What is Law of Accelerating Returns?
Let's find out Law of Accelerating Returns meaning, definition in crypto, what is Law of Accelerating Returns, and all other detailed facts.
The Law of Accelerating Returns is a concept proposed by Ray Kurzweil stating that the growth of evolutionary systems such as technology keeps accelerating over time and will finally reach a point where the progress is so fast that it will lead to a “rupture in the fabric of human history.”
The term ties to Kurzweil’s principles of technological singularity, which describes a change of pace in technological development. The tendencies of technological development feed on themselves until they break past the point of sustainability, leading to irreversible changes in humanity as a whole.
According to the law of accelerating returns, technological progress moves in steps that are referred to as “waves”. The waves follow a pattern of rapid, exponential growth which is followed by periods of the pace slowing down or stagnating altogether until the next shift.
The first wave of technological development started when humans invented fire and ended when the first cities were being built. The second wave was marked with the creation of writing and finished when the printing press was invented. We are currently living in the third wave, which started with the development of computers and biotechnology.
Kurzweil believes that the third wave of technological advancements will end roughly around 2045 when humans and machines will merge into one. It should be possible to project the linear trend of technological advancements up until the breaking point.
The law of accelerating returns shares similarities with Moore’s Law, proposed by Gordon Moore. The principles of this proposal state that computer power is set to double every two years and that humans are part of the process of exponential change. Moore’s law affects the areas of economic policy, education, and social organization, among others.
Both Kurzweil and Moore’s ideas are supported by futurists who believe that society is on the brink of a new paradigm shift that will lead to the development of computer power far beyond that of today.
The growth curves of today’s technological development are the outcome of a constant feedback loop between investment and innovation. As people put increasing sums of money into technological advancements, the more capable these technologies become of creating new technologies that are even more powerful.
The development of each new innovation then generates more investments, which allow for further innovations, which then lead to even greater payoffs, thus endlessly continuing the cycle. There are three key components to the law of accelerating returns: human capital, investment capital, and empowering technologies.