Rise of the Transformers
AI, Crypto & the 2020s
Given the resurgence of AI excitement, I choose to spend this past week exploring the potential repercussions of large language models on crypto. I am far from an AI expert, but the intersection of the two areas is too important not to think about deeply.
Given the more in-depth nature of the topic, we choose to make it into a longer-form PDF report. Link after initial summary below.
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Our digital future will increasingly be defined by the interplay between AI systems and crypto
The recent advances in Large Language Models (i.e. “The Transformers”) are staggering – paving the way for a new generation of “platforms” built on text as the universal interface
The Transformers are beginning to proliferate while the “self-sovereign data” movement is still in its infancy; another decade of platforms with more concentrated value-capture & limited compensation to data creators
I see three separate stages of AI and crypto interaction going forward – from the obvious to the increasingly speculative, yet essential:
“The Obvious”: existing machine learning solutions computed over expanding on-chain datasets. Examples include undercollateralized lending, on-chain targeting, and more targeted community formation & governance
“The Acceleration”: co-opting large natural language processing models to enhance smart contract development speed and security, leading to an inflection in on-chain data and new insurance “+” business models
“The End Game”: the realization that Transformers will likely be subject to the same power laws which govern software and internet aggregators. A new internet substrate – with scale, tiered-access, and community governance – will be essential to expand on-chain adoption and broaden use-cases to a level which can demand compensation from the dominant Transformers in each vertical
While I am far from having all the answers, I hope the below can spark some ideas in the community. As always, feedback welcome: - @PonderingDurian
*** FULL REPORT —> RISE OF THE TRANSFORMERS ***
Photo Source: Jesus Rodriguez