AI and Web3 | Mohamed Fouda & Qiao Wang of Alliance

Transcript

bankless Nation we have an exciting topic for you today you knew it was coming we had to talk about artificial intelligence that is AI and crypto and their intersection are there investable opportunities here for us we've been talking so much David about uh AI safety AI alignment AI Doomer type scenarios that we haven't given this enough attention and the truth is regardless of the long-term consequences and uh you know the safety that we need to to get right there are actually some investable opportunities in Ai and there's some intersection between crypto and Ai and so we're going to talk about that today you know what's interesting about this round was this was actually this

question is like what does the intersection of AI and crypto look like the impetus for our original aliaser episode that's why we did that yeah then we got it's massively sidetracked with a uh the AI is going to repurpose the atoms but um before they repurpose our atoms they are going to produce new opportunities for us so on the way of getting our atoms repurposed or not uh we are going to discover what those opportunities are but before we tease who's coming on the show and the blog post they've write and all the ideas that they are about to bring to the table we first want to tell you about swell because it's liquid staking is also going to be a thing that is a thing before the ai's repurpose our atoms and Swell wants you to know that

they're staking as a service protocol is up and running and you can be an early Staker with the swell doubt there are zero percent fees for early stakers with swelp and in addition to being a staking as a service doubt a brand new staking as a service out there's a bunch of other enhancements to these swell products that you can go and check out there is a link in the show notes uh so like I said brand new is taking as a service org on the scene also playing with brand new staking as a service Technologies and so soon they will be implementing some of the more sci-fi aspects of ether's taking including DVT among other things as well as being able to be integrated into defy apps so there is a link in the show notes to get started staking with swell man it just

rolls off the tongue oh yeah it's it's a really exciting stake earned in deposit and David uh that AP are 4.5 on eth right now and I got to tell you post withdrawals I am much more excited to stake my Eve it feels like there's been a decrease in protocol risk here post that the recent upgrade but David tell us who are we having on today to talk about this intersection in fact is there an intersection between Ai and crypto we shouldn't presume that there is of course there's a lot of mean coins in crypto being created uh that that sort of used Co-op the AI brand name but what is AI and crypto what do they have to do with each other who do we bring on today and what's the discussion going to be like

yeah I think the for the discussion of AI and crypto really needs to start at first principles which is something that you and I are really good at and something that I definitely saw um articulated in this blog post from Muhammad from Alliance style so a lion style invests in the web 3 space across different verticals and ecosystems and they wrote a blog post called the convergence of AI and web3 which like I said was exactly the subject matter that we wanted to go after originally uh and so they've ideated they've thought about some particular use cases AIS as economic agents uh the the collaboration between ZK uh ZK proofs and machine learning and data sets and running machine learning algorithms on all that

kind of stuff uh Ai and gaming Ai and NPCs Ai and D5 and so while this might be um a podcast episode about ideation this will certainly strike the imagination of The Listener as we go and explore because after all bankless is a futurist Technologies podcast we're going to explore the frontier of future Tech yeah I'm super excited about this conversation particularly the intersection between crypto Ai and identity I think we really need a way to figure out who the humans are and who the robots are because increasingly it's a little bit hard to tell David guys we're going to get right to the episode about Ai and crypto but before we do we want to thank the sponsors that made this possible including our recommended

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contributor at lionstow he's a venture partner at volt Capital we also have Chao who's a partner at Alliance style an investor as well uh ciao Mohammed welcome Bank list thanks for joining us today thanks for having us yes thanks for having us yeah it's great to have you guys I know we've been wanting to do a podcast with you for a while and uh this this topic really just came to mind because you guys wrote an excellent post here recently called the convergence of AI and web3 the opportunities and challenges and this was really an exploration of the ways in which uh AI might find itself in web 3 is kind of the intersection type point because there's all of these opportunities in AI of course and we know about all of these opportunities in crypto but what I really liked about this post is you

started to focus on some of the the intersection type points and I think that is what the bankless community wants to hear we've been talking a lot about Ai and how it could come kill us and how we need to make sure that we're aligned um Can crypto help with any of the upcoming problems with AI and so that's what uh we're gonna start with here today maybe before we begin could you give us like kind of a preamble of thoughts so when I say ciao crypto and AI um what do you think do you think that there's a large intersection here or are these two totally separate uh Technologies at just the highest level like what's going on in your brain with these two uh interrelated terms um I think there are two sides of this

