AI and crypto

March 2023

On first blush, AI and crypto are separate tracks. In some ways, they’re competing for mindshare, talent, and capital.

Structurally, too, some say they’re opposed. In Peter Thiel’s words: “crypto is decentralising, AI is centralising.”

Developing AI models requires aggregating training data from different sources - typically a centralising exercise. There’s a strong pull towards concentrating power.

Crypto decentralises power out to the edges. Data is open and owned by users, protocols are owned and governed by the community, and anyone can use the system permissionlessly without gatekeepers.

But actually AI and crypto are complementary. AI’s ascendency makes crypto even more important. They’re “two sides of the same coin.”

As AI centralises power, crypto will be a critical counterweight, empowering everyone with sovereignty over their assets and the right to privacy.

The only way to do this is through cryptography because it puts power back in the hands of individuals. Freedom is the best defence against abuses of authority. Like Balaji says: “No cryptography, no sovereignty.”

Another Balaji-ism is that AI and crypto disrupt different parts of the content value chain: AI decentralises creation and crypto decentralises monetisation.

Equipped with AI tools, anyone can create content. Creative barriers to entry are floored. Producing content - original or remixes - is effortlessly easy. We’re moving from a world where only a sliver of the population are content producers, dominated by legacy media and “influencers,” to one where everyone is.

With crypto, creators can monetise their work directly through tokenisation. No more pledging their content for free, counting on ad dollars or brand deals. NFTs enable creators to own their work and sell ownership rights to their audience.

As content production and replication become trivial, we’ll see an explosion in volume. It’ll get increasingly difficult to discern what’s “true” from what’s fake.

Crypto offers the solution. Blockchains deliver verifiable authenticity and provenance. When data is stored on-chain, it’s provable.

Blockchains will be the source of truth in a world where it’s impossible to determine what’s real at face value.

In the same way that we check for the padlock in our URL bar to ensure a secure connection, we’ll be looking for a cryptographic signature to confirm that content is what it purports to be.

Crypto and AI have an entangled future.