Revolution Alert: Blockchain + AI
Let's see where these two technologies have the largest impact this year.
Blockchain and AI are two groundbreaking technologies reshaping our world. When these technologies merge they generate entirely new opportunities that you can start creating today.
Here are a few areas where this convergence is creating new opportunities:
NEW BUSINESS MODELS
Empower your AI agent to transact independently
This is the area I’m most excited about as it disrupts a lot of legacy transactions on the web. AI agents can now handle transactions with blockchain wallets - no old-school billing hassles.
Here’s how it would work, you create a task or your AI agent that requires them to interact with a paid service or to purchase some human labor to help it. Your AI agent doesn’t need to use a credit card or to require your approval, they can transact at a very small fee for any servcie they need. Perhaps they even pay another AI to help them with their work, exemplifying the "Machine to Machine” M2M payments. Credit card transactions weren’t meant for micro payments like this for a host of reasons. If you tinker at all with AI, you will understand why this will be very in demand.
Thinking even further, Arthur Hayes proposed a M2M that would allow an AI agent to even fund it’s own electricity costs, which he calls "Food for AI". Some early experiments are happening on Bitcoin and Lightning today covered in the Ark Podcast.
Create AI-generated digital assets
In crypto, we’ve been touting the ability of NFTs to create verifiable scarcity and ownership for years, but those attributes become even more important in the era of generative AI. If the cost of creating or copying digital items is nearly free, having a system to verify the origin or ownership of a digital asset becomes even more important. We’ve seen the rise in NFTs but with the coming creative explosion with new AI tools, digital rights become more important.
Transact with an AI operated DAO
AI is finding a home in DAOs. Why? Because traditional legal structures don't really suit AI agents. DAOs offer a flexible, borderless way for AI to work and grow, changing how we think about AI in society.
The hypothesis is that AIs will choose to create DAOs using public blockchains to execute smart contracts, which in turn will allow the DAO to provide a service for a fee. This sounds far fetched, but looking under the hood, existing legal structures don’t fit well for AI agents. LLCs and Corps are tied to a geography, offer liability protections to the human owners, and report taxes and other government requirements to a set jurisdiction.
DAOs are internet native organizations that have ways to operate and prove ownership, but can exist outside the bounds of a single geography. Hypothesis on this area even imagine where AI DAOs will use DEXs to raise funds for needs or to have liquidity for their service tokens.
BETTER & CHEAPER COMPUTE
Interoperability becomes possible in privacy preserving tech like Healthcare
AI systems can achieve unprecedented interoperability using blockchains. This means AI solutions in healthcare can seamlessly interact with financial systems for automated billing or insurance processes. Similarly, AI in retail can integrate with supply chain solutions on the blockchain, leading to highly efficient inventory management and personalized customer experiences.
Accessible, scalable computation on-chain
Breakthroughs now enable complex AI on blockchains which unlocks decentralized knowledge graphs previously impossible. These networks harness the power of distributed computing, allowing for immense computing power that's accessible to smaller players, not just tech giants. This democratization can accelerate research in complex fields like drug discovery and climate modeling, where vast computing resources are essential. It also radically reduces costs compared to legacy compute.
Enhanced data security and privacy in AI
The integration of blockchain in AI data systems promises enhanced security and privacy. Blockchain’s immutability ensures that AI algorithms are fed with untampered data, crucial for sectors like financial services and healthcare. Blockchains can enable secure, anonymized data sharing, fostering a more collaborative AI research environment while maintaining individual privacy.
IMPROVED AI RESULTS AND ACCESS
Incentivize Open Source AI Models
We’ll need competing AI Models beyond just OpenAI and Llama, which would require decentralized GPU sharing incentivized with a tokenomic funding model. This could help create more transparency, access, and competition to existing AI companies, which right now are very biased towards US-centric customers. It also mitigates incumbent advantages in AI, unlocking new applications. Places like Akash and Render are breaking new ground here.
Open source has another advantage besides cost, it can create more fair models. Imagine an AI outputs that aren’t just smart but less biased. Crypto is making this happen with token curated registries that benchmark model performance or staking schemes that reward generalizability. It also addresses biases and brittleness in AI model output. These incentive structures can help make AI that's not just high-tech but also high-integrity.
Create Trusted AI Outputs with ZK proofs
If you’ve read about AI model bias or “hallucinations”, you understand that AI outputs aren’t perfect. Enter blockchain. Zero-knowledge proofs and authentication standards can be used to validate training data, model outputs, and system integrity. It creates needed transparency and trust from a "black box" AI model.
WHAT’S NEXT?
Blockchain and AI together are creating a whole new playing field. Having spent the last decade in the blockchain and startup landscape, I’m excited to see how AI adds a whole new layer of innovation of what’s possible. As laid out in these examples. Blockchains provide economic models for collaboration, security, and verifiable information that wouldn’t be possible without them. Leveraging these attributes with AI makes for an exciting landscape to launch the next 1,000 most important businesses.
I’m excited to spend more time looking at this convergence so please let me know if you are working in these areas or know others who are. I’m also actively playing around with general AI tools too, so if you’re curious, let’s connect.
Find me on X at @br_ttany.