The best regulated crypto exchange
Find out why?
50 BTC prize pool!
Get your share!
I'm in

The next technological breakthrough: what will it look like and how will it impact the current financial system?

By Mikhail Karkhalev

A new technological breakthrough is one of the most anticipated events of the new decade. Everyone sees it from a different perspective. While someone is waiting for hoverboards from Back to the Future to appear on the streets, others crave intergalactic trips or a Matrix-like artificial intelligence that will take over the world. The reality is much more simple, but still interesting.

A new technological breakthrough is one of the most anticipated events of the new decade. Everyone sees it from a different perspective. While someone is waiting for hoverboards from Back to the Future to appear on the streets, others crave intergalactic trips or a Matrix-like artificial intelligence that will take over the world. The reality is much more simple, but still interesting.

By “technological breakthrough”, we mean the development of completely new technologies that will move humanity to a new level. Such a breakthrough normally occurs every 40 to 50 years, contributing to the recession and further surge of the economy, as routine disappears and a new era begins.

If we apply the Kondratiev wave model, we can see how the technologies that had a significant impact on our lives had been evolving.

  • 1780-1843: development of textile industry, invention of a steam engine;
  • 1844-1890: development of ferrous metallurgy, construction of railways;
  • 1891-1944: development of mechanical engineering, electric power, chemistry;
  • 1945-1981: development of the automotive industry and oil refineries;
  • 1982-2018: development of IT, telecommunications and internet.

The cyclical nature of technological development coincides with the gradual progress of monetary systems. This sounds pretty logical, as the financial systems are forced to change amid the technological breakthroughs:

  • 1821: gold standard is accompanied by a peak of the first technological breakthrough;
  • 1867: the Paris monetary system coincides with the peak of the ferrous metallurgy;
  • 1922: Genoese monetary system coincides with the peak of mechanical engineering;
  • 1944: the Bretton Woods monetary system appears amid the decline of the global financial system and the end of World War II;
  • 1976: the Jamaica monetary system emerges, partly as a result of the oil refining industry development. In February 1973, the monetary crisis led to the international currency market closure. By March, most industrialised countries abandoned dollar parity. The oil crisis of 1973-74 finally put an end to the history of the Bretton Woods system.
  • 2008: At the peak of IT development, the most shocking crisis since the Great Depression occurred. Some countries even urged to move away from the Jamaica monetary system at the G20 anti-crisis summit in 2008.

All such changes happen for a reason, as new technologies create a huge number of jobs, new professions and economic ties between corporations and states. At the same time, previous technologies do not disappear. Metallurgy, the textile industry, the automotive industry, the electric power industry and oil refining have noticeably changed over the years.

To achieve a new technological breakthrough, we need to invent a new technology that would be more advanced and game-changing. Nowadays computers can solve the vast majority of modern problems, but their capabilities are limited and we have almost stopped creating something new. Instead, we reinvent existing objects; new discoveries are not possible because of the lack of more powerful hardware. It's not about artificial intelligence, as its development depends on a device that could process information just as the human brain does: simultaneously and logarithmically rather than linearly and sequentially. And we already have a device that is capable of such work.

Quantum computer

The development of many breakthrough technologies depends only on the capabilities of modern computers, which are in fact very limited. Nowadays they can only solve algorithmic problems, both linear and sequential. Their main ability is to carry out calculations hundreds of times faster than humans and, therefore, to save us time. Modern computers are not capable of self-learning or finding solutions that a person wouldn’t find. That said, their possibilities are limited. However, that could change quickly as we proceed with the development of quantum computers.

Let’s skip diving into quantum mechanics and trying to explain how a quantum processor works. We can instead go through a simple example that shows why a quantum computer is better than a usual one.

Traditional computers are able to process information linearly according to a given algorithm, step by step. A quantum computer is capable of processing information all at the same time.

Imagine that you have a Russian doll, and your computer has to uncover it until it reaches the very last one. To proceed with the task, a traditional computer would open each doll one by one, until it gets to the smallest one in the toy. A quantum computer would take out all the Russian dolls at the same time and compare them. If you make both computers put the dolls together again, the traditional computer would assemble them step by step, but a quantum computer would not only build the toy again, but would provide you with possible combinations as well.

Of course, this example is quite simple, but it demonstrates how a quantum computer works and how fast it could be in comparison to a traditional one.

The quantum computer could provide unlimited opportunities for new discoveries. Its use will change the internet and the entire financial system, as modern encryption systems and security protocols are likely to become useless. Calculations that could take many years to accomplish will be performed in seconds. For instance, to get the first photo of a black hole in history the best scientists in the world used the most powerful supercomputers and processed the data for about two years. The quantum computer could cope with this task in just a minute.

