The Coevolution of AI and Blockchain
The following is an edited transcript of BullCaster Episode #21, a talk show produced by BullPerks and hosted by Constantin Kogan. In this episode they discussed with guest David Orban the coevolution of artificial intelligence and blockchain.
Constantin Kogan
Hello everyone, and welcome to BullCaster, the talk show for all crypto bulls. Here, we discuss the most exciting industry topics with the best industry experts, influencers, and remarkable personalities. I'm Constantin, the co-founder of BullPerks. We're excited to welcome our guest for today, David Orban, the Managing Advisor of Beyond Enterprizes, an AI and Blockchain advisory firm. David's technical background is in artificial intelligence, and he's an early adopter of Bitcoin. He is the author of "Something New," which focuses on the role of AI and how it changes society. As a frequent keynote speaker on the topic at conferences across the world, his personal motto is, "What is the question I should be asking?" We're really excited to have you here, David, thank you so much for joining us.
Could you tell us about your journey into AI and Blockchain? How did it all start?
David Orban
Both of these industries are incredibly influential these days and they are changing the world as we speak. However, many people don't realize that AI actually started 70 years ago or more. While I didn't start that far back, my journey in AI began in the previous millennium. Even then, we were experimenting with the tools that, through deep learning, transformers, large language models, and the power of neural networks, we are employing now. I was part of the team that designed Singularity University at the NASA Research Park about 14-15 years ago, where we study and teach how exponential technologies are changing the world. At the time I published a thesis about how this is leading to decentralization, and naturally, when Bitcoin emerged, decentralizing finance and payments while revolutionizing the financial infrastructure worldwide, it was the fulfillment of an expectation for me. That's why I recognized it as being very important and have been involved with it ever since.
Constantin
Can you explain to our audience how AI and Blockchain technology complement each other?
David
It's essential to understand that these are extremely broad and deep, infrastructural transformations. On one hand, Blockchain can be seen as the continuation of what in enterprise circles is called the digital transformation of the economy. While it's now fairly common not to turn bits into analog data and then fax them, only for an order form to be scanned back into a computer again, which is what happened in the 90s, many things still go through this highly inefficient journey rather than being digital and staying digital. Tokenization in the Blockchain industry is a process that will continue as long as there are things that can still be tokenized, whether they are shares of a company, pieces of real estate, or parts of the emerging digital economy that we are busy creating.
Similarly, AI is infusing intelligence into every process that previously required a human component to oversee, whether it even made sense. Often, our buggy software doesn't make much sense, so there was a lot of human effort needed.
These extremely important industries compete for computing resources, human talent, and financial resources. However, at the same time, they also collaborate in terms of developing new business models, finding synergies around data management, and overcoming the limitations of what we now call Web 2.0. There are countless ways that these two technologies and approaches are helping each other. An example is AI's ability to quickly analyze a smart contract and highlight vulnerabilities that could potentially elude human analysis.
Constantin
There are undoubtedly many applications and industries that could benefit from AI and Blockchain integration. Let's talk about specific industries that you believe are best suited to benefit from it in the short term, during the next five to six years.
David
One very natural application of Blockchain technology is in finance. There are numerous regulations that overwhelm the ability of crypto projects to be compliant in various jurisdictions due to rapid changes. What could be better than having AI tools supporting enhanced security, fraud detection, or improved regulatory compliance that all legitimate and reliable projects definitely need?
Another industry is healthcare, where we're already seeing significant advances in drug discovery and AI-assisted diagnoses by human physicians. This progress can be complemented by advanced data management practices, where Blockchain excels. Granular disclosures and tighter control on data can prevent abuses that might otherwise make healthcare applications less scalable and desirable, limiting their potential.
A considerable effort is underway to demonstrate that Bitcoin's network is not wasting energy, but securing the transition of the world towards a financial infrastructure worthy of the ambitions of the 21st century. At the same time, through its ability to disconnect any so-called mining activity from the grid when needed, it's making the grid more resilient. An AI algorithm can manage this kind of load balancing to the millisecond, providing a superior experience at a lower cost. We're already seeing examples of this in the field, where the smartest grids are utilizing Blockchain and AI.
