Original title: This is the AI x Crypto Cycle
Original author: David Hoffman, Bankless
Original compilation: Kate, MarsBit
AI x Crypto is real. The fundamentals are there, and so is the speculation.
Every bull market cycle is defined by the mania it breeds.
• 2013 is the era of “proof-of-work forks and fair releases”
• 2017 is the year for ICOs
• 2021 is the NFT bubble
I now call it:
The 2024 cycle will be called the AI x Crypto cycle.
Both parallel industries were driven by huge potential energy, and a huge bubble was created during the collision.
Dollars flowing into Bitcoin ETFs are like jet fuel into a rocket ship that will soon push capital downstream toward riskier crypto markets. Soon, probably in May or November, the ETH ETF will be approved and further capital flows will be injected into the blue chips of the crypto market, giving people the ammunition to start looking for low 100x market caps, which is the tradition of every bull market.
Meanwhile, Nvidias $2.2 trillion market capitalization has almost single-handedly achieved this narrative growth in the trading stock market. Technology giants such as Google and Microsoft are promoting Web2 to capture the zeitgeist of artificial intelligence and change the future of the technology market. Beyond this, Silicon Valley continues to invest the vast majority of startup capital in artificial intelligence.
The era of artificial intelligence has arrived.
Theres just one problem. AI without encryption is a massively centralized phenomenon, with Web2 companies and their leaders controlling all the wealth and power that comes with AI. AI thinkers and philosophers have been touting the problem long before it entered the public consciousness, and now the problems with the concentration of wealth and power AI brings are surfacing.
A famous quote from Peter Thiel:
“Crypto is decentralized, AI is centralized. Or, if you want to frame it more ideologically, crypto is libertarian and AI is communist.”
Cryptocurrency and artificial intelligence are at opposite ends of the spectrum, but they are not opposing forces. They are better together, and together they will create a whole that is greater than the sum of its parts. AI needs encryption to avoid creating a centralized dystopian oligarchic hell, and encryption needs all the utility and power of AI!
Bankless: Interpreting the AI crypto investor narrative on Bankless
Artificial intelligence in crypto seems poised to break this cycle, but why?
Decentralized artificial intelligence
I think we will hear the term decentralized artificial intelligence a lot in 2024. This very simple meme packs a lot of information and meaning into a very simple phrase, artificial intelligence, but for people.
Centralized Web2 AI has a huge monopoly on data and computing. They will devote all their resources to the development of artificial intelligence models to produce the most versatile and powerful models possible. They will stifle competition and limit innovation. They will engage in regulatory capture and do whatever they can to strengthen their positions. They will make a very small number of people very rich and powerful, and they will become our new overlords.
https://x.com/TrustlessState/status/1762318512507208182?s=20
Im listening to Casey Curasos talk at the ETH Denver AGI Summit:
“We all want open source AI and the widespread proliferation of customized models suitable for various uses, but the driving force behind economies of scale in AI models is very powerful. Data monopolies and computing monopolies limit the development of open AI models.”
The idea here is that we are interested in a broad range of AI models – all of them: models for music, movies, art, personal assistance, trading algorithms, recommendations and curation…
As humans, we want to have as many AI models as blogs and websites. By democratizing AI models, human creativity, expression, and value creation will flourish.
But due to centralized artificial intelligence, we cannot do this.
We need decentralized artificial intelligence.
https://x.com/anna_kazlauskas/status/1764675698310926459?s=20
decentralized computing
The AI x Crypto narrative begins with the decentralized computing layer—the lowest layer of the AI x Crypto technology stack.
Decentralized computing has long been a crypto space – there’s nothing new here. The only thing new is the massive price swings these platforms have seen since the rise of the AI investment cycle. The bids behind the decentralized computing platform are getting higher as Nvidia adds billions to its market value and OpenAI launches new artificial intelligence products that redefine society.
• Filecoin - 100% up in 30 days
• Arweave – up 200% in 30 days
• Render - up 300% in 3 months
• Bittensor – up 1250% in 5 months
These are just four platforms I picked from the crowd. Hundreds more companies with varying levels of quality have taken significant action over the past few months.
Some of these platforms have real fundamentals. Some of them are actually experiencing growth due to the rise of the AI industry.
But overall, their price action is entirely speculative, based either on a view of future AI industry adoption or a view of greater fools in the future.
In my opinion, its the latter.
AI Meme Coin
Worldcoin is a very real project with a very real founder, a real team, a real vision, and its current valuation is a very unreal $63 billion, which can only be achieved by people trying to get their hands on artificial intelligence. Explain that they are using WLD to do this.
This is what cryptocurrencies offer the AI industry: tokens and liquidity.
AI Meme Coin Lessons on Bankless Narrative Investing
Setting guidelines for this bull market is necessary
Our industry is made up of fast-moving, radical innovators who are pushing the limits of what technology can do.
We ask, Why not? and we ask for forgiveness.
The pace of regulation and public market bureaucracy is unsatisfactory and restrictive. As Crypto x AI, we won’t wait for the old guard and those in power to catch up with us, we will surpass them and create a better future.
But until all AI builders learn to use cryptocurrencies, we will be first hit by the waves of AI meme coins that will be able to overtake them.
The overlap between AI and Crypto is real - its just going to be preempted by outright vaporware and shitcoinery.
This is the desired sequence of operations.
It is much easier to issue and sell an AI meme coin than to build a real project. Real Crypto x AI projects will take at least a few years to build, and we dont have that much time in the crypto bull market, which lasts 12-18 months at most.
https://x.com/MikeIppolito_/status/1762262716671021465?s=20
AI tokens are the shiny new thing.
What makes AI tokens bullish is that buying them requires no brainpower at all. Upcoming retail investors just need to find some AI-related stocks, watch a youtube video on them, and press the buy button.
This is what we call the left side of the curve, which is why CorgiAI is investing in the top 100 coins.
The first page of the CorgiAI “white paper” is everything you need to know.
This is stupid. Its not going anywhere. Its cute and fun. This is what happens when the masses get the financial asset printing press: ERC 20 tokens.
This is a passage from Jacob of Zora that I like:
https://x.com/js_horne/status/1764765731797729610?s=20
In the meantime, check out what I discovered on my timeline: real innovation using Crypto x AI!
https://x.com/js_horne/status/1765110257359954367?s=20
What happens next?
Welcome to the next 18 months of your life.
AI x Crypto is real. The fundamentals are there. And signals surrounding fundamentals will be completely overwhelmed by the next wave of crypto speculative degradation.
Crypto projects will find ways to make themselves Crypto x AI projects, and then their coins will rise as a result.
Then everything will come crashing down.
Then well rebuild it on a better basis than before.
This is tradition.
