The cryptocurrency industry is turning the page with a wave of high-profile scams and scandals, but that doesn’t mean scammers are gone. In recent months, cryptocurrency scammers have been trying to lure the industry into a new, shinier technology called artificial intelligence in an attempt to swindle unsuspecting people out of their money. I’m here as a cynical guide to deciphering plausible business models that claim to integrate these two fundamentally unrelated fields.
It’s still early days, but it’s a safe bet that this new type of hustle will produce a goofy genre of crypto tokens looking to capitalize on AI enthusiasm. As we’ve learned from past hype cycles, it seems like all you need is a paper on cryptocurrencies and you need a decentralized database for everything. From what we’ve seen so far, lazy “AI + cryptocurrency” efforts are poised to appear in three different forms:
The first and least offensive idea is to use cryptocurrency tokens to access an AI model or service à-la-ChatGPT. Part of this presentation will attempt to capitalize on the confusion around the use of “tokens” in both AI jargon and cryptocurrency jargon. Although the term “token” is used in AI models, it has nothing to do with tokens in the sense of cryptocurrencies or blockchain-based ledgers. In AI models, tokens are typically words or common syllables that can be considered processing units within a large language model (LLM). While some AI services allow users to pay for subscriptions with cryptocurrency, there is nothing special about crypto tokens that makes them particularly suitable for interacting with LLM tokens. Nonetheless, expect to meet entrepreneurs who will try to convince you otherwise.
Next, beware of attempts to rehash the “data is the new oil” meme amid the 2017 cryptocurrency ICO boom. This will take the form of scammers selling tokens to reward people who provide personal data to AI training models (so-called “data marketplaces”). This didn’t make sense in 2017 and it won’t make sense in 2023. When it comes to presence on the Internet, your personal data is a horse that has left the barn. There is no reasonable way to monetize this asset, blockchain-based or not. Anyone who says otherwise is either in a Rip Van Winkle situation or simply doesn’t know how most services on the web work. Wickets are rarely placed in open fields.
Lastly, you should expect to see tokens with “AI” or “GPT” in their names (wait, we already have that!). Many cryptocurrency projects take advantage of the naivety of excited people who make decisions through light pattern associations. Rest assured, some will distill it to its purest essence.
None of these “AI + Cryptocurrency” tokens are meaningful to true AI developers. However, the cryptocurrency industry has a habit of developing B-list business models in the hopes that venture capitalists will be easily fooled or greedy enough to repackage them. This includes rebranding existing cryptocurrency businesses to dump tokens into retail businesses.
Look no further than Helium, a wireless networking company founded in the early 2010s to fuel the “Internet of Things” craze. In 2019, the Helium team shifted towards creating a crypto-based model that would act as a “grassroots carrier” enabled through the purchase of physical hotspots where anyone could purchase and receive Network Tokens (HNT) for operations, with the help of dedicated cryptocurrency funds. I did. . Ultimately, the project’s reputation was tarnished by the shaky economics and spoofing evidence it provided to hotspot owners.
Then Worldcoin, a gimmick funded by Sam Bankman and led by Sam Altman, scans the irises in return for cryptocurrency. It is part of an effort to bootstrap the basic universal income experiment. “Identity networks based on identity proofs.” Or something. For those of us who can’t grow a mustache to twirl or lack a fluffy white cat to pet while grinning maniacally, paying poor people for their biometric data to be part of an operation with questionable security practices is classed as harmful nonsense. can be.
It is worth remembering that the primary value of cryptocurrencies is to provide a censorship-resistant store of value that unites people across borders. Basically, cryptocurrency is accounting software. AI aspires to replicate and amplify human thinking. The two skills exist at different ends of the creativity spectrum for a reason.
Kathleen Breitman is the co-founder of Tezos. Opinions expressed in Fortune.com opinion articles are solely the views of the author and do not necessarily reflect the author’s opinions and beliefs. luck.
This story originally appeared on Fortune.com.