As artificial intelligence continues to grow to new heights of popularity, industry players are considering new ways the technology could integrate with crypto and blockchains.
During Coinbase’s State of Crypto Summit on Thursday, venture capitalists and AI experts shared their thoughts on the similarities and differences between the industries and how investors, builders and users can capitalize on it.
Digital ownership
One of the crypto spaces’ ethos is the idea of owning your assets, data and identity, as opposed to giving it away to sites like Facebook and Instagram. But the need for owning your own data is applicable not just in the web3 space, but in AI, too, said Fred Wilson, co-founder of Union Square Ventures.
In the future, users who employ AI tools are going to want to control their own data and determine what models can and can’t train themselves with their information. “Users are going to need agency over data and increasingly the way they want it [shared across] assets,” he said.
That issue with data in AI applications could be a fit for blockchain technologies that are already built to support data privacy, transparency and auditability throughout the ecosystem, Chris Meserole, director of artificial intelligence and emerging technology initiative at The Brookings Institute, said.
Blockchains can verify information provided by users, but those users could retain control over it and determine how it’s used. Blockchains are also publicly available, making them transparent and smart contracts are auditable and open for anyone to see. For companies concerned about data leaks into AI models, this could be a more attractive option.
This could be applied to areas like healthcare and financial information because people have a lot of concern about their data being used. So crypto could potentially provide value and give “people the confidence in being able to transact with AI,” without giving away personal details directly, Wilson said.
The nature of technology is constantly changing, and in order to keep up with the evolution, there needs to be smarter ways to innovate. While some are arguably hesitant of the crypto or AI industry — or both — there’s potential for the two industries to band together and gain more adoption through thoughtful use cases that revamp the way our data is used and stored.
A growing relationship
In the past, the web3 and AI industries each independently enjoyed “hype cycles” that built up attention and capital that later dispersed. Now we’re in a “full AI hype cycle” and in a “bear market, downturn [and] disappointment phase for web3,” Wilson said.
But as the industries see alternating cycles, there’s an intersection where the two meet — and the panelists said they think that the overlap is only growing over time. “Web3 sector has a bit of a bad name with a lot of people because we haven’t built stuff that changes their mind,” Wilson said.
And it’s a fair critique, as many mainstream audiences have yet to see value in web3 products and services. Some have become crypto enthusiasts buying cryptocurrencies like bitcoin and ether, while others saw value in buying digital collectibles. But overall, the industry has largely failed at bringing mainstream use cases to life, Wilson said.
The ‘AI arms race’ is about more than who will lead the industry
“AI has gone through hype cycles and didn’t work and didn’t work and has now graduated to the point it’s built in so many applications people have accepted it and that’s what web3 needs to do,” Wilson said. “I personally think [that turning point] will happen with web3 in the next five to 10 years and be in the water everywhere.”
The “tremendous opportunity”
But even if AI has managed to skate ahead of web3 when it comes to mass-adoption and consumer enthusiasm, the two technologies are running straight into one another, at least in the minds of the panelists assembled.
A lot of innovation on the AI side is going to be “intimately related to crypto and vice versa,” Meserole said. “There’s tremendous opportunity out there for the application side and policy side. [But] we should be levelheaded about where AI and crypto is and know it will come back in a short order.”
Some blockchains, like Solana, have integrated ChatGPT plug-ins with their network to help users interact with their chains. The Solana Foundation also launched an AI accelerator program and upped its AI-focused grant program for projects from $1 million in late April to $10 million in late May.
“Those two technologies are going to increasingly intertwine and intersect with each other,” said Chris Lehane, chief strategy officer at crypto-focused firm Haun Ventures. “It’s critical we think strategically about their relationship.”
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