incline um you know obviously in the past uh you have memes like created by Peter teal that um AI is this centralizing force and uh blockchain crypto is this decentralizing Force so it sounds like they're incompatible with each other but the fact the matter is I think that blockchains provide a very good interface for AI to participate and to really flourish because if you think about what what's happening today in web 2 and the traditional games everyone is very um allergic to bots to AI like Bots get the platformed um you know left and right by social media for example but to me there's a difference between

being a bot and being spammy and we're in an era where the llms are so good that they're no longer have to disband they can produce really insightful content and in order for for those llms to flourish they need a permissionless system a permissionless platform that they can build on top of and that's blockchains so that's one area of intersection the other one is decentralized compute um how do we build models in a way that they're not controlled by a central uh powerful Corporation right so it's for the exact same reason why we want decentralized money we want decentralized Finance we want

decentralized uh social network that we may want decentralized um AI right decentralized ways to train and to for training and for inference of AI so we can dive deeper into that area as well I want to get Muhammad to weigh on us but but ciao you brought up with something that's core because that has been you're right that has been a meme in my mind this Peter Thiel thing of AI is a centralizing force and crypto is a decentralizing force and these are kind of two opposing forces and I think the central ideas AI needs to be centralized because it needs to consume this very large aggregate data set and so something like massive economies of scale yeah it gets better the more data The More Humans you throw at it the more

kind of like um like feedback it receives from all of the humans in its large data set right so it's centralizing whereas crypto so we know it's a very decentralized technology everyone every individual can be their own bank you can hold your own private keys and no one can take them from you right um you know so that is a decentralizing force but you I I don't think I get the sense that you don't actually agree with that that split maybe there's the the idea of we could have a decentralized AI like so to talk to me about that what do you just agree with Peter thiel's meme um so there's a part part of me agrees with it which is that blockchains provide checks and balances to Ai and so does

zero knowledge proves which Muhammad is is very familiar with so we can talk about that that the intersection of blockchain zkp and AI That's super fascinating but the part of me that disagrees with um Peter thiel's meme is that um I think decentralized compute is going to play a somewhat important role I I don't want to overblow it because uh again this is one area where Muhammad and I actually disagree with each other so Muhammad actually is strongly against decentralized compute and I can see some merit with it um I think that decentralized compute can be useful for training AR models

especially the smaller models not it's not good for for large models large models you need a centralized um you know AWS or whatever to train the models okay and then for inference I think that there is a different way to do decentralized AI it's not about running the models across a cluster of uh nodes that interact with each other through the network it's more about uh I think the best way to achieve decentralization on the inference side of things is to run open source models on your local device so um this is an area where we can dive deeper if we want the way I understand Peter Till's uh

metaphor that Ai centralizing and crypto is decentralizing is less is less that Ai and crypto or oil and Waters just more about the power structures where Ai and the power that AI creates benefits large centralized institutions whereas cryptography and crypto economic systems largely benefit the the individual so Muhammad a similar question to you but also can you talk about just what you see when you see the intersection of AI and web3 and also how it shifts the power pendulum of the world yeah um I come from a different like species like uh like AI started way before crypto so like uh like AI Roots come back to the 1960s and 1970s and the idea was different and the goals were

different and then crypto came in like 2010 after Bitcoin so they came as to Independent Technologies uh but uh and this give a course for everyone every technology that doesn't care for the other like AI people don't care about crypto crypto people doesn't care about AI but with what happened in the last few years that we are seeing AI is getting overwhelming it actually we started to see actually threats from Ai and now we are asking harder questions like how can we actually manage that and then comes a clip to the picture and as Xiao mentioned it's a character who came as the chicks and balances um and for me I see that crypto is one of the very very few technologies that can actually steer AI none of no other technology can shift how AI works or how

it performs but cryptocan and this is why it's like interesting topic and when when I started exploring this with a child we found that yes what the developers the technologies that we developed in web 3 like blockage chains digital signatures and uh ziki proves all this will play a bigger role in AI in the next few years at the same time like AI is disrupting everything and and naturally like we will find some use cases in character that will be disrupted so I see it as a two-way street each technology will affect the other and there will be a lot of synergies but at the same point we will find some areas that are conflicting and that's natural because these Technologies came as independent technologies that didn't share background

