Key Insights: AI, Crypto & the 2020s
• Our digital future will increasingly be defined by the interplay between AI systems and crypto
• The recent advances in Large Language Models (i.e. “The Transformers”) are staggering – paving the way for a new
generation of “platforms” built on text as the universal interface
• The Transformers are beginning to proliferate while the “self-sovereign data” movement is still in its infancy;
another decade of platforms with more concentrated value-capture & limited compensation to data creators
• I see three separate stages of AI and crypto interaction going forward – from the obvious to the increasingly
speculative, yet essential:
o “The Obvious”: existing machine learning solutions computed over expanding on-chain datasets.
Examples include undercollateralized lending, on-chain targeting, and more targeted community
formation & governance
o “The Acceleration”: co-opting large natural language processing models to enhance smart contract
development speed and security, leading to an inflection in on-chain data and new insurance “+” business
models
o “The End Game”: the realization that Transformers will likely be subject to the same power laws which
govern software and internet aggregators. A new internet substrate – with scale, tiered-access, and
community governance – will be essential to expand on-chain adoption and broaden use-cases to a level
which can demand compensation from the dominant Transformers in each vertical
Hope you enjoy,
Rawson
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Prior reports can be found at reflectiondigital.substack.com.
RISE OF THE TRANSFORMERS (Sept 19, 2022)