A series of prominent fraudulent schemes and controversies have been making headlines within the cryptocurrency realm. Despite this, scammers continue to operate within the industry, targeting unsuspecting individuals in an attempt to swindle them of their assets. Recently, there has been a deceptive trend where crypto fraudsters are trying to link the sector with the more advanced technology of artificial intelligence. I am here to act as your skeptical guide in debunking the fraudulent business models that assert a fundamental connection between these two fields.
While this emerging trend is still in its nascent stages, it is evident that it will give rise to a new wave of crypto-tokens that seek to leverage the growing interest in AI. When faced with a crypto-centric concept, the tendency is to overlay it with a distributed database, as seen in previous marketing tactics. The emerging “AI plus crypto” ventures are anticipated to manifest in three distinct variations based on current observations.
The initial and most misleading proposal involves utilizing a bitcoin token to access an AI model or service through ChatGPT. This pitch aims to exploit the ambiguity surrounding the term “tokens” in both AI and crypto contexts. Despite the shared usage of the term “tokens,” it is crucial to note that in the realm of AI models, “tokens” refer to words or common syllables utilized as processing units, particularly within large language models (LLM). While some AI companies may accept cryptocurrency payments for subscriptions, there is no inherent advantage of crypto-tokens specifically tailored for LLM interactions. Beware of individuals attempting to persuade you otherwise.
Additionally, be wary of endeavors to revive the outdated notion that “data is the new oil,” a concept popularized during the 2017 bitcoin ICO frenzy. These endeavors may involve selling tokens purportedly as rewards for providing personal data to an AI training model (referred to as “data marketplaces”). This concept was illogical in 2017 and remains so in 2023. Once personal information is shared online, it is virtually impossible to reclaim ownership or control over it, whether it is blockchain-based or not. Individuals claiming otherwise are either misinformed or oblivious to the standard practices of online services.
Lastly, anticipate the emergence of tokens bearing names incorporating “AI” or “GPT” (which is already commonplace). Many cryptocurrency projects capitalize on the enthusiasm and limited knowledge of individuals who make decisions based on superficial associations. It is crucial to recognize that genuine AI developers do not endorse these contrived “AI plus crypto” tokens. However, the cryptocurrency sector often generates secondary-tier business models in the hope of repackaging them to appeal to venture capitalists. This practice includes rebranding existing cryptocurrency companies to market cryptocurrencies to consumers.
For instance, consider Helium, initially established as a wireless network for the “Internet of Things” trend in the early 2010s. With the support of specialized crypto funds, Helium’s team shifted their focus in 2019 to develop a crypto-based model that aimed to function as a “grassroots telco” by enabling the purchase of physical hotspots for acquiring network tokens (HNT). Unfortunately, the platform’s reputation was marred by questionable economics for wifi owners and indications of spoofing.
Another noteworthy example is Worldcoin, a venture backed by Sam Bankman-Fried and led by Sam Altman, which proposes a scheme to record irises in exchange for cryptocurrency or a similar concept. Encouraging individuals, especially those less privileged, to exchange their biometric data for cryptocurrency participation in a venture with dubious security practices can only be described as unethical exploitation.
It is essential to recognize that the primary value of bitcoin lies in its capacity to provide a censorship-resistant store of value that unites individuals globally. Cryptocurrency essentially functions as a budgeting tool, while AI endeavors to amplify and replicate human cognition. These two systems inherently operate at opposite ends of the innovation spectrum.
Tezos, co-founded by Kathleen Breitman, stands out as a prominent player in the cryptocurrency landscape. The opinions expressed in commentary pieces on Fortune.com solely reflect the authors’ viewpoints and do not necessarily align with Fortune’s official stance.
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