I find this idea of crypto as a check and balance against AI to be very tantalizing and and very needed because I like governments all around the world are they not asking the question of like what do we do how do we regulate this people going to chat GPT for medical advice for instance and I mean well that's it is chat GP a doctor now like is is it is it able to recommend what you should what you should do in kind of like for your health uh that and that's just one micro facet we also talk about all of kind of the Bots and the Deep fakes and all the incredible content that uh these AI programs are able to to create now and who's a human and who's a

robot right we need to check on maybe some of this power I want to I want to come back to to that idea uh as we go through this episode um but can we take one quick detour which is there has been this thing in crypto I and I think it might exist in the meme layer The Narrative layer I haven't paid it much attention but AI coins okay so like these are tokens with AI in the name I think ciao and maybe you have a few that you can rattle off the top of your head honestly I I have not been paying attention to these things because like I don't know what they are and I they seem like very much a narrative trade what what are the AI coins is there something to them is this the intersection between AI we're talking about

yeah to be very honest I didn't look at them uh since Chad chat since GPT or since chatbt came out which was November maybe December last I can remember but the reason why I looked at the AI coins is because I suspected um was going to Rally very hard immediately after tragically came out and it did so I found like a list of 10 coins that are somewhat AI related or trying to you know jump into that that bandwagon of AI spiritual AI spiritual that's right yeah um but I mean one client that I remember today still is is render protocol but and the reason why I remember I remember

that one is because um Muhammad and I disagree all the time on the centralized compute and render protocol is the one that that provides decentralized GPU for for AI uh so that's the only one that I really remember and there's another one called uh alithia which is product which provides on AI avatars but most other coins I don't remember them to be honest and it sounds like that that wasn't even the point you went you went into that trade knowing that they were dubiously associated with AI correct that's right yeah and so it's just again it gives us a gamble that Chachi EBT was going to uh penetrate it's just a narrative trade right yeah I mean this happens all the time right

and and funny so when when tpp4 came out the AI coins didn't really move so if it felt like a lot of that narrative has been priced in um last towards the end of last year okay well can we talk about maybe the real use cases yeah now that we've got the download because I don't think we're talking about any of the kind of you know the specific coins maybe maybe there's some decentralized compute you know and some coin kind of embodies that thesis but uh let's talk about the real intersections and you outline I think a few in uh in your post maybe we'll start here the first is payment and execution rails for AI agents this is again an intersection

point between Ai and crypto payment and execution rails for AI agents could you tell us what you mean uh I don't know who which of you wrote this post probably is it it's like a David and Ryan kind of poster podcast where we both kind of contribute to it but uh ciao why don't we start with you on this question it's mostly food out so a footage tell us so um like just to set the stage what is an AI agent right now we use uh chat gbt uh you or David can go to like video type of question and AI Asian words the charge GBP will respond to you right so you are the output you receive the information from the from your charge gbt what if you take this a step further and make the Asian another bot so you take a pot

can actually be using an llm actual gbt at the back end asking questions getting answers based on the answer asking new questions and getting new answers and all this interaction having to achieve a certain goal so an AI Asian definition is that you create a bot is that and you give it just a goal you give a high level goal and the AI agent can go and use llm and maybe another database to store data and it keeps interacting with llm at the back end so AI agent actually is a new phenomena it is started like at less than a month ago when a VC created something called Baby AGI and from that it exploded we have a baby egi we have Auto gbt we have so many many variants of them that actually are inspiring like people are bullying with the concept of

how to actually make aiation smart and um and can do a lot of things I want to make sure I understand the agent concept because this is happening so new and it sounds like you've been like a month old right so this is this the idea of like you Fork chat GPT not quite Fork maybe that's the wrong term maybe that's a crypto term kind of seeping in but it's like one variation of a chat GPT but you give it a different kind of objective let's say we take a chat GPT kind of like back end uh large language model and then we just feed it just a whole bunch of bankless content right all of our podcasts all of our archives all the newsletter and then we can start to ask it about like what's the definition of ultrasound money and it will give us like the bankless

response is this kind of an agent and the goal of this would be to like um you know give the best possible responses to anyone careering kind of the bank list database or am I too Limited in this thinking give us some tangible examples here okay so this is one form of agent that's a specialized agent like you train an engine to be bankless okay but the general form of agent that you create uh about that has a storage that can it can store data and then it has access to gbt using an API or another element and then you go to the spot and give it just a title like let's say it's a title I won't create the most successful podcast encryptor right and you give it just title and you it will take this title and start asking uh

judgment what do they know what they need to do so it gives you a few items and then it takes one of these items and elaborates on it and gets a new list and so like build up site do like uh uh get sponsors blah blah blah and at another step this AI agent will actually go and give this task if it asks if you ask if you give you a suggestion to build a website 3gbt can actually author the HTML code that carries the website go to GoDaddy Boca domain and launch the website so an action an AI agent can be very fully autonomous it can just take a directive and execute all the job wait wait so the directors could be as general as like surround the way that this works with auto GPT uh I think I