Constantin
I've read research recently stating that, despite challenges, a significant portion of Bitcoin's energy consumption will come from renewable sources soon. There are specific options like hydroelectric power and many others. I think people need to do more research before criticizing.
A few weeks ago, Time Magazine published an article titled "Pausing AI Developments Isn't Enough. We Need to Shut it All Down." Elon Musk also expressed concerns about the future of AI, suggesting we should pause for some time. Do you agree with this notion that AI development must be halted?
David
The Future of Life Institute at MIT is the author of an open letter, and Elon Musk, Yoshua Bengio, and others, including myself, are signatories. The letter itself talks about something very specific. It says let's pause the training and deployment of next-generation AI because we don't fully understand the capabilities and potential pitfalls that may lie dormant in the current models. We cannot rush headfirst into the unknown. For example, if an iterative approach is possible with Elon Musk's rockets at SpaceX, you can learn from each failure until you have a working model. However, the same approach cannot be applied in this case, because we don't have a spare human civilization to replace the one we may end up destroying if we are not smart about deploying powerful AI, and proceed with our eyes closed.
The letter received a lot of attention. It is evident that the aims and ambitions of the article's author, Eliezer Yudkowsky, were laudable in the sense that he's vocal about highlighting the dangers. However, unfortunately, as he also admits, he doesn't have a solution because it doesn't seem possible to stop AI's progress. The open letter asks for something very specific that could be heeded if we were to decide together to allow, for example, regulators and policymakers to attempt to catch up. Even OpenAI, who did not sign the open letter, is asking loudly for regulators to please help them so that, hand in hand, these AI systems can be deployed, used, and improved responsibly.
Constantin
I was also listening to the Lex Friedman and Sam Altman podcast, a two-and-a-half-hour discussion in depth. I highly recommend it for anyone curious to learn more, as it raises many important questions related to what you were talking about. Friedman also has a conversation with Eliezer Yudkowsky about what you were discussing. It's a fascinating and somewhat scary topic, but at the same time, exciting. We live in interesting times.
As managing advisor of Beyond Enterprizes, can you explain a bit more about what the firm does and how it differs from traditional advisory firms?
David
Beyond Enterprizes was founded by my partner, Brad Yasar, and we work with projects in both AI and blockchain to help them succeed. This involves analyzing and then providing solutions to their needs in many areas, from tokenization and token development to developing smart contracts or software platforms, as well as digital marketing and building and maintaining enthusiastic online communities. Strategic Advisory is underlying all our services, coming from our very deep and broad experience. An important aspect is that all the senior partners at Beyond Enterprizes are entrepreneurs and operators with real-life experience. We are not career advisors with only theoretical understanding and smart recommendations that often fail when plans meet reality: we know what we're talking about, and we have a very diversified industry experience.
Beyond has clients in many different areas that we've helped through business development or understanding the right applications and business models they want to develop, from finance to the luxury market and many other industries. We have a relatively small number of clients each year, probably not more than 10. Over the past five years, our clients have gone from zero to over $4 billion of combined market cap.
Questions from the audience
Rafael Raju from YouTube
"What are the benefits of using Blockchain to power AI systems, and how can this be leveraged to create more secure and efficient solutions?"
David
Today's most popular AI platform is completely centralized, with OpenAI running on Azure Microsoft servers. We are either using it interactively as with GPT, or incorporating it into our programs through their API. We have to ask ourselves if that is the best way. If we really want to trust the heart of tomorrow's global infrastructure to a centralized solution. As it happens, there are other projects aiming to decentralize AI. I can mention one example: SingularityNET, where I am the chairman of the supervisory board. SingularityNET aims to create a platform for an ecosystem of AI applications in various verticals. There are already half a dozen projects running inside the SingularityNET ecosystem, representing an alternative to the centralized approach. I think that is a great way to make sure that the number of experiments we are running increases in the search for finding what really works.
Nakamoto-san from YouTube
"How do you think the rise of AI and Blockchain will affect the job markets, and what types of roles do you see emerging in the future?"