How can a quantum computer help us make a new technological breakthrough? In fact, we need it in every area where complex calculations are required: big data, AI, machine learning, neurosciences, bionics, cybernetics, medicine, biotechnology, chemistry, renewable and green energy, logistics, architecture and modelling, space, VR, AR and, of course, blockchain.

Quantum computer in modern finance

Researchers from Cisco Systems predicted that a fully-fledged operational quantum computer will appear approximately between 2024 and 2026. According to the experts, it will be comparable to the human brain in terms of its capacities.

A 50-qubit quantum computer is able to operate simultaneously with a quadrillion (10^15) operations, easily managing operations that are incredibly difficult for the most powerful modern supercomputers.

Google’s 53-qubit quantum computer was amazingly efficient with an operation that would take over 10,000 years for the world's most powerful supercomputer, IBM Summit, to solve. The calculation was made in just 3 minutes and 20 seconds.

IBM Summit consists of 4,608 computing servers, each equipped with 22-core IBM Power9 processors. In addition, it has more than 10 petabytes of memory.

Performing the same operation on a Google Cloud server would take 50 trillions of hours, or 5.7 billion years.

In early 2019, IBM introduced a commercial 20-qubit quantum computer. Google is already working on a 72-qubit processor.

It is worth noting that we have not yet created fully-fledged processors capable of solving all the mysteries of the universe. What we have seen so far is just an unstable prototype that can deal with one specific task. Still, even in the current state it is the most powerful computing device in the world. Refining it and making it work on a global scale is just a matter of time.

The crypto community suggests that the mass adoption of a quantum computer will eliminate both blockchain and cryptocurrencies, along with the entire security system of financial markets, banking etc. However, it is a bit early to worry about that. Let’s see why:

1. Only the largest corporations are able to create and develop quantum computers, as they are very expensive, and the process is time-consuming. Hackers or other scammers are unable to make a homemade quantum computer nor to overtake a corporation in the technology race.

2. Corporations are unlikely to ruin themselves by trying to take over the entire tech world by using a quantum computer. The first thing they are likely to do is develop new security systems in order to protect themselves and, of course, share them with the government. In the digital age, creating a device which is much more powerful than all the supercomputers in the world is equivalent to creating a nuclear bomb.

3. All key IT systems, including military, financial, government, banking and others, will be the first in line to be protected from the hacking threats posed by quantum computers. Later the entire IT industry will gradually adopt similar security systems.

4. It is possible that corporations will build data centres based on quantum computers and offer their computing powers as a paid service. Therefore, at the early stages of a new technological breakthrough there will be no option other than to use a quantum computer rented from a particular corporation.

5. Personal quantum computers, comparable in usability to modern PCs, will appear much later. By the most modest estimations, this is unlikely to happen until the 2030s. When they become available to any user, the whole world will already be protected from the threats of their misuse. Therefore, at that point we should not expect the unexpected. Humanity will just gradually move to a new stage of development.

Quantum computers could have a great impact on blockchain and cryptocurrencies. However, the crypto community itself is rapidly evolving and improving the infrastructure. Quantum computers will only make cryptocurrencies better, faster and more convenient for day-to-day implementation. For instance, transactions in the Bitcoin network could be processed in a few seconds instead of 10 or more minutes, or even hours, as it is happening now.

Moreover, the current financial model will not be convenient anymore. If it disappears, the transition to the use of digital currencies is likely to happen. Traditional computers are not capable of processing huge amounts of transactions made by billions of people every second, but quantum computers could easily cope with this task. The main thing is that the traditional financial system will inevitably transform into something more convenient or simply collapse.

In 2018, the development of IT as we know it practically stopped. We do have new products and new services, but they mostly represent updates and adaptations of what we already know. Moreover, the tech area is dominated by Apple, Google, Microsoft or Amazon, with no new players on the court. A collapse of the stock market and an upcoming financial crisis could stop this runaway growth and give rise to the development of new companies. In human history we have already had dozens of such examples.

How soon will a new financial crisis happen? The experts have been waiting for it since 2018. Let's try to reveal the possible date in the next part of the article.

Therefore, to sum up, a new technological breakthrough will begin with the adoption of a new powerful computer. The technology itself already exists, but it lacks more efficient and complicated stuffing. The development of a stable quantum computer, in this case, will allow us to make a powerful technological leap.

Like to share your thoughts and ideas about crypto and trading? You could join us as an external author. Email us on [email protected] to find out how you could become a Currency.com contributor.
Subscribe to Currency.com news
iMac Image
The most beautiful trading app
google play storeapple store
iPhone Image
iPhone Image