Opinion Markets
December 29, 2023

Pantera Capital’s Cosmo Jiang Predicts ‘Crypto and AI Convergence Key to Mitigating AI Risks in 2024’

In Brief

Cosmo Jiang, Portfolio Manager at Pantera Capital shared insights on the potential of intersection between cryptocurrency and AI, for 2024.

Pantera Capital's Cosmo Jiang Predicts 'Crypto and AI Convergence Key to Mitigating AI Risks in 2024'

Contrary to its past struggles, Bitcoin has recently defied expectations with a formidable 130% rebound in 2023, positioning itself as one of the standout performers among major assets this year. As the year draws to a close, Bitcoin’s resurgence prompts a critical examination of prevailing market assumptions.

In a stark departure from conventional approaches, the convergence of cryptocurrency and artificial intelligence (AI) is steadily emerging as a transformative force to effectively mitigate AI risks anticipated in 2024.

Recently, crypto asset management firm Grayscale contended that the intersection of blockchain technology and AI holds the potential to revolutionize the landscape by addressing significant concerns surrounding AI advancements.

This challenges existing paradigms, asserting that blockchain technology can serve as a powerful tool to combat societal risks stemming from AI, including the alarming proliferation of deep fakes, bots and misinformation. The report contends that decentralized computation protocols, in active opposition to centralized control, are instrumental in managing potent AI models, especially those wielding sensitive personal information.

In a recent conversation with Metaverse Post — Cosmo Jiang, Portfolio Manager at Pantera Capital, highlighted the transformative potential of the intersection between cryptocurrency and AI, and shared his outlook on the same for 2024.

Pantera Capital’s Cosmo Jiang contends that prominent investment firms are progressively acknowledging the strategic convergence of public blockchain and AI technologies. He articulated the transformative potential, asserting that blockchain offers a paradigm shift by facilitating centralized control over robust AI models entrusted with handling sensitive personal information.

As traditional boundaries blur, the intersection of cryptocurrency and AI emerges not merely as a speculative venture but as a strategic avenue for innovation and control.

“AI is a powerful technology, and to have control centralized amongst so few large tech companies is potentially dangerous. That’s why in the wake of the OpenAI situation, we’ve seen a surge in interest in decentralized approaches to AI development, powered by blockchain technology,” Pantera Capital’s Cosmo Jiang told Metaverse Post.

“I believe the superpower of crypto is using token incentives to coordinate a decentralized group of actors. Bittensor is one such protocol that is using token incentives to coordinate an open-source AI model development platform – in other words, an open-source alternative to OpenAI coordinated over a blockchain,” he added.

Crypto Projects Propelling the Future of AI

Highlighting promising crypto projects, Pantera Capital’s Jiang detailed the standout features of Akash Network, Render, Worldcoin and Bittensor.

Render and Akash, known as the “Decentralized AWS,” utilize token incentives to connect compute providers with end-users, addressing the acute compute supply shortage hindering AI growth. Likewise, he asserts that Bittensor is emerging as a decentralized alternative to OpenAI, fostering an open-source AI model development platform through token incentives.

“This is a solution to one of the most acute issues holding back the growth of AI today – which is the compute supply shortage caused by surging AI-related workload demand at the hyperscalers like Amazon, Microsoft and Google,” Pantera Capital’s Cosmo Jiang explained. “Open-source AI models have the potential to be a better source of intelligence than “walled garden” permissioned and siloed models by lowering the barriers to entry for contributors, reducing the friction for compounded learning, and allowing for community-driven decision-making on AI alignment.”

Moreover, Worldcoin — with its identity database using cryptographic proofs, addresses the growing need to verify unique personhood in the face of AI-generated content.

“Worldcoin is different and better than any government database in that it is fully digital, a globally consistent standard, and is resistant to any centralized entity’s censorship (inappropriate or otherwise). Worldcoin is bootstrapping adoption by offering token incentives to users who sign on, and in doing so has already onboarded around 5mm people,” Jiang added.

Pantera Capital’s Strategic Positioning in the Crypto-AI Convergence

Expressing optimism about decentralized AI‘s future, Jiang shared that Pantera actively supports entrepreneurs at the crossroads of AI and crypto. Having invested in Bittensor, he added that Pantera’s commitment aligns with fostering open-source AI development and supporting sustainable monetary incentives for contributions.

“I believe AI and crypto standout for their disruptive potential and I expect them to converge in many ways. We have already deployed meaningful capital into companies at the intersection of AI and crypto and are actively canvassing the space to surface new opportunities. Our investment, platform and technical research teams have dedicated resources to help accelerate growth at these portfolio companies,” said Jiang.

He also shed light on the factors influencing Pantera’s investment in Bittensor, emphasizing the novel token incentive mechanism addressing the massive market of AI model creation and usage. The investment aligns with Pantera’s broader strategy of supporting open-source development within the blockchain ecosystem, drawing parallels with the early days of the Bitcoin community.

“Open-source development and adoption has been gaining traction for both cultural reasons as well as the practical reason that open-source has the potential over time to produce better AI models than exist within the walled gardens like OpenAI or Meta,” Pantera Capital’s Cosmo Jiang told Metaverse Post. “We are excited about opportunities at the convergence of AI and Crypto in 2024.”

In a rapidly evolving landscape, Pantera Capital’s bullish stance on the convergence of blockchain and AI reflects a paradigm shift, and aims to address challenges and opportunities at the intersection of these transformative technologies.

Disclaimer

In line with the Trust Project guidelines, please note that the information provided on this page is not intended to be and should not be interpreted as legal, tax, investment, financial, or any other form of advice. It is important to only invest what you can afford to lose and to seek independent financial advice if you have any doubts. For further information, we suggest referring to the terms and conditions as well as the help and support pages provided by the issuer or advertiser. MetaversePost is committed to accurate, unbiased reporting, but market conditions are subject to change without notice.

About The Author

Victor is a Managing Tech Editor/Writer at Metaverse Post and covers artificial intelligence, crypto, data science, metaverse and cybersecurity within the enterprise realm. He boasts half a decade of media and AI experience working at well-known media outlets such as VentureBeat, DatatechVibe and Analytics India Magazine. Being a Media Mentor at prestigious universities including the Oxford and USC and with a Master's degree in data science and analytics, Victor is deeply committed to staying abreast of emerging trends. He offers readers the latest and most insightful narratives from the Tech and Web3 landscape.

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Victor Dey
Victor Dey

Victor is a Managing Tech Editor/Writer at Metaverse Post and covers artificial intelligence, crypto, data science, metaverse and cybersecurity within the enterprise realm. He boasts half a decade of media and AI experience working at well-known media outlets such as VentureBeat, DatatechVibe and Analytics India Magazine. Being a Media Mentor at prestigious universities including the Oxford and USC and with a Master's degree in data science and analytics, Victor is deeply committed to staying abreast of emerging trends. He offers readers the latest and most insightful narratives from the Tech and Web3 landscape.

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