VC David Pakman Makes the Case Why AI Needs Crypto
Dec 9, 2023
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David Pakman, Managing Partner and Head of Venture Investments at CoinFund, discusses the recent rise of Bitcoin, the evolution of crypto investments, and the benefits of blockchain platforms. He also highlights the differences between the Federal Reserve's instant payments plan and stablecoins. In addition, they explore Sindri, a company enabling blockchain scalability, and the specialized knowledge required for zero knowledge proofs.
Stablecoins streamline global remittance, indicating growing demand for digital assets.
Web3 enables decentralized AI and ownership of intellectual property, creating fair platforms.
Deep dives
Crypto market adoption and growth: Stablecoins and institutional interest
Crypto has seen significant growth and adoption, with stablecoins playing a major role. Stablecoins offer a low-cost and quick way to send money globally, without the need for traditional banking hours. Companies like PayPal and Coinbase are now using stablecoins to streamline global remittance. Additionally, traditional financial services companies are making it easier for consumers to buy Bitcoin and Ethereum on the stock market, indicating growing demand for digital assets. While the price of Bitcoin may fluctuate, the long-term trend suggests that cryptocurrencies like Bitcoin, Ethereum, and Solana are likely to increase in value over time.
Decentralized AI and the potential of Web3
Web3 aims to create decentralized versions of AI components, such as training resources, data collectives, and model creation and inference. This allows for ownership of digital art, music, or other intellectual property in a way that was not possible before. Blockchain-based platforms like Jensen are offering decentralized training resources, where participants contribute GPU power and are rewarded with tokens. Similarly, data collectives reward contributors with tokens for sharing their words, images, or sounds for training data sets. The concept of decentralized AI offers the potential for more durable and fair platforms that are not controlled by a single entity.
The path towards more transparent and user-owned platforms
Crypto aims to address the frustration of users relying on centralized platforms that can revoke APIs or shut down, compromising thousands of companies. Web3 proposes the creation of platforms with APIs that cannot be revoked, as users actively participate in the network's governance. This more democratic and fair governance system aims to ensure durability and avoid the sudden risks experienced by centralized platforms. Additionally, crypto advocates for ownership of intellectual property through NFTs, allowing digital scarcity and ownership of art, music, and other creative works. While NFTs went through a hype cycle, the market is seeing a renewed interest with innovative projects combining physical and digital assets.
The state of crypto investing and future outlook
The crypto investment space has seen a constriction in capital, but recent months have shown an increase in deal flow, particularly at the seed stage. Despite the volatility of crypto assets, long-term investors focus on the potential value growth over the next five to ten years. Key factors driving adoption include the availability of stablecoins, the launch of Bitcoin ETFs, and the increasing usage of crypto for remittance and other financial services. As more investors and traditional VCs enter the crypto space, it is expected that collaboration and capital will continue to grow.
Connie & Alex talk to David Pakman, Managing Partner and Head of Venture Investments at CoinFund, about why the crypto market is suddenly hot again and how crypto and AI can work together.
Music: 1. "Inspired" by Kevin MacLeod (https://incompetech.filmmusic.io/song/3918-inspired) 2. "Blippy Trance" by Kevin MacLeod (https://incompetech.filmmusic.io/song/5759-blippy-trance) 3. "Dream Catcher" by Kevin MacLeod (https://incompetech.filmmusic.io/song/4650-dream-catcher) 4. "Pamgaea" by Kevin MacLeod (https://incompetech.filmmusic.io/song/4193-pamgaea) 5. "EDM Detection Mode" by Kevin MacLeod (https://incompetech.filmmusic.io/song/3687-edm-detection-mode)
License: https://filmmusic.io/standard-license
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