Pantera Capital’s Cosmo Jiang predicts ‘Cryptocurrency and AI convergence will be key to mitigating AI risks in 2024’
Posted: December 29, 2023 11:19 AM Updated: December 29, 2023 11:19 AM
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Cosmo Jiang, Portfolio Manager at Pantera Capital, shared insights on the potential crossover between cryptocurrency and AI in 2024.
In contrast to past struggles, Bitcoin has recently lived up to expectations with a stunning 130% rebound in 2023, establishing itself as one of the standout performers among major assets this year. As the year draws to a close, Bitcoin’s resurgence sparks a critical examination of common market assumptions.
In a complete departure from traditional approaches, the convergence of cryptocurrency and artificial intelligence (AI) is steadily emerging as a driving force for transformation to effectively mitigate AI risks expected in 2024.
Recently, cryptocurrency asset management company Grayscale argued that the intersection of blockchain technology and AI has the potential to revolutionize the landscape by addressing critical concerns surrounding AI advancements.
It challenges existing paradigms, arguing that blockchain technology can serve as a powerful tool to combat the societal risks posed by AI, including the alarming spread of deepfakes, bots, and misinformation. The report argues that decentralized computational protocols, which actively oppose centralized control, play a critical role in governing powerful AI models, especially those that use sensitive personal information.
In a recent conversation with Metaverse Post, Cosmo Jiang, portfolio manager at Pantera Capital, highlighted the transformative potential of the intersection between cryptocurrencies and AI and shared his outlook for 2024.
Cosmo Jiang of Pantera Capital argues that prominent investment firms are gradually acknowledging the strategic convergence of public blockchain and AI technologies. He made clear the transformative potential of blockchain, arguing that it offers a paradigm shift by facilitating centralized control over powerful AI models that process sensitive personal information.
As traditional boundaries blur, the intersection of cryptocurrency and AI is emerging as a strategic vehicle for innovation and control rather than simply a speculative venture.
“AI is a powerful technology, and concentrating control in the hands of a few large technology companies is potentially dangerous. This is why the OpenAI situation has led to a surge in interest in decentralized approaches to AI development based on blockchain technology.” Cosmo Jiang of Pantera Capital told Metaverse Post.
“I believe the superpower of cryptocurrencies is that they use token incentives to coordinate distributed groups of actors. Bittensor is one of the protocols that uses token incentives to coordinate an open source AI model development platform, i.e. an open source alternative to OpenAI mediated through blockchain,” he added.
Cryptocurrency project driving the future of AI
Pantera Capital’s Jiang highlighted promising cryptocurrency projects, detailing the standout features of Akash Network, Render, Worldcoin, and Bittensor.
Known as the “decentralized AWS,” Render and Akash leverage token incentives to connect compute providers and end users to address the critical compute undersupply that is hindering AI growth. Likewise, he argues that Bittensor is emerging as a decentralized alternative to OpenAI, fostering an open-source AI model development platform through token incentives.
“This is a solution to one of the most serious problems impeding the growth of AI today: the undersupply of compute driven by surging demand for AI-related workloads from hyperscalers like Amazon, Microsoft, and Google,” explained Cosmo Jiang of Pantera Capital. . . “Open source AI models have the potential to be a better source of intelligence than “walled garden” permissioned and siled models by lowering the barrier to entry for contributors, reducing friction for complex learning, and allowing for community-driven decision-making. “On AI Alignment.”
Additionally, with an identity database using cryptographic proof, Worldcoin addresses the growing need to verify unique personhood in the face of AI-generated content.
“Worldcoin is different from and better than government databases in that it is fully digital, has a globally consistent standard, and resists censorship (whether inappropriate or not) by centralized authorities. Worldcoin is kickstarting adoption by offering token incentives to users who log in, which has already led to about 5mm of people joining,” Jiang added.
Pantera Capital’s Strategic Positioning in Crypto-AI Convergence
Jiang expressed optimism about the future of decentralized AI, sharing that Pantera actively supports entrepreneurs at the intersection of AI and cryptocurrency. Having invested in Bittensor, he added that Pantera’s commitment is consistent with promoting open source AI development and supporting sustainable financial incentives for contributions.
“I believe AI and cryptocurrency have disruptive potential and I expect them to converge in many ways. We have already deployed meaningful capital to companies at the intersection of AI and cryptocurrency and are actively investigating the space for new opportunities. Our investment, platform and technology research teams have dedicated resources to help accelerate the growth of these portfolio companies,” said Jiang.
He also sheds light on the factors influencing Pantera’s investment in Bittensor and highlights the new token incentive mechanism that addresses the massive market of AI model creation and use. This investment is consistent with Pantera’s broader strategy to support open source development within the blockchain ecosystem, similar to the nascent Bitcoin community.
“Open source development and adoption is important not only for cultural reasons, but also because open source has the potential to produce better AI models over time than what exists within walled gardens like OpenAI or Meta,” says Cosmo of Pantera Capital. “It’s gaining traction for both practical reasons to have it,” he said. Jiang told Metaverse Post. “We look forward to opportunities for AI and cryptocurrency convergence in 2024.”
Pantera Capital’s optimistic stance on the convergence of blockchain and AI in a rapidly evolving environment reflects the paradigm shift and aims to address challenges and opportunities at the intersection of these transformative technologies.
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About the author
Victor is the Managing Technology Editor/Writer at Metaverse Post and covers artificial intelligence, cryptography, data science, metaverse, and cybersecurity within the enterprise space. He boasts of five years of media and AI experience working at renowned media outlets such as VentureBeat, DatatechVibe, and Analytics India Magazine. Having worked as a media mentor at prestigious universities such as Oxford and USC, and holding a Master’s degree in Data Science and Analytics, Victor is committed to keeping up with new trends. He provides readers with the latest and most insightful stories from the world of technology and Web3.
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Victor Day
Victor is the Managing Technology Editor/Writer at Metaverse Post and covers artificial intelligence, cryptography, data science, metaverse, and cybersecurity within the enterprise space. He boasts of five years of media and AI experience working at renowned media outlets such as VentureBeat, DatatechVibe, and Analytics India Magazine. Having worked as a media mentor at prestigious universities such as Oxford and USC, and holding a Master’s degree in Data Science and Analytics, Victor is committed to keeping up with new trends. He provides readers with the latest and most insightful stories from the world of technology and Web3.