The cryptocurrency industry is turning over a new chapter with a wave of high-profile fraud and scandals, but that doesn't mean the fraudsters have disappeared. In recent months, cryptocurrency fraudsters have tried to tie the industry to something new and brilliant called artificial intelligence, hoping to separate their funds from unsuspecting people. I'm here as a satirical guide to break down this shady business model that claims to unite these two otherwise unrelated industries.
It's still early days, but this new type of activity is sure to spark a generation of crazy crypto tokens looking to capitalize on the AI craze. As we have learned from previous hype cycles, having a thesis about cryptography creates the impression that decentralized databases should be built around that thesis. From what we have seen so far, AI + crypto is thought to have three different variants.
The first and least offensive idea is to use cryptocurrency tokens to access AI models or services like ChatGPT. This portion of the presentation will attempt to clear up the confusion surrounding the use of “tokens” in relation to artificial intelligence and crypto. Although the term “token” is used in AI models, you can be sure that it has nothing to do with tokens in the sense of cryptocurrencies or blockchain-based ledgers. In AI models, tokens are ordinary words or syllables that can be considered as controllers, usually in large language models (LLM). While some AI services allow users to pay for subscriptions with cryptocurrency, there is nothing special about the token that makes it particularly suitable for interacting with LLM tokens. However, expect to meet entrepreneurs who want to convince you otherwise.
Next, be wary of trying to repeat the “data is the new oil” adage that was everywhere during the ICO boom in 2017. These are roaming tokens that are supposed to reward people for feeding their personal data into AI training models . (called "data markets"). That didn't make sense in 2017 and it doesn't make sense in 2023. When you have an online presence, your personal data is like a horse that has left the stable. There is no smart way to invest these assets, blockchain-based or otherwise. Anyone who tells you otherwise is either Rip Van Winkle or doesn't know how most internet services work. Turnstiles are rarely placed in open areas.
After all, we will see the symbol "AI" or "GPT" in the name (wait, we already have it). Many cryptocurrency projects use the trust of motivated people and make decisions based on light. Rest assured, some people will find it pure.
None of these “AI plus crypto” tokens make sense to actual AI developers. But the cryptocurrency industry has a habit of recycling B-list business models in the hope that venture capitalists will be gullible or greedy enough to repackage them. This includes rebranding cryptocurrency companies in hopes of selling tokens into retail currencies.
Take a look at Helium, a company founded in the early 2010s as a wireless network for the Internet of Things. In 2019, the Helium team, using individual cryptocurrency funds, focused on developing a cryptocurrency-based model that would act as a “primary business link” that could purchase physical access points and network tokens (HNT) that could be purchased by anyone . Ultimately, the project's reputation was damaged by the poor economic conditions offered to hotspot owners and evidence of fraud.
Then there's Worldcoin, an iris-scanning cryptocurrency hack funded by Sam Bankman-Fried and run by Sam Altman that is part of a larger global revenue experiment and effort to build a "self-verifying network." Or so. For those of us who can't grow a mustache to twirl, or who don't have a white-furred cat to pet while laughing maniacally, paying poor people for mustaches can be classified as dangerous biometric silliness. operations with questionable safety practices.
It is worth noting that the main value of cryptocurrencies is to provide a censorship-resistant store of value that brings people together across borders. Basically, cryptocurrency is accounting software. Artificial intelligence seeks to imitate and improve human thinking. It's no surprise that these two technologies are at different ends of the creative spectrum.
Kathleen Breitman is the co-founder of Tezos. The opinions expressed in Fortune.com reviews are solely those of the author and do not necessarily reflect the opinions or beliefs of Fortune .
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