understand this from a high level is that you have you almost have two chat gpts and one tells the other one what to do and so it's like if you are using chat GPT except you replace yourself with chat GPT and you give the originator you give one chat EBT is like hey um do a thing uh book me a flight to um a country and then also get me a uber and also a hotel and plan a plan a vacation and then the that will be the direction of one chat gbt and that one second that first chat gbt will tell the second chat gbt to do all the things things and so it'll recursively iterate on itself until it gets to the goal this is my understanding Muhammad is that

right close enough yes like actually Ryan's response is the actual response like what yeah okay so the goal can be this General it can be like it's not just I was being way too specific and specialized yeah you were something kind of dumb and I'm like yeah give me an archive cert I'm I'm like search all the bank list archive what you're saying is I could give an an AI agent something as general as like build the best crypto the best podcast in crypto get to number one in the charts and it would it would do this it would it could conceivably like create all the agendas for all the podcasts create the entire guest list for the next like two years reach out to those individuals on the guest list uh create a website for like you know uh a little

of that yeah I don't like this example it's AI all right and then it could actually like maybe in a different scenario maybe we're not there yet but pretty close it could actually uh record a podcast with with AI agents inside of it and there'd be like a version of David and version of of Ryan or whatever it thought the best format for a top crypto pocket it could do accomplish all of these tasks it doesn't even need you or David on the webcaster David when when one chat CPT gets off the rails The Meta chat GPT was like no no you you f'd up like go back why and so the the what I think uh Muhammad you you said that there's two uh elements here there's cryptos payment rails and then the AI agent that was the

AI agent yeah Asian because people throw the word and think don't think what's any action yeah I didn't realize until you just described it so the Jesus here this AI agent will not be as is that as that General like they will not create a podcast but instead they can be very specific they can create a fake model of Orion or David right he can create actually context or a question for your guest so this model would be very specialized and you you can actually use an AI agent to coordinate the other agents so the thesis here that pots will be very autonomous they can actually recruit and hire AI agent and even better they can pay them and receive payments using crypto wallets and this

is what character comes into the picture to be autonomous you need to have a form to pay and receive payment and no bank will open a bank account for an AI agent so easy the easy way a crypto wallet in Bitcoin wallet ethereum wallet whatever you want and then AI agent become fully autonomous they can receive payment for the work they do giving a prompt you give them or they can actually recruit and hire other AI agents and pay them that way what I call baymen rail for AI agents the other part of it is execution rail what if you want to actually uh an AI agent want to create a website then it have to pay GoDaddy it have to uh recruit another AI agent to design the

website so and maybe even they need to get resources for that so if they go to iws and AWS me block them so why not they plug it into a decentralized compute Network where you can actually have a server that hosts your website or even better what if the agent need to scale itself and do more compute it can actually recruit this interest complete to scale itself so like we are getting into like a really like Ninja Turtle here but this is all possible and it's not possible tomorrow it's possible today it's just we need Engineers to build that so crap2 can actually be the payment Rail and execution rails for AI agents so this is the thesis here the the key the key Insight here is um in theory AI agent can control a bank account but there are a couple there are

two problems that are um unique to to bank accounts compared to crypto one is well if you open a bank account you need to kyc well how does an AI agent kyc that's impossible and two um the interfaces are not permissionless in a bank account so you can get the platform if you have a bot that controls a bank account but crypto solves both problems so what what's a better you know wallet for for AI agent is it a bank account or is it a crypto wallet that the answer is clear one of the very early bull cases for D5 uh one of the earliest episodes was the with with Van Spencer and we talked about

um just the open API model for financial applications right it's like every single financial application is just a contract call away from another financial application and we've never seen a world of Finance in which your money market can talk to your exchange like NASDAQ and I don't know what a money market is in traffic but those things don't talk to each other and even if they did you need to log in and then you need to be a human and you need to go through kyc and so the composability of d5s was immensely bullish and like we'll just go back to our bankless routes back in 2018 and 2019 when we were talking about the composability of D5 because smart contracts are just one API uh paying away and so that that was bullish but adding in AI agents as a

layer on top of that is an order of magnitude just like way crazier and that I've ever I've never been able to like think of that and until now it's like really kind of makes it seem like man humans are probably pretty inefficient agents on ethereum I bet you AIS are going to be way better at this game than we are so that's kind of the the intersection here between AIS and payment rails as you were talking about right Muhammad yes um like this is again like like this Asian also we need marketplaces to discover other AI agents so like maybe there is opportunities and this is one of the investment opportunities that we are polish about because we are thinking about that is that we need to create the marketplaces where this agent can