David
It's an important question because it's almost certain that the pace of change from these jolting technologies, which we're witnessing at an increasing rate of acceleration, is exceeding the rate of both individual and organizational adaptability. In biology and history, when that happens, things dramatically break. In the past, we had the lazy and convenient tool we called wars, which could create a clean slate. Whoever lost was wrong, and they were dead. The victors would write the history and create new norms. But with thousands of nuclear warheads, that tool is no longer available to us. So, we have to be really smart about creating a human-compatible future and potentially go as radical as rediscussing and reconvening around a new social contract, where my value is not exclusively linked to the economic output I'm creating. So that when I become jobless, society doesn't tell me to go and die in a ditch. The new social contract has to be inclusive to ensure a life and future dignity for individuals, who, if you ask them, know they are worthy. They must be enabled to build. This is a huge challenge. There are a few experiments: some people believe that universal basic income is the answer, while others talk about new ways of linking the ownership of robots and advanced AI tools, soft or hard robots if you wish, to the livelihood of people. We still have to find what will work, but it's becoming increasingly clear that what we have today does not.
Constantin
Concerning UBI, I'm a big fan of this topic. I researched it a lot. Peter Diamandis wrote to Elon Musk on Twitter about UBI, and his answer was something like, "No UBI before we get to AGI." It was a very interesting, concise, but deep answer if you think about it. We still have to research a lot of models before we even try them.
NFT Ninja from Twitter
"How can AI and Blockchain be used together to create more transparent and trustworthy supply chains? And what impact would this have on industries like food and pharmaceuticals?"
David
Similarly to the challenges in the financial area, manufacturing and supply chains suffer from a lot of fraud and opaque processes, with the additional challenge that, at least in theory, everything in finance today can be digital, except banknotes. Just as an aside, it's paradoxical that Blockchain, crypto, and Bitcoin are accused of facilitating fraud, while the best tool for that is still represented by good old banknotes. But back to supply chains and manufacturing, the additional issue is that they cannot, by definition, be digital only. If you want to look at it in a more detailed manner, it's the Oracle problem multiplied a billion-fold. How can you ensure the inputs to the system and the outputs correspond to your expectations? So while Blockchain can assure that after the tokenization part, the rest of the process corresponds to what you want, it cannot solve by itself the Oracle problem. That is where I would apply AI analytics and a careful understanding of what the lowest-hanging fruits are to show the power of this combination and let the best players in the system take advantage of what is possible. Chinese mothers today go to Australia to get infant formula for their children because they so profoundly distrust the Chinese food industry. That's a very powerful example of how deep the problem is, and we urgently need to develop better solutions.
Glitch Trap from YouTube
"What are some of the biggest challenges facing the co-evolution of AI and Blockchain, and how can they be overcome?"
David
Well, I believe in the power of technology, but until we have autonomous AI and robots mining the asteroid belt and building a Blockchain-based ecosystem that is potentially independent from Earth's concerns, one of the most important challenges we have is increasing the rate of learning that each passionate and talented individual can acquire in order to understand what is actually happening. Today I was sitting with my father in law, showing him the SpaceX Falcon rockets landing, and the Starship, and telling him that the first orbital flight is going to be, if everything goes fine with the FAA, next week. And how it is going to be capable of bringing 150 tons to orbit and 100 people to Mars, and an entire flotilla of 100 or 1000 of them is expected in 10 years to really start wave after wave, every two years, of Martian colonization. And he knew nothing about it. There are literally billions of people on the planet today who don't realize how rapidly the world is changing. So, thanks to people like you, who put in the effort to spread the knowledge, but also, I hope, bring the enthusiasm and the passion of what we can build together as a human civilization. That is an urgent and important task.
Mohamed Hussein from LinkedIn
"Can AI and Blockchain be used together to create more efficient and secure financial systems, and what impact could this have on the global economy?"
David
The answer is definitely yes. However, paradoxically, it looks like some regulators are not convinced that this shift is desirable. They are busy protecting the incumbents rather than letting the new system blossom and deliver those benefits. When computers on NASDAQ go on a weekend trip and shut down or go to sleep during the night, and you can't trade your shares, or when very reasonable transactions are blocked because of a completely opaque, by design, inscrutable financial system in the fiat on-ramps and off-ramps, the question is not if it can be made more efficient, but what is stopping us from reaping those benefits as fast as we can?
