Crypto x AI — how the combination of both will change the world

What a time to be alive as a technologist. In history the most ground breaking innovation always came from a combination of several disruptive technologies. We are about to witness another one of these moments that will have fundamental impact on humanity.

Crypto (I will use the term crypto throughout this article as an umbrella term for all the tech that is empowered by cryptography and decentral ledger technology i.e digital assets, blockchain, tokenization and web3) and AI are revolutionary technologies on its own, but the combination of both will give birth to a new era of prosperity through new concepts of data utilization and sharing incentives. In this article I share my view on why Crypto is the most important puzzle piece in ensuring that AI will work in sync with humanity’s prosperity and will describe five thought provoking ideas that we might see in the future.

Before we jump into the ideas, lets quickly recap the state of Crypto and AI

The rise of the crypto economy

Crypto technology innovation will continue to have significant impact on every value chain in every sector, hence my view is that the economy will transition into a crypto economy — an economy that is powered by crypto infrastructure and that transacts most of its value via digital assets and tokens. Verified and trustless.

Despite the recent crypto-winter, the advancement of the technology, the development of solutions and institutional adoption that happened behind the curtain and away from mainstream attention is stunning (in the crypto world we say winter time = BUIDL time). Here are a few examples:

• The amount of crypto owners increased 39% in 2022 to a total of 425 million users¹
• web3 developer activity spiked in Q4 2022 with an increase of 453% of Ethereum smart contract deployment²
• Many corporates have launched web3 products or developments, e.g. Mercedes-Benz has launched Acentrik a blockchain-based data-market place European utility giant E.On has launched a whitepaper for self-sovereign digital identity for individuals, organizations and assets. Global investment giant KKR launched a USD 4bn tokenized fund.
• In addition many commercial banks like Society General or BNY Melon have launched digital asset offerings for their clients
• A recent survey revealed that 6 out of 10 C-level executives see the development of their Crypto Economy strategy as a high priority³

The mass adoption of AI

The advent of AI has been talked about a lot over the past years but in my view nothing is better than showcasing — “show me, don’t tell me”:

The recent reveal of mainstream AI tools like ChatGPT, DALL-E, Synthopia left no doubt that artificial intelligence is providing significant disruption at your fingertips. Not tomorrow, today!

Among many other things AI will empower anyone to 10x their capabilities in:

• Writing essays, articles, research documents, presentations
• Writing and improving code
• Creating visuals and audio
• Researching and problem solving
• Managing tasks and activities

Generative AI will not only boost productivity but it will fundamentally change business and job profiles. The change will be so rapid and quick that many businesses will be overwhelmed. It took ChatGPT only 5 days to reach 1 million users (for comparison: it took Spotify 5 months to reach the same).

It is a fascinating development but at the same time we need to ensure that there is a protective technology in place that ensures trustworthy sources and an inclusive and fair rise of AI for the benefits of organisations and individuals. The technology that will go hand in hand with AI in this development is crypto.

Crypto x AI — the lock and the key

The source of power for AI comes from data. AI needs to access data in order to train and enhance its capabilities. Where is this data coming from? From all of us — from individuals, organizations and assets! And this is where crypto and web3 comes into play. Through the ability to bring data ownership back into the hands of the owner, manage access rights and pricing, crypto becomes the heart and soul of a new data economy that works together with AI. One of the missions of web3 is to demonopolize the current web 2.0 power structure and with that also break up the data silos of GAMA ⁴ . Soon, organizations and individuals will have their own data wallets that will allow them to publish and monetize their data in a self-sovereign way. That could be data about purchase history, energy consumption, transaction data or any intellectual property.

Data wallets are the perfect counterpart for AI — a win-win situation: AI will access data that is high quality and validated, while owners of the data will be compensated for it through micro-transaction in the form of tokens or stable coins, which furthers increase the willingness to share relevant data. In addition, for sensitive data it is possible to not share the entire data set but let the AI run an algorithm over the data set and only feedback the results — this is the compute-to-data feature from the folks at Ocean Protocol

The grade of disruption that these two technology can bring together is yet to be seen, but if we assume “sky is the limit”, then the following 5 ideas are very much possible:

I. The rise of professional avatars:

The Rise of the Avatars © P. Samaties

You will be able to train your avatar to an extend where it can replicate your skills, whether it is a professional service like advisory or consulting, giving a presentation, having conversations or replicating your e-sports performance. The advancements in video and speech AI will even make your avatar visually and acoustically indistinguishable from your real on-screen persona. This would mean that professional services are not bound to the available working hours per day and are not limited to timezones and locations. For certain tasks you (presented by your avatar) will able to be in able to be in multiple places at the same time.

A crypto-based digital identity wallet will ensure that the avatar has access to your data and 3rd parties can verify that this avatar belongs to you and is not a deepfake. Your avatar will be paid in crypto tokens for his services and work while you are busy with other topics, are on vacation or sleep.

II. Democratization of wealth management:

Pluto © P. Samaties

Professional wealth management today is only available for high-net-worth individuals as it requires volume and dedicated attention for processing data and customized strategies. In addition over 2 billion people do not have access to basic financial services⁵
AI and crypto will change this. AIs are building wealth management strategies through processing data and learning market movements. They do this through a variety of data, e.g. media sentiment, technical analysis, fundamentals analysis. They AI will be able to learn, predict and therefore create wealth management strategies at marginal costs. As a significant amount of financial trading today is already driven by bots, patterns and trade data can be analyzed efficiently by the AI.

