Connective Tissue

I’ve been trying to articulate how AI, blockchain, and metaverse (gaming / etc.) are intricately connected by forces other than (all) being (technologically and economically) enabled by GPU (and other HPC) silicon. And perhaps I’m trying too hard. (Spoiler alert: I’m not.) After socializing my last three posts and talking to every founder and investor I can get my hands on (who have been pro and con and everything in between re each of these three technologies), my most current convergence thesis has evolved to these three points (because it’s always three points….)?

1. AI is terrific and its authenticity and (content) ownership issues may be mitigated by blockchain technology.
2. Social media is broken with even Facebook conceding that the fediverse is the future, but IMO it’s likely the fediverse evolves into a truly decentralized and interconnected (social) network of identities underpinned by blockchain technology.
3. Digital (e.g., crypto) currencies currently only have utility for “everyday” use in “currency challenged” countries (don’t cry for me, Argentina), in the US (etc.) for buying drugs, and (most importantly) in gaming platforms where kids will accumulate digital currency value, grow up, go to college, and use their V-bucks and Robux to buy tacos.?

Let me ‘splain….

ONE: Love / Hate Blockchain <> AI.

Everybody had a crush on blockchain (yay!) and now everybody hates it (*sniffle*). Now everybody is smitten with AI (yay!) And the big headline issues with AI (aside from Skynet sniffle) are things like authenticity - e.g., how do we know things are real; and copyright implications - e.g., LLMs trained on content, but creators getting no credit or payment (see: Sarah Silverman, sniffle again). And all the people that were hot on blockchain before dumping it for AI are clutching their pearls: “Oh heavens how are we going to solve these AI authenticity and copyright issues!” The three options (there’s that three again) are: (1) stop it entirely via legislation and policing - see how that worked for music; (2) do nothing - ummmm; or (3) implement models and technology to appropriately track content, move money, and compensate creators. The way to do option 3 is, karmically, blockchain. (“Baby come back!”) No idea how that will work in practice, but I think it’s the solution to a lot of it. There are plenty of non blockchain solutions; e.g., MIT’s Photoguard “poisons” pixels to make photos un-Photoshop-able. But approaches like this still won’t track things in an easy, immutable, secure way, which is what I think will be required assuming it can be cheap enough.

TLDR: in the future all content etc. will be on chain (in some way shape or form) to facilitate authenticity, flow of information, and flow of money to appropriate creators, distributors, etc.

TWO: Social media broke.

It was hacked in 2016 (MAGA!) and Elon Musk sealed its inevitable fate by doing a National Enquirer-esque catch and kill (buy and murder?) with Twitter during an ongoing (and fittingly) tabloid-esque soap opera. Well done, sir. Meanwhile, Facebook’s Threads announcement included a bit about a forthcoming fediverse feature (fedi what? <- TLDR: interconnected social networks). This is basically Zuckerberg saying hey Facebook etc. are broken and eventually it’ll all be replaced by some sort of open thing so we’re gonna back that. Kinda like when he pivoted the company to mobile in 2012, see here, and made what I still think will be a good bet on VR two years later when he bought Oculus - see here. (Creative destruction FTW!) Fediverse isn’t blockchain, but it’s half way to a real open / user-owned content, etc. platform. (Except the user ownership thing doesn’t happen in fediverse because of course.)?

This will morph to something on-chain because it’ll be better for users and faster and neater and better and…. On-chain user-owned identities and content interacting with each other without a closed system containing it all (i.e., a social network) will be the direction. (Think: AOL -> web.) Advertising, targeting, etc. will still happen, but the facilitator won’t be a closed social network. It’ll be something else. Honestly not sure what that looks like (tokenized Mastodon? Second Life reincarnated?) But, for sure, it will be cheaper, nay, more effective (i.e., higher ROI) for advertisers and brands and whatever to reach users so things will move that way. Eventually. The place where this sort of exists now is games. Not exactly, but sort of; and, also, saying that it sort of exists in games now helps my final point….

THREE: It’s raining tacos.

Crypto is currently useless (for consumers) in the US aside from currency speculation (bro) and buying drugs (and prostitutes). Its best consumer use is for people in non Western countries like Argentina and Nigeria for storing value because of their own currencies’ hyper inflation / volatility. So they do need to onboard to crypto (to get money into a stable coin digital format) and off board crypto (to buy stuff). So that’s one way crypto will proliferate and accumulate in people’s “wallets”; i.e., the rest of the world slowly growing (crypto) assets to be used to buy stuff here and elsewhere such that stores etc. here will need to take it (or have an easy way to convert to fiat).?

The only place that some sort of stored value digital currency will accumulate for Americans is kids playing video games. That market will get stupidly large? and eventually all of these kids will grow up and want to spend that digital “money” on stuff like tacos at college. (We used our student IDs to buy tacos at Penn, which went on our bursar bill - thanks, Mom and Dad!) So they’ll need a way to convert their V-bucks and Robux to money to buy tacos. That’s the off-board. Oh and games is also metaverse and AI and blockchain as per above and here, here, and here.?

So there you have it: blockchain is the connective tissue linking AI, gaming / metaverse, and the rest of the web together. I think.