Why I'm Bullish Decentralized AI
From a pragmatic point of view, as someone who knows nothing about AI
Happy Thanksgiving everybody! I hope ya’ll are as excited as me for the best time of the year. Have a good one! <3, Kyle.
I want to preface this note by saying that I’m not knowledgeable about AI at all. Sure, I’m familiar with the high-level overview of how it works, but ask me anything technical and I’m at a loss for words.
This note is, instead, an attempt to convey how I think about trends and narratives in crypto and has nothing to do with the tech itself.
Naturally, your reaction will be something along the lines of: “Wtf? If you know nothing, why are you writing an article on this?”. Well, because I believe that the cryptocurrency industry is built on the bedrock of dreams and speculation, rather than fundamental truths.
In fact, this Truth itself is why we have valueless governance tokens at billions of dollars in market-cap. It’s why we have so many new AMMs, Layer 2s, Monolithic Blockchains, Decentralized-As-A-Service, etc. - all these new fugazi schemes, every month of every year.
It’s Truth with a capital T. In uttering this foundational statement that forms the cornerstone of our industry, I’m saying the quiet part out loud. I want you to remember this Truth - for this statement forms the fundamental axiom of belief for many of us in crypto.
And so - how does this relate to decAI? Well…
“Do you want to be right, or do you want to make money?”
This statement is often asked in Telegram group chats or Discord group and is normally preceded by someone posting a shady Dexscreener link to a copy-cat product that has been done 200 times.
The crypto participant in his natural habitat cares not for originality or growth - he only cares for the “potential” of the product. AMM model that has been done 20 times launching a token? Add an “incredibly well-known founder” behind it and it becomes an irresistible dessert for the crypto participant.
The figure above best describes the crypto market - an amalgamation of “narratives”. And what is a narrative but a figment of the collective unconscious, all wishing together for something to be true?
If tomorrow, everyone says “USDC is going to depeg” - it becomes a self-fulfilling prophecy. And this cycle has played out in crypto time and time again - from stablecoin depegs, to narratives that are willed into existence. All aboard the SOLUNAVAX train, anybody?
I’m not saying anything new. All I’m saying is that crypto is THE ULTIMATE speculative asset class, and prices are very much driven by narratives and attention. I’ve done my best to hammer this point home - why? Because you really have to understand this in order to understand WHY decAI will succeed.
What Makes DecAI A Good Narrative
In choosing an asset that you think will outperform BTC/ETH, you have to look at a couple of factors - most notably, whether something has “sustainable mindshare”. I’m not talking about projects that reach stardom and die quickly after (e.g Telegram bots, Canto, etc.)
No; In choosing an outperformer, you have to choose a token of a group that you know will constantly see headlines. A few top contenders I’ve seen so far are Solana and LSTs - but… I’m sure you know where this is going.
DecAI will be the one narrative to rule them all.
Why? Just because it’s new? Yes - that’s part of it. In being new, there can be no bagholders from previous cycles - no forced sellers.
But not just that - it’s much bigger than that. DecAI is hope, renewed. In past cycles we’ve always had some sort of core technology to rally around - in 2017/18, it was ICOs. After that, it was NFTs and the “Decentralization Of Everything”.
The world is now aware of our tricks. They’ve come to understand that anything with the word “token”, or “decentralized” is a sham. It’s hard to overstate how bad our reputation is to the average retailer because it just is that bad.
This all changes with decAI. I believe that decAI will be the core technology that people rally around in 2024/5. “But Kyle, doesn’t decAI have the word ‘decentralized’ in it? That totally destroys its relevance, no?”
Ah, my observant one. Yes, it does - and perhaps I wouldn’t be as bullish on decAI if not for what happened in the past two weeks. You see, I believe the shakeup at OpenAI has brought so many more eyes to the importance of decentralization, that it’s slowly becoming a word that’s less associated with crypto, and more with - well, what it originally meant to be.
Decentralization is now being seen as a “movement”, separate from the identity of “cryptocurrencies”. For the most part, “decentralized XXX” is still viewed with massive scepticism. But when you put AI in front of it, you suddenly have “product-market fit”.
DecAI is starting to grow its own identity, separate from its roots in crypto. This is a necessary growth step for any narrative to reach terminal velocity - it must take on a life of its own. It must be the rocket ship of hopes and dreams, and it cannot carry any phantoms of the past with it.
DecAI Will Form The Core Of 24/25
To sum it up, there are two things that make the decAI narrative worth pursuing.
First is the incredible bullishness of AI as an industry. This was always going to be the overarching narrative of the world going into the next decade, from a purely objective standpoint.
Second, is the legitimacy of decentralization in the context of AI. All of a sudden, crypto may find a use-case that people can rally around.
Now, you may think this whole article to be fugazi. To base your investment thesis of off “attention”, “narratives”, and “what people are thinking”? Nonsense!
All I have to offer, are these two pictures:
Who would have known - that something “valueless” can turn into something “of value”, just by capturing “mindshare” over the past 15 years? Ah…
"Imagination is more important than knowledge. For knowledge is limited, whereas imagination embraces the entire world, stimulating progress, giving birth to evolution. It is, strictly speaking, a real factor in scientific research." - Albert Einstein
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