Whats the role of crypto here? Wealth management services will be available for everyone on the planet — and it will be crypto powered. Not only is crypto allowing anyone to connect to these wealth management solutions by simply downloading a wallet, individuals and organizations will be able to dedicate funds to digital wealth managers according to their risk profile and preferences. These AI wealth managers will trade tokenized real-world and native digital assets and will return the benefits straight into the users wallet — auditable on the blockchain. In addition, it will open up opportunities for the best traders in the world to connect their algorithms to such a platform and be able to put their strategies to work for larger pools of funds and therefore increase their income. Innovative companies like wisdomise building an entire ecosystem including a DAO⁶ that aims to pick the right wealth management strategies based on a track record or in other words: “proof-of-wisdom”.

III. The age of AI artists:

2PAIc © P. Samaties

AI will be able to recreate the voice and tonality of your favorite artists. And given that math is at the very core of music theory, it will also be able to create new beats. Already today AI and machine learning is used to arrange and master tracks to increase chances of success through learning form the acoustic and structural characteristics of previous chartbreakers. Hence, AI will let you create entirely new songs, no matter if the artist is alive or not (looking forward to brand new 2pac songs feat Drake and Biggie) with professional instrumentals and structures. Combine this with the “The Rise of professional Avatars” and its easy to see how entire concerts and shows can be performed by artist avatars, in a metaverse or as a hologram on stage.

While this is exciting on the one side, it is a potential nightmare for artists and labels in terms of copyright protection and plagiarism. Also as fan, it will be hard to tell if the song you are listening to is really from the artist. Crypto is the solution: through music NFTs artist will be able to verify that the song is authentic and collect royalties. The digital scarcity that NFTs introduced also enables artist to limit the quantity of for instance special editions of their songs that are sold as real collectibles with limited quantity (like in the vinyl days).

The music industry is just one example, but you can replicate the impact to nearly any creative industry including game developement.

IV. Trade 3.0

Trade 3.0 © P. Samaties

The recent disruption of global supply chains caused by lockdowns and demand drop during the Covid crisis has exposed how vulnerable and inflexible large parts of the current system are (and how much still depends on pen and paper). AI and Crypto will bring significant optimisation and volume improvement to the global trade. The consensus in the market is expecting a lower single digit trillion dollar contribution of AI and Crypto to global trade. In addition both technologies will significantly decrease trade value chain costs and change job requirements and business profiles. Crypto and AI again go together like the lock and the key when it comes to a Trade 3.0 infrastructure:

AI brings many benefits to the optimization of trade across the entire value chain such as:

• Streamline and automate repetitive tasks like document management
• Optimize warehouse management
• Enhance supply chain visibility
• Improve demand and supply predictions
• Enhance risk management

Crypto will benefit the trade value chain in the following way:

• Improve counterfeit protection and supply chain security through recording of the goods journey on a tamper proof decentral ledger
• Reducetransaction cost and improve speed through using cryptocurrencies as means of settlement
• Automate standard paperwork through smart contracts attached to oracles (real-world data feeds, that trigger events)

In a world where all the above is implemented, countries and organizations will become way more resilient towards supply chain shocks, international deliveries will become faster and customers will gain maximum transparency about the journey and authenticity of their goods. The later is extremely important as depending on the region 10–30% of medical goods are counterfeits⁷

Many companies like VeChain and Spherity are working on providing tamper-proof supply chain solutions and the UAE just recently announced a new trade tech initiative to leverage AI and crypto.

V. Decentral Science (De-Sci):

Crypto and AI will speed up scientific research and give birth to Decentralized Science. De-Sci utilizes decentralized technologies such as blockchain and smart contracts to create a more open, collaborative, and inclusive scientific ecosystem. It empowers researchers, academics, and citizens to share and access scientific knowledge and data in a more transparent, secure, and efficient way. Smart contracts ensure a tamper proof peer-review process while data wallets and data NFTs ensure ownership, IP and monetization.

In addition, AI will help to manage and organize large amounts of data that are generated in decentralized scientific research, improving the efficiency and accuracy of data analysis and making it easier for researchers to find meaningful insights. As already applied today, AI will assist researchers in finding patterns that may not be apparent immediately and utilize this for predictive modeling.

Inventions like Ocean Protocol’s ”compute-to-data” will be a key enabler, as it provides an incentive system for anyone to share data with AI in a privacy preserving way.

Conclusion

At the core of all of these disruptive ideas mentioned above is data. The development and rollout of a crypto/web3 data infrastructure is key for this new data economy and for the developement of AI in line with human prosperity. Individuals and companies that will adopt it first are likely to gain advantage over their peers.

In addition, I believe the entrepreneurial landscape will change substantially. AI and Crypto empower solo-preneuers without a lot of capital requirements to start businesses on par with its existing competitors and scale much faster. We might even see startups, in the form of DAOs, being completely run by AI (check this article by Trent McConaghy if your like to go deeper down the rabbit hole)

The industries that will be mostly disrupted by these developments will be financial services, entertainment, logistics, academia and professional services

I am personally very excited about the innovation and opportunities that we are going to see and the impact it will have on prosperity of humanity. Happy to hear your thoughts!

P.S.: All of the pictures that you see in this article, are available as limited edition NFTs (10 editions each). If you repost or reshare this article on your social media, kindly let me know and I will send you your preferred NFT as a thank you!

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1. Source: Crypto.com 2022 report
2. Source: Techchrunch
3. Source: Roland Berger State of the Crypto Economy Survey 2022
4. Google, Apple, Meta, Amazon
5. World Bank study, 2021
6. Distributed Autonomous Organization
7. according to the WHO