Coinbase Ventures: The Future Of AI Can Be On Blockchains

Coinbase Ventures came out with a report as to how it potentially sees the future of AI unfolding. This is something we discussed over the past year or so.

The marriage between AI and blockchain is natural. From this, we have to look at the part cryptocurrency is going to play. It is a relationship that is likely the preferred mode of operation.

Of course, to achieve that, we have to build these systems. Here is where Web 3.0 has lagged. That said, the benefits are becoming clearer.

Both AI and blockchain compliment each other. Many of the questions surrounding AI are answered with blockchain. Cryptocurrency is actually not the main story. In fact, it is simply along for the ride (more on this in a moment).

The Future Of AI Can Be On Blockchain

The Internet is completely changing. This is something I keep espousing. Do not think that much of what we are dealing with today is going to be around in 3-5 years. It is actually something the Coinbase Ventures reports touches upon.

Let us start by looking at two technologies. This is what it had to say:

Tl;dr: The future of AI can be built on blockchain technology, as crypto can help increase accessibility, transparency, and use cases within the emerging tech. The convergence of crypto’s efficiency, borderless nature, and programmability with AI has the potential to transform how humans and machines interact with the digital economy, including by enabling users to have sovereignty over their personal data. This includes the rise of the “Agentic Web,” where AI agents operating on crypto infrastructure can drive economic activity and growth.

This should be familiar to regular readers of this blog. We have discussed how blockchain compliments AI, a core piece of the next generation Internet. The amount of human transactions, as a percentage of the overall, is going to plummet as AI-to-AI becomes the norm.

It is what Coinbase Ventures refers to as the "Agentic Web".

AI agents will number into the tens of billions. The base interaction is be agent-to-agent. They will be responsible for compiling information, making decision, and carrying out specific tasks.

This is also the reason why the website will cease to exist as the base element of the Internet. It is going to be replaced by the AI agent.

Coinbase Ventures further explains:

So what does this look like? AI agents making transactions on crypto infrastructure. software code created by AI, including smart contracts, leading to a surge in onchain applications and experiences. Users owning, governing, and earning from the AI models they contribute to. Leveraging AI to improve user and developer experiences within the crypto ecosystem, enhancing smart contract capabilities and creating new use cases. And so much more.

As stated, this agents are going to be swiping the ole Visa card.

The reason why I said crypto is along for the ride is because, with more rails being built, the medium of exchange will default to crypto, especially if the AI agents are on blockchain. There is no reason to incorporate an intermediary when an agent has a crypto wallet. This allows it to financially interact other agents as necessary.

Of course, removing the friction means we will see costs decline.

Key Driver Of The Economic Singularity

The present market capitalization of cryptocurrency, as denoted by CoinGecko, is roughly $2.5 trillion. Raoul Pal is talking about this moving up to $100 trillion.

This is an important point from the perspective of funding. If crypto people have $100 trillion in market value, what can be done with that? How much more funding will take place? We will likely see tens of billions made available to further expand and build.

Here is where we couple the funding with the technology. How much economic productivity is gained with an "agentic web"? With tens of billions of AI agents operating by the early 2030s, we could be looking at a growth rate of 20%-30% globally per year.

Cryptocurrency brings more distribution, transparency, verifiability, and is native to different networks. Also, trust is established since it is censorship resistant.

What gets interesting is the fact that we can see tens of trillions in economic productivity adds to the global economy via microtransactions. One advantage crypto has over the existing financial system is the latter cannot handle microtransactions. When a system is littered with financial intermediaries, everyone wants a cut. This makes sending a miniscule amount of money impossible.

Let us give an example:

Inference compute is expected to become a major bottleneck. Training compute is going to be dwarfed by this.

Tesla is looking to answer this by having a computer in each vehicle that can be used for inference. Naturally, this will require payment.

How could something like this work? Naturally, if it is run through a company like Tesla, it could design the system to pay out net on an interval basis, say weekly. That would have the software accruing the different activities and allocating the payments.

What if, however, this system was not centralized? How about we look at your phone offering inference to someone who is sitting next to you at the park? How do you get paid for a "prompt"? What would that cost?

Here is where cryptocurrency enters. If might be 1/10 of a cent. Visa cannot handle that transaction. Neither can a bank. But a blockchain like Hive could sent .001 HBD as payment.

Generative AI

This is a bit outside the scope of this article but it is worth stressing how generative AI is going to be at the core of this.

It is going to be the basis of the Internet.

AI agents will operate autonomous based upon the different tasks they handle. This is going to stem from LLMs and other real world training that takes place. We will see many different kinds of models from which developers build. Of course, it is likely that AI agents are used to build more AI agents.

Much of this is tying back to a few basic components. This is where blockchain can also be looked at.

We have:

• compute
• data
• energy
• applications
• software (code)

Essentially we are back to the centralized versus decentralized discussion. When we are dealing with decentralized infrastructure, cryptocurrency is the native payment system. Hence, if generative AI is the basis of the next generation Internet, it is likely that blockchain has a role to play.

Fortunately, it is up to us to determine how large that is.

To me, this is a topic that is imperative for everyone to discuss. We are getting closer to the point where our future is riding on it.

Generative AI is going to take over the Internet. We are already seeing the "agentic web" starting to form.

As always, the big question is who will be in control and financially benefit?

This is where a decision is required. Each time we put data online, we should be conscious of where it is going.

By now, it should be clear to everyone that nothing gets lost and only feeds into something larger.

What is being fed?

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What Is Hive

Posted Using InLeo Alpha