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Business News/ Opinion / Columns/  It’s actually been a great year for big advances in technology

It’s actually been a great year for big advances in technology

All the numbers point to one of the worst years for the tech sector in over a decade

Not only did customers of outfits like brokers FTX and Voyager, and stablecoin TerraUSD/Luna get taken to cleaners, the currency at the bubble’s heart, Bitcoin, lost around two-thirds of its value. (Getty Images)

All the numbers point to one of the worst years for the tech sector in over a decade. Stock meltdowns, crypto implosions, supply-chain disruptions, a funding freeze, and yet more hacks made 2022 a year most would rather forget. Yet a range of major developments emerged that set the scene for a rosier future.

By end 2022, the tech-heavy Nasdaq will have put in one of its biggest annual declines in at least 14 years. Other indices did better, but still ensured investors racked up their heaviest losses in over a decade. The biggest victim were of course crypto punters. Not only did customers of outfits like brokers FTX and Voyager, and stablecoin TerraUSD/Luna get taken to cleaners, the currency at the bubble’s heart, Bitcoin, lost around two-thirds of its value. This turmoil, led by rising interest rates, a slowing global economy and post-covid hangovers, hit tech companies, be it big names like Google and Facebook to startups which may not survive another year.

There’s some positive news, though, and here are a few examples.

Quantum security ahoy: At some point in the next few decades, a new paradigm in computing will become viable. Instead of doing calculations in binary units (bits), systems will use quantum bits (qubits). Computer scientists speak of the possibility of more powerful and efficient machines. Security researchers are worried, however, because it means that cryptographic data safety could be broken. Passwords might be decrypted by a quantum computer. In July, the US National Institute of Standards and Technology finally released four algorithms “that are designed to withstand the assault of a future quantum computer." Without such safeguards, we would have lacked the assurance that today’s systems will be secure tomorrow. Now we can go boldly forth into the quantum unknown.

AI as an arty buddy: A number of artificial intelligence (AI) systems hit the headlines in 2022 for their eerie ability to seem human. Writing tools like ChatGPT can answer questions, craft poetry and also write code. DALL-E does the same for images, as do a handful of others. It’s okay to be both excited and scared by this development. When a university student admits to using such technology to write essays, and artists note that these bots are built on the foundation of stolen work, then humanity has every reason to be worried. But you can’t stop progress, so the challenge ahead will be how to guide AI toward uses that help us and away from those that could hurt even a tiny fraction of the population.

Crypto’s underlying blockchain value: For all the gloating by crypto bears about the sector’s reckoning in 2022, we ought not to forget that thousands of people lost tonnes of money and the victims are too numerous to count. Yet, there’s uncanny similarities to the dotcom bust two decades ago that paved the way for a real phase of innovation, which truly improved the lives of billions around the world. There’s a good chance this latest crash will result in entrepreneurs focusing on businesses that have practical value beyond cartoon apes and pump-and-dump schemes. And if we’re really lucky, venture capitalists will stop funding crypto frauds and turn towards worthwhile projects.

Lessons from Musk’s Twitter torching: The blue bird isn’t dead. It probably has a few years left in it. But the takeover and teardown of this social media service has turned attention to a handful of alternatives which may end up becoming friendlier, more tolerant platforms for sharing information and opinions. That would be a good outcome.

America’s chips act: The passage of a $53 billion corporate welfare package aimed at luring chip-makers is akin to the moon shot that Washington launched 60 years ago. A lot of money will be wasted, many failures experienced, and the US probably still won’t catch up with Taiwan in semiconductors. But the dream, given momentum by Taiwan Semiconductor Manufacturing Company’s own investments in Arizona, will help the nation which invented chips regain some of its former glory.

Decentralized production: After years relying on one country for the majority of its devices, the world finds itself at the point where a combination of covid upheavals, supply disruptions and geopolitical tensions have forced a big rethink of manufacturing locations. Apple is finally taking alternative locales seriously, and we’ll see a greater proportion of its products made in places like India, Vietnam, Europe and possibly North America. More companies, spanning industries from electronics to automobiles, will mix up their sources of production. The point of diversification is not to hurt China, but to make supply chains more resilient.

It’s easy to look back at 2022 and feel a bit glum. The salad days may be over, but a period of true advancement is now baked into the future of tech.

Tim Culpan is a Bloomberg Opinion columnist covering technology in Asia.

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