discover each other and can be each other and can bring each other so this is one of and this is also a decentralized Marketplace so this is like there is a lot of uh investing investable opportunities that come out from these thesis I almost think okay so I I don't think I was fully understanding even though I've you know been in crypto you know I don't think I was fully understanding until you just described AI agents what this is going to do for crypto basically I think what we have done in crypto guys is we have just created a banking and money system for the robots like that's they are I used to call them smart contracts but now there's another level I'm talking about like agents AI agents using all of the smart contracts so if you're an AI agent I mean anybody

who in the United States has tried to open a business right anywhere and pay payroll across multiple States knows what a nightmare it is to go register your LLC in kind of the meet space world and to figure out payroll taxes across all of these jurisdictions and figure out how to fill out the forms right and set everything up well you know we call that in ethereum it's a it's an eth address and it's a Dao right like the decentralized autonomous organization the A and Dao is autonomous is AI agent I mean they are not going to want to mess in the Fiat old world banking structure anymore they don't care about Wall Street right AI agents will completely string together a series of

smart contracts create their own decentralized autonomous organizations pool Capital together in order to coordinate goals imagine you're trying to create the like um imagine the goal is more generalized rather than to create the um the best a podcast in crypto and you want to create like the best um I don't know D5 protocol or something or or the best whatever you want to accomplish like an economic agent an economic agent level goal the best you know smartphone or something like this in the best country in the world if you can create this with an AI agent as well yeah you could do this all on chain I mean we have just CR it's it's both okay so it's both very bullish for crypto which is basically like okay well all of the protocols that we're excited about like uniswap and you know

ethereum all of these different chains that we're very excited about well if AI is start using this block space and start consuming it and creating economic activity like if the future of the econ of basically I think we've had this backwards sorry I'm just I'm a little rambling now because I'm connecting so many thoughts here but I think we've had this backwards you know how crypto has always been about like well what happens with a major Nation uh kind of adopts our coin right like and it becomes like say the US sort of brings Bitcoin eth inside of its treasury maybe that whole concept is entirely backwards in in order to become a reserve money for the world you need to be a reserve money for the largest economies of the world nation states have been the largest

economies in the world so far as the United States is Chief among that but what if crypto something like ether Bitcoin becomes the reserve currency for the largest future economy of the world which is this economy of AI agents operating up across Geographic boundaries how bullish is that for all of our crypto assets and yet I'm also scared of this new world of Agents independently acting because what have we created in crypto guys we've created Unstoppable code Unstoppable chains right and so like what if they turn evil and what if they're bad I mean oh this is just aren't they're better crypto than we are God how do we start so I guess what I'm saying is this whole use

case Muhammad of payment and execution rails right make sure we understand guys when you as you're hearing Muhammad describe this payment doesn't just mean like oh I you know I'd rather rather than wiring my ACH from this bank to this Bank uh you know and and I could send Ethan said it means being able to set up decentralized autonomous organizations being able to set up Capital structures be able to execute trades be able to hire and fire people being able to operate with all of these other independent agents like it's an entire banking system money system that we've created for these robots that's how broad this this uh first case is I don't know Muhammad if any of those ramblings made sense to you yeah talk to me guys the uh if you take this idea of AI agents uh controlling crypto wallets

and doing D5 take that a layer of abstraction even higher so we actually mentioned this in our uh article um in the conclusion where we said if you view blockchains as a network then we envision AI agents or AI in general to dominate the edges of the network in 10 to 20 years so this implies not just money and D5 but also social networks and gaming geez and this again goes back to the very first point that I brought up in this podcast which is that if you think about what's happening in web 2 in traditional games in other consumer products in web 2 they're all very allergic to to AI they de-platform the Bots left and right but if you build a

decentralized social network or a fully Unchained game on top of the blockchain then you can Envision a world where the vast majority of players or participants in in the social networks are not humans but there are Bots that produce meaningful content so instead of user generated content which is this whole thing about web2 we can see a world where we have a ton of AI generator content so crypto is the only world where AI has quote unquote human rights is on the same level as a human being elsewhere in meat space they're treated as a lesser but not in crypto the analogy I like to give is Mev

