Crypto+AI The Cryptocurrency Narrative of the Next Bull Market

Crypto+AI Next Bull Market's Cryptocurrency Narrative

Author: Kerman Kohli, Founder of DeFi Weekly; Translation: LianGuaixiaozou

If there’s one thing I’ve learned from my years of experience in crypto, it’s that this market is largely driven by narratives. I break it down from the smallest atomic unit to a larger macro perspective:

· Stories that people can understand

· Beliefs formed around these stories

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· Memes that encapsulate these beliefs

The smallest atomic unit has to make sense and be robust, so you can build a lot on top of it. Let’s review the historical applications of this framework:

2022

· There’s a huge yield market that only banks can profit from;

· If banks are evil, crypto is a better alternative system;

· Crypto is a way to earn high interest rates in USD.

2017

· Governments are preventing regular people from investing in big companies;

· Wealth creation shouldn’t be limited to accredited investors;

· ICOs are the new IPOs for wealth creation.

The form hasn’t changed, only the features, narratives, and characters. Each cycle brings new heroes and villains. Just make sure you don’t become the main character. Your chances of survival decrease when you draw more attention to yourself.

So far, crypto has been around for over a decade, and everyone is wondering: what’s next? You can’t keep using the same narratives because those stories have had bad endings (Terra/Luna/FTX, ICO scams, etc.). This isn’t to say they’re bad! Each cycle brings more talent, resources, and scale to the crypto economy. But unless there’s a meme that resonates with regular people and strengthens their belief system, they won’t come back to crypto.

If I have one regret about the past, it’s that I didn’t align my beliefs with my reputation, and I regretted it later. Recently, my views have gained recognition from many people, and I think, unlike before, I’m committed to this. Who knows, I might be wrong! But at least I can look back and understand why I was wrong or what I overlooked.

Without further ado, let’s dive into the bull market narratives for 2024-2026.

1. Crypto + AI

What has surprised me in the past few months is how the whole world is rapidly embracing artificial intelligence, especially those big companies. This essentially means that most people in the first world are directly or indirectly using AI in a very real way. I may not need to provide enough evidence to further illustrate these events, as you’ve probably googled them and your Twitter feed is full of them. I have two strong arguments for this, so let’s take a look at them one by one.

2. Money on the Internet

Given that we know that our collective consciousness has been taken over by artificial intelligence. What do we think will happen next? Now, you simply integrate AI into your tools.

The next step in this development process is the rise of AI agents. Use your data on your tools that you train. AutoGPT, BabyGPT, and countless other projects are already moving in this direction. This technology is still not advanced, but considering what we know today and what people want, it is not yet possible to reach an advanced stage. AI agents will allow you to automate most of the workflow. The ChatGPT plugin is already a simplified version of the agent, where you can:

· Express your intent to LLM

· Use it to find suitable action plans

· Take action

If you disagree with my point of view, please correct me, but the logic above is relatively sound, and the probability of failure is very low. Well, then what is the most powerful energy that people want to express behind their intentions? Money – the universal energy adapter. People’s intentions are based on money. If you’re still confused, here are some simple examples:

· “Bet $100 that the Los Angeles Lakers will win Saturday’s game.”

· “Find the best articles about the Trump election and pay up to $20 per month for any paid website or program you encounter.”

 · “Purchase the frequently purchased items on my shopping list and deliver them to my door before Friday night, paying up to $30 for delivery.”

None of these intentions can be realized on the existing banking track. Why? Let’s start with the small things:

· The person who actually makes the purchase is not you, but an AI agent.

· If the agent makes the purchase on your behalf, it means that you haven’t actually authorized the transaction directly (your AI has).

· If someone else makes a purchase on your behalf, it means your fraud/refund risk will skyrocket.

· No one in the stack is willing to take this risk because they will be in trouble.

The only way to solve this problem is to set up a checkout process in the chatbot, forcing you to enter your credit card in the chat window. Or, people can easily say:

“I didn’t buy it! It was my AI that went out of control and bought it for me! I want a refund because I didn’t authorize this transaction!”

