We’ve been getting a lot of questions about Bitcoin, cryptocurrency, and blockchain technology ever since Bitcoin’s price jumped up over $4,000 in 24 hours on the news that the SEC is likely to approve a Bitcoin ETF.
Cryptocurrency has been an extremely volatile asset during the entirety of its existence. Bitcoin has made plenty of millionaires, but it has also made its share of victims.
In a lot of people’s minds, crypto is synonymous with scams. The collapse of FTX under Sam Bankman-Fried solidified that assumption, despite that being a case of good old fashioned low-tech fraud. The turmoil that crypto faced in 2022 also included the sudden and devastating collapse of Terra’s stablecoin, LUNA. These two disasters destroyed the last of the “get rich quick” shine off of cryptocurrency.
Prices on most of the major cryptocurrencies like Bitcoin and Ethereum more than halved. But then something interesting happened…
They stabilized.
Since June of 2022, the crypto market has actually been kind of boring.
Bitcoin and Ethereum recovered some of their value a month or so after the fall of FTX and both have been doing the crabwalk up until the recent rally.
This presents a few interesting questions…
If cryptocurrencies lose their volatility, will the scammers lose interest?
And if people aren’t getting rich overnight off of crypto, what purpose does it serve?
To answer the first question: new technology is almost always front-run by scammers. There’s a lot of money to be made and limited understanding, which is a dream scenario for con artists. We’ve even seen it to some extent with artificial intelligence, as people stretch the definition of AI in order to oversell products that basically have nothing to do with the recent advancements with the technology.
The second question is easy to answer. Blockchain technology is actually extremely useful, especially if you stop viewing it exclusively as a get-rich-quick investment.
Crypto’s trials and tribulations may have actually forced it to grow up in time to take advantage of its tech trend successor of artificial intelligence.
Worlds Collide
There is quite an opportunity for this new post-FTX “grown up” version of crypto to take off right alongside the meteoric growth of artificial intelligence. The concerns with AI are addressed nearly perfectly with many of the key features of blockchain technology. And vice versa.
Most important among those concerns?
Transparency.
President Biden just signed the first of what will likely be multiple executive orders regarding the regulation of artificial intelligence development. The key point of this EO was that developers must share their programming and testing data with the government. This forced transparency has been featured in many proposed solutions to controlling the advancement of AI.
Blockchain technology is practically tailor-made for this purpose.
As an immutable and decentralized ledger, blockchains are perfect for keeping massive amounts of data in a place where it can be seen by all and owned by none.
Not only does this increase accountability, where all data is recorded and kept under the same conditions, not allowing any exceptions, it also improves accuracy and efficiency. The data used to train the Large Language Models for AI programs needs to be accurate and trustworthy, so keeping that data on a public ledger will allow the real-time review of these massive datasets.
This is just the most urgent way that these two technologies can complement each other. But there are many others…
AI is learning at a previously unimaginable pace, but experts are still trying to solve the issue of AI chatbots giving incorrect answers, or “hallucinating”.
The automated but overeager learning of artificial intelligence needs a powerful automated fact-checker. Blockchains are built for one purpose above anything else: authenticating.
It’s as if the technology is made for each other.
Author: Ray Blanco
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