actually because in D5 you have D5 basically has two groups of players there's the human players and there's the Mev Bots they have different goals the Envy Bots they're there to make money and the human players are there to optimize for their dopamine and one of them is EB positive the other one is EV negative the humans are EV negative and the MV Bots are EB positives but they coexist with each other very well and so if if that's how things work in D5 why wouldn't the same thing work in in Social Network or or on-chain games for example I think going through this uh this article and also this this conversation a lot of the early days of understanding

daos like the idea of decentralized uber on the blockchain and we can have this massive hierarchical organization and we would talk about the theory of the firm and how we would make things autonomous and we wouldn't need any internal employees and it would just be external value contributors and two-sided Marketplace to manage by a smart contract that was this was like division of 2017 right and all these Ico tokens that spun up and this was the original OG vision of what a Dao was before a Dao became what it is today which is like a multi-sig with a bunch of money in it and a bunch of humans controlling it the original version of a dow was this system of inputs and outputs smart contracts that would be this autonomous

network of value that would control some external resource in the world like Uber or Airbnb or any sort of you know commodity sharing ecosystem except that was all just fanciful like Ico uh vapor in 2017 but the missing component of of that was the AI in the middle to manage everything or at least that is what in 2023 I am claiming to be now in this current is like isoform so maybe we can unpack that statement a little bit it's like was that really the missing piece of imagination back in 2017 the whole like autonomous side of Dallas or am I just like over subscribing the power of Chachi PT and

AI to really feel that void Mohammed what do you think I think you are connecting a lot I think once you understand the board of which igbt on llms and like yeah Asians you're actually starting to put them in areas in if you're interested like you saw the house and that was worse and that was me maybe filled to uh achieve the original vision and now you are putting a piece of the puzzle how I can actually help us to get to the original version of that so this is kind as a brainstorming that we need to do now um uh and honestly I think that we are already starting but we're already starting International in the right direction like now ai agents are not powerful enough to even come with their own goal right so you have to be directed by a human a human has to give

this AI Asian um a goal so in the examples I shall give about AI agent as players in an onion chain game yes only chain games as Bots will perform way better than any human player but a human player can go and actually develop the strategy or develop the thinking or like uh educates about what to do or like how to even understand the rules of the game and the AI agent will do all zelig work it will go understand the rules of the game it will understand the smart contract even if the game and it will do interactions with the smart contract when needed and with efficient costs so as an AI agent actually we have an only chain game in our portfolio that is doing literary

results the allowing players to create towards tragedy and the strategy will be translated as an AI agent to play for them so the a Argent are not really autonomous in the future they will be and it will be a kind of a battle of who will have the best strategy not necessarily the league work will disappear the league work will be automated and it becomes a market an efficient market of strategies and ideas this is mind-blowing stuff Muhammad and Chao um I think what we need to discuss if this is the world we're living in with with humans and the robots in the machine side by side in the same games and the same social networks um is are we able to use crypto in some way to tell uh who's a human and who's a robot because that is very important so

we're going to talk about content authenticity next and how we battle all of the coming deep fakes because crypto may play a role here guys we'll be right back with that conversation but before we do we want to thank the sponsors that made this episode possible including metamask if there are any crypto term you didn't understand on Bank list go check out metamask learn they've got the info for you to level you up on crypto learning about crypto is hard until now introducing metamask learn an open educational platform about crypto web 3 self-custody wallet management and all the other topics needed to onboard people into this crazy world of crypto metamask learn is an interactive platform with each lesson offering a simulation for the task at hand giving

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development the way it was meant to be secure fast cheap and friction free you know uniswap it's the world's largest decentralized exchange with over 1.4 trillion dollars in trading volume you know this because we talk about it endlessly on bakeless it's you to swap but uniswap is becoming so much more you just want Labs just released the uniswap mobile wallet for iOS the newest easiest way to trade tokens on the go with a uniswap wallet you can easily create or import a new wallet buy crypto on any available exchange with your debit card with extremely low Fiat on-ramp fees and you can seamlessly swap on mainnet polygon arbitrarm and optimism on the uniswap mobile wallet you can store and display your beautiful nfts and you can also explore web3 with the in-app search features Market leaderboards and price

charts or use wallet connect to connect to any web3 application so you can now go directly to D5 with the uniswap Mobile Wallet safe simple custody from the most trusted team in default download the uniswap wallet today on iOS there is a link in the show notes guys we have ciao and Muhammad here we're talking about Ai and crypto what's the intersection apparently a lot as we've just learned in the first part of this episode let's talk about this idea of the humans and the robots uh living together in all of the digital Landscapes whether it's our games or as social networks or every place in the internet there seems to be this problem of being able to tell whether the content is published by a robot or whether it was a human and who the humans and who the robots are that seems important to know because of course with

