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Exploring ARK’s 2024 Big Ideas: AI & Fintech Future

Report | Feb 1, 2024

Ark Invest Big Ideas 2024 - Exploring ARK's 2024 Big Ideas: AI & Fintech Future

ARK Invest's "Big Ideas 2024" report outlines ambitious expectations for the evolution of key technologies by 2030 and their potential impacts by 2040.

While the 163 page PDF report covers a plethora of innovations and emerging and converging technologies, this article will look at specific projections providing a roadmap for how innovations in public blockchains, digital wallets, smart contracts, and artificial intelligence (AI) could transform industries and economies over the next decades.

Public Blockchains and Cryptocurrencies Are The Foundation of a New Financial Ecosystem

Public blockchains are set to redefine financial ecosystems by facilitating the migration of all money and contracts onto platforms that ensure digital scarcity and proof of ownership. This shift anticipates a significant reconfiguration of financial systems to accommodate cryptocurrencies and smart contracts, marking a transition towards a digital-first economy.

By 2030: Cryptocurrencies are anticipated to account for about 10% of the global money supply, driven by institutional and high net worth individual investments, nation-state treasuries, and adoption in emerging markets for remittances and global settlements. Cryptocurrencies, particularly Bitcoin, are expected to continue displacing gold as a store of value, capturing 40% of the market​​.  With a projected market value scaling to $5.2 trillion by 2030 for decentralized applications, the economic impact and investment opportunities within this domain are vast and ripe for exploration by fintech innovators and investors alike​​​​.

See:  Blockchain Private Credit Grew 55% in 2023

By 2040: Cryptocurrencies could largely replace permission-based, centrally controlled monetary systems, reformulating financial ecosystems around digital assets that facilitate transaction flows without counterparty risk. This transformation could begin at the fringes of the financial system, particularly in geographies with inefficient banking systems, and gradually extend to developed markets​​.

Digital Wallets Are Revolutionizing Payment Ecosystems

By 2030: Digital wallets are likely to become primary financial interfaces for the majority of smartphone users, facilitating more than half of all meaningful financial functions. These platforms are projected to disrupt traditional banking relationships by offering wholesale pricing of financial services and becoming pivotal in e-commerce and other digital services​​​​.

By 2040:  Digital wallets are projected to close the loop with two-sided networks, offering a suite of financial services tailored to the needs of specific industries. They could enable fully closed payment ecosystems, with platforms like Block, Shopify, and Toast potentially leveraging digital wallets to facilitate transactions and monetize deposits​​. Vertical software platforms serving merchants with financial services through digital wallets are expected to disintermediate merchant banking, significantly enhancing convenience and reducing the number of steps from payment authorization to merchant settlement​​.

Smart Contracts Will Automate the Future of Finance

Smart contracts present an automated, global, and auditable alternative to traditional financial intermediaries, offering a transparent and efficient way to manage contracts and transactions on the blockchain.

See:  Blockchain Smart Bonds

By 2030:  Smart contracts are projected to secure less than 5% of global financial assets by GDP through decentralized protocols, a rate consistent with the early adoption curve of the internet. These protocols, along with application protocols, are expected to significantly reduce the fees extracted by traditional financial institutions, fostering a more efficient and transparent financial ecosystem​​​​.

By 2040:  Most contracts might migrate to open-source protocols that enable and verify digital scarcity and proof of ownership, diminishing the role of traditional financial intermediaries. This shift could lead to more transparent risk-sharing arrangements, easier asset securitization, and a substantial decrease in counterparty risks​​​​.

AI Innovation Is Surging (Today)

AI technology has rapidly evolved, transitioning from simple machine learning algorithms to complex neural networks capable of deep learning and reasoning. This evolution is marked by the development of models like GPT-3 and GPT-4, which have demonstrated capabilities close to human-level language understanding and generation. GPT-3, released by OpenAI, contains 175 billion parameters, making it one of the largest and most sophisticated language models ever created.

AI is already enhancing productivity across various sectors. Tools like GitHub Copilot and AI-driven analytics platforms are automating routine tasks, allowing humans to focus on more complex and creative endeavors. GitHub Copilot has been shown to improve programmer productivity by assisting in code generation and debugging, significantly reducing development time.

Achieving New Heights (2024-2030)

By 2030, AI is expected to dramatically increase the productivity of knowledge workers. As AI becomes more integrated into business processes, tasks that currently take hours will be accomplished in minutes.  ARK Invest predicts that knowledge worker productivity will quadruple leading to unprecedented growth in GDP and innovation, fostering new industries and reshaping existing ones.

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AI in healthcare is set to revolutionize diagnosis, treatment, and patient care by enabling precision medicine and reducing human error. Multiomic data analysis and AI-driven diagnostic tools will offer personalized treatment plans with higher efficacy. AI algorithms are already outperforming human radiologists in detecting certain types of cancer in imaging scans, promising more accurate and earlier diagnoses.

The World Will Be Transformed by AI (2030-2040)

By 2040, AI could become a universal personal assistant, deeply integrated into daily life. From managing schedules to making informed decisions on behalf of users, AI assistants will offer a level of personalization and efficiency previously unimaginable. The integration of AI in smart devices and home systems will make smart homes truly autonomous, adjusting to individual preferences for comfort, security, and energy efficiency without human input.

Future AI systems will not only optimize tasks but also engage in creative processes, contributing to art, literature, and science. AI-driven creativity tools could collaborate with humans to produce novel works and solve complex scientific problems.  AI-generated art and music are already blurring the lines between human and machine creativity, suggesting a future where AI partnerships could lead to new artistic movements and scientific breakthroughs.

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As AI becomes more pervasive, ethical considerations and governance will take center stage. The development of transparent, fair, and accountable AI systems will be critical to addressing concerns around privacy, bias, and autonomy. Ensuring AI systems make decisions in a way that aligns with human values and ethics requires ongoing research, regulation, and dialogue between technologists, policymakers, and the public.

Beyond 2040 AI Horizon

The concept of the singularity—where AI surpasses human intelligence in all aspects—remains a potent idea for the future. The path toward such an event will be marked by incremental advances, each expanding the boundary of what's possible with AI.  The journey toward superintelligent AI poses profound questions about identity, consciousness, and the future of humanity itself, inviting us to reimagine our place in a world where intelligence is no longer uniquely human.

Conclusion

By 2040, these technologies are expected to reshape not just industries and economies, but also the very fabric of daily life, presenting both unparalleled opportunities and challenges.


NCFA Jan 2018 resize - Exploring ARK's 2024 Big Ideas: AI & Fintech FutureThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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