Decrypted Dispatches #2
Blockchain tech is dead, and AI is the new tech destined to win.
Blockchain tech is dead. You can find and feel that if you look at the latest stories from the crypto world. Most prominent personalities who ran big crypto exchanges and blockchain tech are in jail or facing trial for various financial crimes. Do Kwon, the founder of Terraform Labs, was charged by a US federal grand jury and Korean and Singapore law bodies with fraud, conspiracy, violating capital market law, etc.. Sam Bankman-Fried, the CEO of the big global crypto exchange FTX, is now facing at least 12 criminal charges. Then, the internet monkey picture thing called NFTs based on blockchain tech collapsed by around 97% in transaction volume from its peak in 2022. The DeFi world is plagued with many cyber attacks, and in 2020, hackers stole about 100 million from DeFi projects. Smart contract exploits, flash loan attacks, and rug pulls all happened in the last crypto bull run. DAOs still need to become functional organizations with output and revenue.
Blockchain Tech is an Overkill in well-regulated countries.
Nothing terrible happened with blockchain tech in the last decade other than progress. But it shifted its position in the hype cycle, which is true with any niche tech. But with Blockchain, there is something more than that. Even after a decade, there is no tangible product using blockchain tech that people can think they cannot live without. I can live without Bitcoin even though it is one of the revolutionary things that happened in the past decade. I do not do cross-border transactions with Bitcoin or any other cryptocurrencies because I find the latest fintech companies allow me to do that with fiat money almost instantaneously. I can blog post on Medium and get a revenue share rather than publish in Mirror.xyz and expect someone to mint that as NFT for revenue share. This indicates that the world still needs to be ready for blockchain tech. Especially in well-regulated Western countries, people do not think about the need for a more open financial system. People who invested in crypto in the West mostly did it as a speculative investment along with their other assets. Nobody in the West used crypto to meet their daily financial needs. For some, it was just experimental money to play with; for others, it was a speculative investment for their quick rich scheme.
Blockchain is not a tech; it is a movement.
Over the last decade, blockchain tech was exposed to its many technical limitations for real-world adoption — especially the ones related to the blockchain trilemma effect. Any decentralized network can only provide two of three benefits at any given time with respect to decentralization, security, and scalability. Most of these technical limitations are works in progress, as layer 2 and other tech like zero-knowledge proofs. Besides technical limitations, Blockchain has a severe problem that might prevent or delay its progress. This is the game theory aspect of blockchain tech or the tokenomics part of it. Like any social media algorithm on the internet is imperfect, tokenomics is complex to define. As long as blockchain networks cannot find the right way to do self-regulation, on-chain governance, and balance between scalability and decentralization without compromising security, it is hard to enable real-world use cases. Again, the world needs to be ready to embrace blockchain tech. Central Banks and nation-states will not promote a world based on such autonomous tech they cannot control. Maybe World War III might get us there sooner :)
AI is a fantastic new tech but not a movement.
AI is a terrific new tech way up in the hype cycle. Just like Bitcoin made Blockchain popular, ChatGPT made AI famous. AI can make our lives easy and take our jobs that can be performed more effectively. But AI lacks the same level of general intelligence, creativity, and social and emotional understanding humans possess. A simple example is if you give similar prompts to different AI systems like the one from Google and OpenAI, they will provide similar outputs. There is only one answer for AI systems. Imagine we use AI tech to identify the best stocks in the stock market. The stock market will no longer be speculative since everyone knows which stocks to buy. AI systems have added a powerful new tool for big tech companies to monopolize their internet business further. AI will not fix the internet, but it gives more power to the big tech companies that control it now.
Blockchain tech will be a whistleblower in an AI world.
Both the AI and Blockchain techs are here to stay. While AI has some great products already live, and user adoption is rising, it still needs to come down on the hype cycle. Great research is happening with LLM models and related tech for better AI-based products. There is a high demand for AI/ML Engineers with excellent pay right now. Conversely, Blockchain is a slow progressive movement that will take another few decades to see real value and products. But it will prevail as a parallel tech-enabled movement that can be a whistleblower to centralized big tech companies empowered by AI tech.
