Crypto and AI are opposites that attract
Each day, Coinrule will run through the state of the digital assets market for Blockbeat, your home for news, analysis, opinion and commentary on blockchain and digital assets
Last week Open AI introduced Sora – their text-to-video model – that creates realistic videos from a simple prompt. Open AI CEO, Sam Altman, also expressed his desire to raise an eye-watering $7 trillion, or 3.5x the current total crypto market cap, to fuel chip design and manufacturing to cater for increasing adoption of artificial intelligence (AI). The scale of this investment has inspired market participants to think in more exponential terms, akin to how crypto moves itself. Additionally, how big the crypto AI market could potentially grow. The prices of AI coins over the past few days reflect this trend. However, according to CoinGecko, AI tokens currently still only have a total market cap of around $16 billion – less than 1% of the total crypto market cap. Comparatively, Meme tokens stand at $23 billion.
Crypto and AI are two of the most hyped technologies of the past 5 years. With increasing adoption of both, it makes sense they would intersect. However, back in 2018, Peter Thiel stated “Crypto is libertarian, AI is communism.” Ali Yahya, a general partner at a16z Crypto, also suggested the two technologies fundamentally oppose each other. Crypto facilitates decentralisation. Meanwhile, AI enables and thrives within centralisation. One could argue both crypto and AI facilitate accessibility. DeFi connects users to financial products and AI chatbots provide users with intelligence. However, users of the former have experienced inherent biases baked into models and, therefore, the results due to AI’s centralised nature.
Crypto incentivises participation and behaviours through financial rewards. Crypto’s incentivisation structure can foster decentralisation in AI, ensuring the presence of balanced and relevant sources of data. Bittensor – a blockchain aiming to incentivise the creation of decentralised AI models – intends to contribute to this. Bittensor aims to achieve this by building a network of machine intelligence. These networks will be able to communicate and share information, whilst assessing the value of other network participants and ranking them accordingly. Participants are incentivised to rank honestly and a digital ledger is used to record the rankings. The ultimate aim is to enable an all-encompassing decentralised intelligence to rival traditional model providers.
Crypto being the ultimate playground of experimentation and game theory, it only makes sense that AI should evolve within it. The fundamental ethos of decentralisation also brings an element currently missing from AI due to the lack of incentivisation structure. They say opposites attract, with crypto and AI potentially being a match made in heaven.