What will the bank do? Refund the money. What will the merchant do? Ensure that they don’t allow AI-driven transactions to happen again because they cannot verify who authorized the transaction. As I was writing this article, I was also thinking, what is the closest analogy to this?

My answer is: Kids using credit cards.

LLM is basically like your child using your credit card. As mentioned earlier, it is already a gray area when your child uses your credit card. Apple has invested a lot of infrastructure in the App Store for this. The bottom line of such cases seems to be: consumers are always winners. Merchants will eventually pay.

This is not a problem with “Stripe”, but a problem with regulation and banks. In order to prevent this from happening, banks and payment service providers will refuse to use LLM to represent you in transactions, creating a more cumbersome user experience!

So what is the alternative? You may already know. That is cryptocurrency. Internet-native currency, without intermediaries, can be accessed via APIs.

Think again, how do you verify that you have authorized a transaction with a credit card? Can you just enter the correct number on a plastic board and verify it? It’s a joke. If you sign with a private key on the correct invocation data, it should be enough. Everything else can be forged. LLM needs encryption, especially in terms of money.

All of a sudden, a brand new LLM will appear. Guess which one, the user who uses the cryptocurrency track or the one who uses the traditional banking track, will have a 10 times optimized user experience. You guessed it right. Code needs assurance, callbacks, and completion. Credit cards don’t provide these, but cryptocurrency does.

The entire industry will revolve around AI intelligences that use cryptocurrency and cryptocurrency companies that support AI intelligences. Autonomous computation will satisfy each other.

This is my view on one side, perhaps the strongest side. Let’s look at the other side.

3. Internet Identity

Perhaps it is not so obvious to some people, but the existing system has begun to show cracks. Let’s start with this statement: the identities on the Internet that we know of have been broken.

– Phishing scams conducted via email are becoming increasingly difficult to detect (even for those who are experienced and highly skilled).

– Deepfakes are becoming increasingly difficult to distinguish from real photos.

– It is difficult to determine the authenticity of most digital content that conveys senses (visual/auditory).

– In a world of big data models, it is increasingly difficult to determine the ownership of ideas.

All of these problems can fundamentally be summarized into the following points: proving who you are in a foolproof way on the Internet is really difficult. Email addresses have issues (phishing), phone numbers are not the best method (SIM card swapping), and soon audio/video methods will also become more difficult. If there is a reliable method, it is the one we already know:

– The public key that represents your identity

– Ensuring that you control the private key of that public identity

Considering the cryptography and mathematics that support these structures, there is nothing more suitable than this. Until the discrete logarithm problem is solved, which is a problem for the next decade, quantum computing will shine.

So what’s going on here? Essentially, everything is becoming “web3ified” because you can use private and public keys for identity verification on the internet through encrypted native services. As information is transmitted, hardware, software, and users will need keys to create a series of verifiable identifiers. This will be increasingly difficult to achieve as it will originate from underlying hardware, but the story could continue to evolve in this direction. iOS and Android already support LianGuaissKeys, so major tech companies have not overlooked this issue. In fact, they are more likely to drive this innovation! The future I envision should be like this:

Your phone has a public key that confirms its identity.

You have your own public key to confirm your identity.

Any app you use to transfer photos/videos has its own identity.

Any content on your phone will have a series of public keys to track its source with encryption verification.

In this direction, I have more content that can be expanded, but I am not yet clear about the path and timing, although I believe this will be a compelling narrative that people can support. Autonomous network identity.

4. Conclusion

A lot has happened in the field of AI in the past few months, otherwise I would not have been able to form these views. It is a unique new path that opens up possibilities for the future reality. AI is at a historical high, while cryptocurrency is at a historical low. Imagine that in the next 12-18 months, as cryptocurrency rises and AI declines, the two intersect on a sine wave. I may be wrong about the timeline, but I am confident that the logical chain I described above has solid reasons to withstand the test of time.

We have always known that buying coffee with cryptocurrency makes no sense, and the same goes for the real world. However, the impact of cryptocurrency on the native internet economy has always been evident. Artificial intelligence just makes this more apparent because AI agents operate on the internet first and foremost.

If you believe in the content above, what do you want to do today to participate in tomorrow’s world?

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