uh you know lower costs of replicating humans we can get into a world of disinformation we can get into a world where we don't know whether this is genuinely a message from the president of the United States or whether it's a deep fake from some AI that has you know created a message of uh from Joe Biden can crypto help us with this time stamping as a use case maybe this idea of identity tying crypto graphic identity together to separate the humans in the robe Bots Muhammad what's what's your take on this section of your post because you guys covered it here too and actually Muhammad before before you give your take I'd like to present just one scenario that I think is a great way to tee this up uh once upon a time there

was fake news that was spread about vitalik's death um and ether price started to plummet and what did fatalik do he took a photo of himself with a piece of paper that had ethereum's current block height on it and that was his Proof of Life um in a world post uh mid-journey and post artificially generated images that would no longer work uh and so now we need a new level up we need a new game and we need a new uh zero to one moment in our authenticity of humanness in this post AI world so I'll throw Ryan's question back to you okay this is all the great examples and like just to add to the general audience like what other examples can we use like we just saw like a defect for a song

from Drake right I like and like if you go back a little bit there was also a video of Morgan Freeman speaking and say that's another I'm not Morgan Freeman so like this is all examples so and the solution is very simple we created a massive technological digital signatures that can actually solve all of that so what's the digital signature for you to do any crypto transaction you have to you have a private key no one else knows it or both can cannot crack it and you are the only one who can sign this transaction and anyone in the world can verify the signature versus your what's your um public key and who why how's your no public Keys you can go to the bankers website you can get your Twitter

accounts you can go uh right underneath and he knows that this public key is associated with you so is this their signature turns out to be a very very powerful tool to address all of that that including the picture of italic it doesn't need to have a picture he can just say a message using his own private key and then this is a private key that is controlled by a human and this human is telling the world this is a human generated content so let's say that you want to prove this episode of bankless what you do after you get all the video file you sign the video content with the signature and now this video is clear that it was recorded by the real Ryan and the real David and John Muhammad

right and then anyone can one anyone can verify this so this is the way I think is a very easy way that web3 can control these defects but there is one catch like now what after you record this episode you want to get a clip of it you want to get a one minute clip the problem once you do this the signature is not valid for this one click one one minute clip anymore how to prove that this was the original subset from your original video another technology I developed in this space which is zero knowledge proofs can actually address that you can do a computation verifiable computation on anything using zkbs and actually having a subset is a very simple computation when you say okay this one minute video is an original subset from the one hour video this is a

very simple computation that you can create as you know singular knowledge proof to prove it and anyone can verify this poor so we developed two technologies that can help you authenticate original content and even allow you to get subsets of it to publish it without need to resign the content so this is one way we can move forward with this space so Muhammad we have the technology today to be basically like publish this using a verifiable digital signature bank list we have bank list.eth that's our ens name that that launched a set of private keys that David and I control and so we could publish it from bankless.eth so people would know this is a certified verified original from uh

the owners of this private key which I guess through through other means because we broadcasted this before people would know bankless.eth is David and Ryan so this is authentic and so we have that Pro we we can already solve that problem today basically and you're saying also there's a another problem which is there could be Snippets of this content that are chopped up that you know parts of it are deep faked something like this and um what we could do is we could actually use a ZK proof type technology to verify that a snippet a video clip say came from the original that was originally signed by David and Ryan on bankless.e and we also have that technology today the ZK proving

technology to kind of verify and validate that a subset clip was from the original but it's already building that and there are already developers doing something uh on images right now that when you have an image and you rescale it or like you rotate it or whatever you do any touching up it can prove that what you did didn't change the contained in a drastic way I didn't take Ryan's face I bought someone else so we there are projects already building in that I think Italian Foundation is supporting one of the team on this regard we are seeing actually teams that are trying to do this for video we will see people do this in audio there is a lot of ideas here and you will find the specialization because it's uh zero knowledge proof is still a new

technology and you need to find the most efficient Roof System for your use case so I think in the next one or two years you will find any product mini products actually addressing that so you can use it without even understanding that zikib is under the hood anything anyone who makes a clip of something will be just attaching a small data which is a proof and the burden goes to the person who publishes it if I publish something thing is about a proof like we can take it by default that's fake until they publish the proof that this was taken from a personal content I want to go I I'm so curious as to how this whole how you can verify a clip of a larger set of data as a part of the larger set of data I'm I'm so confused

