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(Kitco News) – The skyrocketing success of OpenAI’s ChaptGPT has led to a surge in artificial intelligence-related cryptocurrency projects in 2023, but one popular developer in the blockchain industry is warning that the sector is offering false hopes as AI is far from ready to be integrated with blockchain technology in its current form.
Andre Cronje, a highly-respected blockchain developer and director of the Fantom Foundation, recently spoke with Kitco Crypto about the sudden surge in popularity of AI-related crypto projects, with Cronje stressing the fact that based on the current tech, AI isn’t really compatible with blockchain technology.
“There is no integration. An AI can’t (with current tech) live inside a blockchain,” Cronje said. “AI’s are also black box and mutable, blockchains are transparent and immutable.”
Cronje went on to note that while there are possible “vertical of integration,” such as “blockchains used for payment infrastructure to facilitate machine-to-machine access to (or between) AIs,” and the use of blockchains “for AI federation and communication protocols,” these can “also be achieved without blockchains.”
“The two aren’t in an exclusive symbiotic relationship,” Cronje said. “The problem is less the intersection of AI and blockchain, and more the narrative chasing/hype/fomo system of the crypto industry.”
When asked about what crypto investors should instead be looking for in the way of the next major advancement to come to blockchain technology, Cronje’s answer was straightforward: “Throughput.”
“The same way that ISDN improved over 56k dialup. Or ADSL over ISDN. Or Fibre over ADSL, etc. Bitcoin (56k dialup) was improved by Ethereum (ISDN),” Cronje said, adding, “Ethereum has been improved by Fantom (ADSL).”
“Each milestone is blocked by the underlying technology,” he noted. “Decentralized finance couldn’t practically exist on Bitcoin, but it could Ethereum. Decentralized social media, gaming, streaming, etc can’t exist on Ethereum, to some extent they can on Fantom, but they won’t be unlocked until the barriers are decreased.”
Cronje suggested that things like wallets, gas fees, and non-token-based revenue streams were all barriers to entry that need to be addressed to help improve the overall functioning and adoption of new blockchain verticals, like social media. “We have hit the current tech wall and need to breach it first,” he said.
Turning the topic of the conversation to a sector near and dear to Cronje – decentralized finance (DeFi) – the prolific developer said that DeFi “mimics finance,” and suggested that it will follow a similar developmental path.
“If we consider traditional finance, we started with: remittance, asset tokenization, stock trading, market making, leverage/lending, insurance, high-frequency trading, derivatives, and integrated payments,” Cronje said. “The reason it evolved this way is because each preceding item is required for the next to become viable.”
“Decentralized finance, is following this pattern to date,” he elaborated, noting the journey from remittance, asset tokenization and trading to market making, leverage/lending, insurance, high-frequency trading, derivatives and integrated payments.
“The next developments would likely be less around core primitives, but more around the requirements to expand from on-chain to off-chain,” he said. “Specifically: Tokenizing real-world assets; Onchain auditing tools and reporting; and Insurance.”
According to Cronje, “Real-world assets become a regulatory discussion which has historically been why this has been underdeveloped, however with positive legislation occurring in EU and Asia, we will likely see an influx here.”
To help address these issues and move the industry forward, Cronje and the team at Fantom have been focused on addressing some of the issues outlined above by improving confirmation times, bringing true finality to Fantom by removing chain reorgs, including a gas monetization feature that allows developers to earn 15% of revenue from gas fees, providing gas subsidies to help users onboard into the Fantom ecosystem, and the creation of native smart wallets that allow crypto wallets to be owned through normal Web2 methods like a username/password, social media authentication and facial recognition.
The main message from Cronje was that crypto investors should be wary of sudden narratives that drive prices higher without much substance, saying it’s “an important thing to remember that narratives and news travel a lot faster than research and development. These things take years and decades, not weeks or months. Patience and a long-term view are key.”
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.