A tweet this week from Chris Frantz, the founder of the Loops messaging platform, irritated me.
Frantz said “90% of the people I know in web3 have pivoted their business to AI.”
What struck me was not that founders are so obsessed with securing venture capital that they’re looking to the next “in” thing. (Let’s save this issue of Silicon Valley fickleness for another time.) It’s that people are seeing the various elements of the complex new digital economy forming around us – artificial intelligence, blockchain, the metaverse , programmable money, digital identity, cryptographic evidence, quantum computing, IoT and so on – as untied and exchangeable coins, while they are truly intertwined and complementary.
you read Money reinvented, a weekly look at the technological, economic and social events and trends that are redefining our relationship with money and transforming the global financial system. Subscribe to receive the full newsletter here.
The AI will need Web3, and vice versa. Why not build both?
I see this harmful and reductionist simplification of “Web3”, “blockchain” and “crypto” resulting from a fundamental failure to identify the central and unifying characteristic of all projects that fall under these labels. The common thread for me is that they all use a new distributed record keeping system and incentives to deal with the fundamental problem of human trust around information. These technologies help communities of distrustful strangers collectively maintain open data records that allow them to distribute and share valuable (or sensitive) information among themselves without intermediaries.
By addressing how to secure valuable information in a decentralized environment, Web3, crypto and blockchain address a societal challenge that has been with us since the beginning of the internet. But, now, in the age of AI, when uncertainty over information will become stratospheric, it’s an even more pressing question.
So why don’t people – whether they be founders jumping from one fad to another or policy makers who think crypto is only for money laundering – understand the overall importance of this new data architecture?
At the risk of sacrilege, I think it goes back to the roots of cryptocurrency, with the founding of Bitcoin.
At the time, the message should have been about information, about data sharing, about privacy – in essence, the main concerns of the cypherpunks whose mailing list Satoshi Nakamoto used to unveil the book. white Bitcoin in October 2008.
Now, I don’t really blame Satoshi here. The founder was simply offering one of the many informational solutions that cypherpunks had been mulling over for years: a crypto-based digital currency. Satoshi knew that although money is special in terms of its fundamental importance to society, it is really just another form of information.
Money is not a thing. It is a standardized and commonly accepted symbolic representation of value. It is a particular type of information which, because it is highly valued, requires an elaborate and institutionalized system to inspire confidence that people and entities will not abuse it. But it is far from the only type of information that has value and which, by extension, requires institutional coordination. This is why Bitcoin was, for me, a prototype for a much bigger idea.
There were, of course, many early adopters of Bitcoin, including Ethereum founder Vitalik Buterin who got it. They recognized that this decentralized data architecture could be applied to the myriad of issues we face in sharing valuable information in the digital age.
The problem was that in the eyes of the general public, as well as those of regulators who wanted to drive that strange square peg into the round hole of traditional finance, cryptocurrencies and blockchains were purely monetary.
This misunderstanding has set us back, perpetuating a Web2 structure of harmful data manipulation by giant Internet platforms that have sown distrust in our information systems and our democracy. Had a broader understanding of the potential existed, this industry would have more easily overcome its inherent challenges of scale, legislation, and privacy. Perhaps there would have been less instinct towards scams and “raise the numbers” chip casinos, and more willingness to find meaningful solutions to the world’s problems.
But now? Now, in the age of artificial intelligence, this misunderstanding becomes downright dangerous.
Please don’t accuse me of naively waving “blockchain solves this problem”. The challenges of AI at the moment are daunting, from copyright protection in large language model (LLM) inputs, to avoiding racial bias in their outputs, to the favored “liar’s dividend” by our current inability to distinguish between real content and AI. created fabrications. There is no easy way to save humanity from the machines. Whatever solution arises, it will inevitably rely on a wide range of technologies and policies.
Here’s what I know: We’re not going to solve these problems with a stack of outdated 20th century regulatory technologies. We need a decentralized governance system for how we produce, verify and share information in this new era.
How it can help
Whether or not they can, as currently designed, provide what is needed, blockchains have qualities that can help.
Immutable ledgers allow us to track the provenance of images and other content and therefore could protect us against deep forgery. The same goes for testing the integrity of the datasets on which machine learning AI products are trained. Cryptocurrencies could be used to pay people around the world, digitally without borders, for their contributions to AI training. Projects such as Bittensor create tokenized blockchain government communities that incentivize AI developers to create user-friendly models (addressing the concern that privately owned AI systems have an incentive to put shareholder profits before user rights).
There’s a long way to go before these ideas can deliver on that promise at the scale needed, if they ever do. In addition, success will require the integration of a range of other technologies – zero-knowledge proofs, homomorphic encryption, secure computing, digital identities and decentralized credentials, IoT – as well as smart, multi-party legislation that protects privacy, punishes bad behavior and encourages human-centered innovation.
But to position Web3, blockchain, crypto, or whatever you want to call it, as a has-been with no place in the emerging digital future is to misunderstand the problem at hand.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.