Information Hyperinflation

The Economist recently published this chart.

Source: Economist, 2011

That reminded me strongly about a chart depicting the hyperinflation in the Weimar Republic in the 20ties of the last century. Shortly before converting the currency it was in the million percent range. Okay we’re in terms of digital data creation only in range of a 60% yearly increase. At this pace we’ll soon be in the >100% range.

Source: Financial Times 2001

Hyperinflation describes a rapid and sustained price increase. Say an item costing 1$ on January first with a monthly inflation rate of 50% will cost $130 next January. Hyperinflation basically destroys the monetary value of your belongings.

The same is today happening with information. At the hyperinflationary pace new data is created and replicated the actual value of a piece of information gets destroyed.

Social media tools such as Twitter, Facebook, Google+ and many others are prime guarantors of a continued acceleration of data creation and duplication. How many links in your streams have you seen twice, three times and more as tweets, retweets, and retweets of retweets. Once would be enough.

It adds incremental value only to see a post four times. May be it is really a valuable post I really should read. And that link points to some interesting read, because so many of my friends retweet (only few do more than simply retweet) it. Yet a symbol indicating its popularity included in the tweet would be enough.

Now though I have to skim through a lot of clutter. It becomes increasingly impossible, to find a nugget of valuable information in a sea of nonsense.

In the money world there is a simple recipe to stop the frenzy: Change the currency. They did that in the Weimar Republic introducing a new currency called Rentenmark backed by real assets such as mortgaged land and industrial goods (there was no enough Gold available to back to the currency).

This solution is not available in the digital realm. You can’t simply introduce a new digital information standard to stop this replication frenzy. We all simply will continue to post pictures, tweets, Google+’s and more… The problem is here to stay.

Or is it?

Much of what is posted is noise. To get the signal-to-noise ratio again down to acceptable levels we’re in need of a new paradigm digital noise reduction.

More on that in a later post.