Artificial Intelligence

A.I. Will Soon Dominate Every Aspect of Human Existence. In Broken Capitalism: This Is How We Fix It, we devoted an entire chapter to the consequences of A.I. on economic and political systems, but here is a brief summary:

The largest corporations and governments on Earth have irresistible economic and geopolitical incentives to use A.I. to manipulate all markets, exploit and control their customers and citizens, control the flow of capital and wealth in every economy, and generally render humans and human liberty obsolete. With the terrifying convergence of A.I., the IoT, robotics, and the alignment of corporate and government interests, gigantic corporations and governments will be unstoppable if we, as a species and as a Gini Community, do not protect ourselves.

The only way to protect ourselves is to build our own A.I. and deploy it like a guardian around every mission-critical system in our lives, including all Gini systems. Thus, it’s important to clarify Gini’s position on A.I. and how we will use A.I. to protect the integrity and stability of the Gini ecosystem.

A.I. is Already Destructive to Financial Markets & Broad-Based Wealth. Every major financial market has already been adversely impacted by automated trading robots for decades, which have sucked USD billions from the global economy.^[1] However, over the past several years, more powerful A.I. has been controlling markets in unprecedented ways. “Nearly all market-making is presently dominated by machines that employ AI techniques. . . .” said Anthony Amicangioli, Wall Street Reporter for TheStreet.com.^[2]

In fact, for over two decades, A.I. has been evolving destructively in financial markets and it has primarily served to enrich a tiny number of entities who already have tremendous financial wealth and political power.^[3],[4] We have been pointing this out for many years; so, it’s nice to see some other people on Wall Street finally admitting this is true.^[5]

Free Human Markets Cannot Exist When A.I. Controls Markets.^[6] Puritanical Libertarianism states that the solution to every problem is simply to let the free market work, but there is nothing free about a market that is overwhelmingly dominated by robots zapping your wealth away at nanosecond speeds. The Gini Community is founded on the principle of “free and sustainable human markets,” which is unattainable in a world dominated by A.I. and systemically entrenched gigantic corporations that do not have humanity’s best interests at heart.

Existing Crypto Teams Have Too Many Conflicts of Interest. Every cryptocurrency project is launched based on a particular monetary policy and distribution of crypto wealth. The monetary policy and wealth distribution define and shape the structural economic, political, and cultural incentives of the project throughout its entire lifecycle. These structural incentives are more powerful than any other force because they determine which technical and economic options are acceptable to the power players at every step of the project’s development.

This is why the most influential humans (miners and crypto-rich whales) that dominate the major cryptocurrency projects today will never agree to reign in their own power to manipulate their markets. Thus, they will never be able to achieve sufficient consensus to fix the obvious A.I.- and monetary policy-based problems that are already hurting the integrity and viability of their ecosystems.

How Can We Prevent Malicious A.I. from Damaging the Gini Ecosystem? The Gini Foundation will not hesitate to implement rational, market-stabilizing and ecosystem stability mechanisms based on several techniques, including:

• Decentralized Gini Exchange. The decentralized exchange eliminates the need to depend on centralized gatekeepers that can lose their customers’ crypto and fiat wealth. This means the Gini exchange enables Gini stakeholders to trade their assets directly with one another on a peer-to-peer basis with no corporate middle-men or A.I. manipulating their accounts and trading activity. Additionally, as a nonprofit entity, all Gini transaction fees are minimized and only intended to prevent market abuse and to ensure the Gini ecosystem is sustainable.
• Speed Throttling. The decentralized Gini Exchange includes automatic trade execution speed-throttling to prevent high-frequency trading (HFT) robots from manipulating the Gini cryptocurrency market in ways that are detrimental to real humans.
• Systemic Bias in Favor of Humans. A.I. already has a massive edge over humans; thus, we are not ashamed to declare that we intend to support humans in every structural way possible, including developing mechanisms to give higher weighting to every human transaction within the Gini ecosystem whenever our systems can accurately distinguish between humans and robots. For example, the decentralized Gini Exchange will perform technical behavioral analysis to distinguish between humans and robots; then it will automatically block aggressive robots that do not add any meaningful value to the Gini market. “Meaningful value” will be measured based on publicly published criteria to ensure transparency and integrity within the Gini ecosystem.
• Meaningful Measure of Liquidity. Liquidity provided by robots today is often fickle and intended to trick human traders into buying/selling at the wrong time. We will stop this abusive tactic by measuring liquidity based on multiple criteria, including the length of time that a trader’s buy/sell orders persist in the decentralized Gini market order book. These metrics will give the Gini Exchange protocol an automatic weighting mechanism so that high-quality liquidity is pushed to the top of the order book; while fickle and abusive liquidity is down-weighted.
• Abusive Traders Will be Automatically Pushed Out of the Ecosystem. In cases where A.I. or human traders abuse the Gini market, the Gini Exchange Protocol will automatically impose gradually increasing transaction fees on those offending traders until it is no longer profitable for them to continue their abusive behavior. As always, all these fees will be recycled back into the Gini ecosystem via the Value Streams System.

Clarity of Purpose Leads to Clarity of Action. In addition to the features above, the Gini team will not hesitate to implement any other mechanism that a voting majority of the Gini Community believes is necessary to preserve the integrity and stability of the Gini ecosystem. Our highest priority is to create, preserve, and protect the integrity of the Gini ecosystem for actual humans to engage in real-world commerce. Thus, our purpose is to ensure that the Gini ecosystem is free from manipulation—even if that means implementing mechanisms to block A.I. robots and manipulative traders—because that’s what will make the Gini ecosystem more stable and free than any fiat or crypto market on Earth today.

Notes:

^[1] CNN, B. L. van D., Hedge fund manager, Special to. (n.d.). High Frequency Trading turns exchanges turned into casinos. https://www.cnn.com/2014/04/07/business/opinion-van-dam-high-frequency-trading/index.html

^[2] Amicangioli, A. (2016, September 29). Artificial intelligence has rising impact on financial markets. https://www.thestreet.com/story/13744043/1/artificial-intelligence-has-rising-impact-on-financial-markets.html

^[3] Biais, B., Woolley, P., & London School of Economics. (2011). High frequency trading. Manuscript, Toulouse University, IDEI.

^[4] Zagha, R., & Weltbank (Eds.). (2005). Economic growth in the 1990s: learning from a decade of reform. Washington, DC.

^[5] Conversation, T. (2016, January 31). The real problem with high-frequency trading. http://www.businessinsider.com/the-real-problem-with-high-frequency-trading-2016-1

^[6] Zhitnitsky, V. G. and I. (2014, April 3). Four Ways High-Frequency Trading Harms Investors and the Economy. Retrieved March 20, 2018, from https://www.thestreet.com/story/12616225/1/fours-ways-high-frequency-trading-harms-investors-and-the-economy.html