Hello! Today I will tell you about a cool paper I came across this week. It is written by Zheng and Trott, et al. (2020) and is basically about how machine learning could offer solutions for economic problems. In particular, the authors claim that they can strike a better balance between efficiency and equality with AI tools than with a Market Economy or even with a Saez solution, according to their metric.
This excites me because it is related to what I have been working on, but also it makes me think about cryptocurrencies, so I want to write down a little bit on what I think about it.
First of all, I am not a fan of cryptocurrencies, because I believe that the mechanisms and systems that we have developed are not trivial, so I don’t see an easy way out of the traditional forms of money. Now, I should say that my understanding of cryptocurriencies is not that it is an electronic way of payment, but rather that it is a peer-based algorithm which allows to give backup to the coin, in contrast to other coins which might be backed by gold, silver, or even faith.
I do believe that cryptocurrencies can be more stable than other coins, even the Euro or the Swiss Frank. Even nowadays, some people are using it in order to hedge themseleves against the wickedness and snares of potential inflation coming from governmental stimulus to the major currencies. Still, it is not clear how liquid of an asset it will be, and therefore, it might not be as convenient as a method of payment. Some say that the electronic systems, like the cell phone will allow for a safe and quick conversion of currencies, but still they are dependent on international regulations which exceed the coins themselves.
Second of all, I think they have been mainly used by criminals, and I don’t need to explain much why that is not ideal, particularly coming from Mexico. But even if the criminality and the liquidity problem was solved, there is one big question, which is fundamental: should a large sector of the economy turn into cryptocurrency, then what would happen with the regular central banks? Is it really placing us closer to what Milton Friedman would have thought of? And how does this relate to Machine Learning? I hope to write more about this in the near future. The way I think of it, my third year paper might shed some light into the bridge between Machine Learning and cryptocurrencies, and much more.
By the way, I recommend learning how to use perceptilabs, if you are into ML, it seems an easy tool to apply some techniques and maybe even using it to solve a problem.
I share some links which might be useful to learn how to use perceptilabs:
PS: I share with you a beautiful of a kid who stole my heart this month. 🙂