BTC148: Bitcoin and AI w/ Guy Swann (Bitcoin Podcast)
Sep 20, 2023
01:36:10
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In this podcast, expert Guy Swann discusses the intersection of AI and Bitcoin. Topics include the decentralizing force of AI models, the need for immediate settlement in AI, and the implications of AI on identity. They also explore the challenges of applying AI in the context of Bitcoin and discuss investing in Bitcoin with River and self-custody with Foundation Devices.
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Quick takeaways
The future of AI will involve a diverse ecosystem of specialized models catering to specific needs.
Traditional KYC processes are becoming ineffective and a more efficient and secure method of authenticating identities is needed.
Self-hosted AI models will contribute to a more accessible and diverse AI landscape.
Establishing secure practices and being cautious of AI-driven scams is crucial as AI becomes more pervasive.
Deep dives
AI as a Specialized and Decentralized Force
AI is not a single general intelligence but rather a collection of specialized models. Each model focuses on a specific niche or task, such as detecting fraud in financial statements. Companies specializing in these specific areas can offer more targeted and efficient services compared to giant corporations. As AI models become more modular and accessible, a wide range of alternative services will emerge, catering to specific needs. Instead of relying on a single general AI, the future will see a diverse ecosystem of specialized models.
The Inefficiency of KYC
KYC (Know Your Customer) processes aimed at verifying identities and preventing fraud are becoming increasingly ineffective. The availability and low cost of personal information on the dark web make it easy for attackers to obtain IDs and credit card information. Additionally, technologies like AI can generate deepfake videos and images, making it challenging to trust digital identities. As API calls become more computationally demanding and costly, traditional KYC processes will face significant hurdles. The need for a more efficient and secure way to authenticate identities becomes crucial.
The Rise of Self-hosted AI
The future of AI lies in self-hosted models, where individuals and smaller companies can have their AI models that cater to their specific needs. Training massive models from scratch is a challenging and costly process, but adapting existing models to specific use cases is more cost-effective. The ability to build on previous work and specialize in specific areas will lead to an explosion of alternative AI services. This trend will contribute to the diseconomies of scale faced by giant corporations while providing a more diverse and accessible AI landscape.
The Challenges of Securing Digital Interactions
As AI becomes more pervasive, securing digital interactions and proving human identity becomes increasingly challenging. Old methods of CAPTCHA and identity verification fail in the face of advanced AI tools. The risk of fraud and manipulation grows, making it paramount for individuals and businesses to adopt secure practices. Establishing safe words or phrases for verification purposes and being cautious of unexpected requests or urgent situations can help safeguard against AI-driven scams and attacks.
Challenges with Traditional Financial Rails and Fraud Prevention
The podcast episode discusses the challenges faced by merchant services in dealing with credit card fraud and the limitations of traditional financial rails. The speaker highlights the constant struggle of preventing fraudulent payments, the high number of charges that need to be sorted out daily, and the financial repercussions of reversed payments, including fees. The podcast also contrasts this with the ease of accepting Bitcoin payments, stating that there is no infrastructure or methodology to handle fraud in Bitcoin transactions. Overall, the episode emphasizes the need for more effective solutions to combat fraud in traditional financial systems.
The Delayed Settlement of Traditional Payment Systems
The podcast delves into the delayed settlement process of traditional payment systems and the challenges it poses, particularly in the context of AI-powered services. The speaker highlights the inefficiency of waiting 30 days for payment settlements, which hinders scalability and poses risks to businesses. The analogy of delivering a product and waiting 30 days for payment is used to illustrate the impracticality of this system, especially in the context of AI requests that can occur rapidly and at high volumes. The episode raises the need for immediate settling money in order to avoid clawbacks and improve the efficiency of payment processes.
The Potential of AI in Redefining Processes and Innovation
The podcast explores the potential of AI, particularly language models (LLMs), to revolutionize industries and how we think about processes. It highlights the capacity of AI to specialize, adapt, and improve existing systems. The discussion focuses on the benefits of training and retraining models in specialized contexts, as well as the value of open-source platforms like hugging face for sharing and improving models. The episode also delves into the notion of AI enabling us to reflect on our own thinking, identify logical fallacies, and reconcile conflicting beliefs. It emphasizes the potential for disruptive and transformative innovation in AI, stressing the need to adapt to rapidly changing technologies.
Preston Pysh and Guy Swann's conversation covers the fascinating attributes about AI, the counterintuitive nature of AI and how the need for specialized models will create a rich ecosystem of decentralizing forces around countless models and resourcing requests.
IN THIS EPISODE, YOU’LL LEARN:
00:00 - Intro
01:24 - What is at the intersection of AI and Bitcoin?
19:12 - How AI is able to synthesize enormous amounts of information.
30:29 - Why AI models are actually going to be a decentralizing force.
32:37 - What incentives will attract the most data?
40:06 - Why training models from scratch isn't the most optimal path.
52:52 - Guy's thoughts on Sam Altman's World Coin.
01:03:58 - Why identity and AI are becoming a paired combo and how to avoid it.
01:03:58 - Why immediate settlement is a necessity for AI.
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