it? Or is it just my impression? Excellent review and very informative!! Thank you so much for sharing.
There are indeed many aspects of Big Data that are quite scary. You don’t have to look far to see how dangerous it can be and not just in terms of identity theft etc. We’ve all heard how Amazon and Google can tell from your online behavior if you are heading for divorce before you even know about it.
I wouldn’t say that the book is very technical. For example, he doesn’t get into the technology of blockchain at all. If anything I would say the book goes into depth on abstract conceptual issues relating to information theory and some of the elements of Big Data. As regards the fulfillment of the vision, I think a mixed outcome is more likely. I think we will see blockchain technology making more and more inroads particular in areas such as supply chain management and logistics. I think a slow steady encroachment is more likely than a revolution.
Thanks for the comment. Best regards, Andy
Thanks for sharing this review. I’ve heard about Life After Google book, but never took time to see what it is really about. At frist glance, it seems like an awesome read.
It is indeed scary and exciting at the same time to see how Google “rules” the data world at this moment. Will it peak and collapse? Or is it going to thrive and evolve even more in the future. Somehow, I believe in the latter.
Nonetheless, this books seems to be really getting into the core of this topic and I’m looking forward to reading it. In fact, I’ve already put it on my To-Read list and it’s right at the top.
Thanks again for sharing your opinion about it. You have clearly read the book and understand what it is about. If I’m going to have any questions, I’ll come back to your review and leave another comment. Thanks!
Hi Ivan, I agree with you on how things are likely to develop. I doubt very much that Google and Amazon will disappear any time soon. I think it is far more likely they will evolve and remain dominant. I read Life After Google cover to cover a few months ago and only decided to do the review after I had read it. I found I had to go back and reread many parts of it as he does go off on many tangents. Somehow or other the threads do seem to meander and not all of them are brought back together to support his conclusions. It is very interesting though and I would still recommend it for anyone interested in pondering how the tech industry is evolving and where it is likely to go.
Best regards, Andy
Hello Andy,
Interesting read. I am not very familiar, if it all, with Bitcoin and Cryptocurrencies and I’ve never even heard of the book or author. Personally, I have not thought to invest in Bitcoin, although I have some friends who seemed to be interested. Perhaps I can point them to this book.
I think the part that really catches my eye is the fact that Big Data is so normalized in our world. There is meaning behind almost every click while you’re on the internet and I think it’s going to evolve in some way (I just don’t know how!)
Great post and very interesting. Thanks for the info!
Hi Jerry
Thanks for stopping by. As you say every click has significance. What is also interesting to read about is how some of the Big Data luminaries are of the opinion that humans are becoming less and less relevant particularly as more and more jobs can be performed by algorithms. Of all the books that touch on this area, this is probably one that offered the broadest perspectives even if you don’t fully subscribe to the conclusions.
Best regards
Andy
Hi Andy. Thank you for this very well written review and in-depth look at some of the concepts that George covers in his book. I have a question , though, regarding your (or better his) comments on bitcoin: Above you write
“So Bitcoin shares some of the attributes of gold as a basis for currency except that it has no external unit of measure that can be used to peg it as a unit of account. For this reason, says Gilder, Bitcoin as a currency will ultimately fail.”
How is this “it has no external unit of measure that can be used to peg it as a unit of account” to be understood? I understand that bitcoin is limited and that this scarcity therefore makes it somewhat “valuable”. But what “external unit of measure” does gold, for example, have, that bitcoin lacks? Sorry, maybe its hard to get my head around the sentence for me as a non-native speaker, or so, but I don’t really get it 🙂
All the best,
chris
Hi Chris
Thanks for your comments and the question. The comparison between Bitcoin and Gold is a question of how they compare in terms of the three basic functions of money, or currency. These are a store of value, a medium of exchange, and a unit of measure or account. These three functions are all different but they all require acceptance on the part of users in order to function. Bitcoin works as a medium of exchange because users accept that it has value and ownership can be transparently and securely transferred from one person to another. Bitcoin also serves as a store of value since you can acquire Bitcoin one day in a transaction and then use it at a later date and it will still have value. The primary difference between Bitcoin and gold as money is that gold also has intrinsic value as a precious metal. Gold is a rare metal that is used in electronics today and has been used for thousands of years in jewelry. Gold is divisible into units of weight that have a correlation with its intrinsic value as a precious metal. So in this way gold has some relation to an external yardstick.
In contrast, Bitcoin has no external reference that can link to its value. This is because Bitcoin serves no other function than being a medium of exchange and store of value and both of those functions rely exclusively on the acceptance and in effect belief of users. Bitcoin doesn’t do anything else, it is effectively its own closed system because it only serves to maintain itself.
Of course, the value that we as humans place on objects like money, gold, Bitcoin, etc all rely to a very great extent on shared acceptance and belief. The value that we place on Bitcoin is exclusively based on market demand and supply.
I hope this helps
Best regards
Andy