According to The Lancet, by 2064 earth’s human population will reach a maximum from where it will then begin to decline. Various estimates have predicted this event occurring at some time between 2050 and 2100. Whatever the precise timing, it appears almost certain that we are heading toward “peak-human”.
But what exactly does reaching peak-human mean for a world economy that has been driven in large measure by growth created by an expanding population? Of course, along with a growing population, technological shifts that have enabled increases in per-capita consumption have also contributed to economic expansion. But eventually, a declining population may counteract these per-capita effects and cause a decline in overall growth.
Will gold be as valuable when less people want it as a store of value? Will agricultural land inflate in value as it has over hundreds of years, when there are fewer mouths to feed and technological innovation increases output per acre? Are we headed toward long term economic contraction? And if so, how could we deliver economic growth after we reach peak-human?
One popular answer to that last question seems to be to create human settlements on other planets and moons and build a multi-planetary civilization in which population grows over the long term. Even if this were possible, settlements beyond earth are not likely to reach population levels that would make a meaningful difference to the overall human pool for hundreds of years. It is most certainly not a timely solution to a problem we may encounter as soon as 2064.
Another approach to counteract a shrinking population might be to rapidly accelerate per capita consumption. But the consumption of what?
Take energy as an example. The products we now build are getting more and more energy efficient. We are likely to have abundant energy available to us both by being further along on the logarithmic cost curves in technologies such as solar, as well as due to breakthroughs such as fusion and incremental advancements such as geothermal. Take food as another example. We certainly can’t – or shouldn’t! – eat 10 times the calories we need. Take transportation. There is no real point in every family owning six cars in an age when autonomous transportation, unmanned aerial vehicles and other intelligent logistics systems are likely to reduce the need for automotive ownership.
So, what exactly will we consume at such magnitude that per-capita consumption not only counteracts the effect of a shrinking population, but becomes the sole economic driver? Goods that fill this need must capture human demand without harming the planet, and allow an almost infinite amount of consumption per capita. The advent and large scale adoption of such goods could continue to enable economic growth in a world with a declining or stagnant population.
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One example of a formless, infinitely varied class of goods are virtual, digital artifacts that are represented only as data. These goods can be created in any quantity, solely by converting energy into unique, one-of-a-kind tokens that impart ownership. These tokens can represent ideas, discoveries, art, music, and in fact, entire collections of such goods. They can allow individual, exclusive ownership, easy transferability, efficient storage and demand no maintenance. That last point is important, because it means the total cost of ownership in accumulating vast numbers of tokens is very low compared to physical goods and possessions. But why would people want vast quantities of such tokens? Book collectors can never have enough books. They will pay more for first editions and copies signed by the author. Art appreciates. Patents have value even when they aren’t reduced to practice. Tokens can be issued for things as mundane as comics and baseball cards, to tokenized real estate in deep space! There are few limits.
For readers who are avid computer gamers, or those familiar with NFTs (non-fungible tokens), this may not be an alien idea. Both of these communities know full well how valuable virtual goods can be. Most others, though, still look at virtual goods and the high prices they can command as an oddity, a silly indulgence, or a tulip mania that is sure to implode soon enough. And perhaps they are right in specific instances. For example, a particular game may fall out of favor and hence virtual goods associated with it deflate in value. But in general, “idea tokens” are here to stay.
Today, the most viable way to represent an idea as a unique, non-replicable virtual asset is as an NFT; a cryptographically secure, unalterable entry in a decentralized, virtually unhackable global ledger documenting a full chain of custody and ultimate ownership.
We can’t make our home ten times bigger without felling more trees and harming the environment. We can’t secure more gold and diamonds without indulging in toxic mining processes. We can’t shift the population to exotic, expensive diets as it will result in hard environmental and ethical costs. But we can convert abundant energy into assets without impacting anything at all in the physical world. We can enable the accumulation of these assets and we can ascribe value to them just as we ascribe value to anything else; by wanting them.
Cryptographically secure tokens such as NFTs aren’t just a phase or a fashion. They are essential to sustainable economic growth in the future. They are the future of the global economy, and it’s time we see them as such.