AI + Blockchain = the answer to everything? This week we pour gallons of water on AI/Blockchain projects, look at how to navigate the space and get a peak into how sarcastic I can be.
Also, Cloudy will be taking a vacation the next two Saturdays to the Santa Fe/Portland/Seattle area. Recommendations are welcome! Expect many words when I come back.
This past week in New York was BLOCKCHAIN week. Not exactly sure who designates when blockchain week is, but to give you an idea of the excitement, Coindesk had their annual blockchain conference “Consensus” where 8,000 people paid somewhere around $2,000 to attend the conference. Attendance is similar to the rise of crypto prices as Consensus attendance is up 300% from last year and up 20x since 2013.
In honor of blockchain week, I thought this would be a good time to talk about the intersection of blockchain and AI, because when you put two hyped technologies together, you can do ANYTHING!!!
Doing some homework
I spent a bit of time this past week diving into different blockchain projects that involve AI, and landed on these three categories:
• Complete garbage
• Does this really need to be on a blockchain???
The complete garbage camp
It becomes apparent very quickly that a lot of these AI/blockchain projects are garbage and will fail. I’ve seen everything from “Decentralized Robots” to “Smart Contract Control of AI as a Serivce” (yes, they spelt service wrong, and I have no idea what it means). Some claim to be able to create cutting edge machine learning, just because it is on a blockchain, which also makes no sense. One of my favorites is someone claimed to be a world class expert in “Decentralized AI Networks and created the Blockchain + AI movement.” If I put my ice cream consumption on the blockchain, does that mean I created the Blockchain + ice cream movement?
(In full blockchain transparency, I ate ice cream on Sunday, Mint Chocolate Chip from Van Leeuwen, so that should be the first entry to the ledger. Then the second entry would be on Wed, when I did the same thing. I can see my ice cream token value rising already)
One company even has a nice image where users can earn credits be allowing what app data they want to post to the blockchain. I can’t wait to give a blockchain all of my photo, genetic and banking data, but ABSOLUTELY no one can know what I watch on Netflix…
Just Decentralize It!
Then there are companies that fall into the camp of “Does this really need a blockchain?”
The highest profile case of this is a company called Numerai. Numerai is essentially a crowdsourced hedge fund. Data scientists signup to be part of the platform and are sent encrypted data to build models and make predictions about the prices of certain financial assets. For their work, they are compensated in Bitcoin and Numerai cryptocurrency, which the users get in proportion to how accurate their results are.
While Numerai has been covered by Wired and Fortune, but many things jump out as being flawed. First, since users are being sent encrypted data, they don’t actually know what the data is. Numerai says the data is encrypted so the data scientists don’t run off with the data and build their own models. The problem with this is users can’t make new variables like if it is a holiday, or combine the data with other data sources. All the data scientists are doing is making machine learning models in the dark which is essentially the OPPOSITE OF GOOD DATA SCIENCE PRACTICES.
The only blockchain component is that users are getting paid in Bitcoin and Numerai, which sounds like it is trying to skirt around employment and securities laws, instead of harnessing the blockchain. Numerai could pay people in this boring thing called US Dollar, but where is the fun in that??? There is actually a company that does the already, called Quantopian, but since they don’t pay you in Bitcoin, why would anyone want to sign up?
The one interesting idea that keeps coming up is a decentralized data marketplace. An example is a company called the Ocean. The Ocean allows anyone to put data/buy data off the blockchain and users submitting data can be compensated for what they put. An interesting prototype the Ocean built was a marketplace for autonomous car data. Their argument is instead of car manufacturers generating their own driving data, why not pool all of the data together on a blcockchain so everyone can access it?
Technically you could put this in the “Does this need a blockchain camp?”, but what I find interesting about this is it reverses the current trend of AI, where a select few companies have massive data sets. By flipping this around and decentralizing data, more companies have a chance to compete in the space. Of course, data is what gives these companies a competitive advantage, and they would never say “Yea, lets give the data away for the greater good!!!” but still…
Complete collapse of the cryptocurrency market could help
One blockchain event that could actually help the AI sector is a collapse of the cryptocurrency market. Many of the highly valued tokens are mined using hardware called GPUs, which caused the price of GPUs to spike in December, when cryptos were at an all time high. GPUs are the de facto hardware choice of machine learning researchers to build complex models, but cost a fortune. If prices collapsed, mining farms may be forced to sell their GPUS, flooding the market with this hardware and making it affordable for AI researchers.
Price of a GPU from its peak in December
One cryptocurrency could positively benefit from a collapse in GPUs. Golem, a decentralized cloud computing crypto, could see miners list their GPUs on Golems product to recoup some of their costs. While the value of the Golem token may go down with a broad sell off, at least people would actually be using a blockchain
At the end of the day
If you see an AI/Blockchain project that you want to invest in, ask yourself does this really need to be on the blockchain, will companies ever participate in this, or is it complete garbage?
It’s probably the latter.
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