about that so say we have like a one hour long video and you take a one minute long clip there are an Infinity number of ways of manipulating that clip you can change the resolution you can change the color tone you can add in you can add in new pixels and draw a line across the part of the part of the clip there's since there's Infinity number of ways of manipulating a clip how does a ZK proof actually work in this context how does that work okay so we're already doing this today David like when you have a smart contract that do a lot of stuff it can be D5 or whatever and you say okay I will put all of this in a roll up and the roll up will execute this and just send me a proof on the L1 saying that this program happened so

let's abstract xenology groups as a way to create a group for any program if you can describe this program as good you can convert this good to in some ways into approve so what would you do if you want to take a snippet and one minute snippet of your video you can say here is the code that I used it's 50 lines of code that I used to take the snippet of the original file and you publish this on GitHub or any uh open source media so everyone can actually validate this code and then and here is how this could convert good convert it into aziki circuit and here is the proof using the zika circuit so there is of costly of course there is a chain of custody or a chain of proceeds but any open source code essentially can be eventually converted into aziki circuit

and you can create a brew for it so yes there is some technical details that you need to publish what transformation did you do you cannot just do it like here is approved for everything just proof doesn't mean anything you have to publish what you did to the good and yeah once anyone validates that you just added a line you just change the resolution and then it's fine but okay so the idea the idea here is that all of the derivatives of data so long as I am the person doing the manipulations I can produce that chain of custody so it's less about um people other agents that I don't like that are are antagonistic it's not about antagonistic agents that are trying to copy my data it's about me as the

originator and my ability to prove that all Downstream derivations of my data are sourced from the legitimate file correct um I would say anyone can do it if I if I today wanted to take a one Cliff from your video and I can say here is the code that I used I took a Rota code to take from one minute 15 seconds to one minute two minute 15 seconds and here is the open source code that did that and here is a proof that or zaziki proves that message is good it's an open process but anyone can do it it's even more beautiful the use case for example is when a journalist takes a clip of a real recording and then put it put it out of context for example and you can in this case you can use dkp to prove

that the clip that the journalist showed is actually real versus totally fabricated so it's people who intend on being truthful not people who intend on lying yeah so people who are claiming the truth are part of that chain of of truth yes and I think by default like now we are not used to this concept of defects but I think humans are quick to understand that like in the future defects would be the norm and anyone who wants to prove their the authenticity will have to send something to make sure you have to have a digital signature but let me ask you about this so okay so every all pieces of content will have digital signatures associated with them right on like you know crypto economically secure digital signatures

okay that's great but we just talked about AI as being able to spin up their own uh private keys and be able to spin up their own digital signatures so I guess my overarching question is but does this solve the problem because how do you prove Humanity in the first place how do you guys know I'm not a bot and haven't been a bot the whole time holding thebanklist.eath like private keys for example sometimes I question myself so does that does that need to be fixed for this or do we are we still like using the squishy social layer to prove humanity and they was like I met this guy in real life one time one time we met David are you really sure how certain are you about that event not sure did it really happen that's exactly right like you mentioned that you need

this social layer to bootstrap credit credibility of the system so today the social layer is those web 2 social networks so for example if you guys want to prove that this Bank list episode is produced by you guys you need to publish bankplus.eath on your Twitter account and people believe that Twitter account and therefore they believe that this digital signature belongs to a human not a bot and what ultimately a digital influencer who set up a Twitter account I'm an AI agent there's not actually real I'm just kind of synthetic then we have to collapse it back further Beyond web 2 and get back into meet space essentially yes yes well think about this it it depends on

who cares about whether that person is the originator or not like maybe the AI is the originator and all we care about the truth for that is that that is the correct originator that we care about we don't care about producing Humanity David that's that's a really good discussion the the digital signature is not to prove whether or not something is produced by bot or human it's used to produce that this thing that used to prove that this piece of content is produced by this person or Creator or authentic right is authentic to prove authenticity rather than personhood right yeah so I mean AI our future AI influencers are totally able to produce this technology to claim to claim provenance over their AI generated

content yeah whether or not it is fake news or not yeah we'll just know it's from that specific agent whether it's human or robot and it's authentically from that agent but we don't necessarily know whether that he is is a human or a robot my other question for you guys here is like we have this technology today basically specifically that like sign in with ethereum sign in with your your um private key why hasn't it been adopted I mean Twitter has this massive problem I'm like Elon Musk he's like battling the Bots all the time on on Twitter and it seems like crypto has a solution for this why haven't we been able to like why why haven't we've been able to kind of penetrate and people are still using

username and passwords all the time um there's not a lot that's being digitally verified and yet we have the tech is there a network effect problem that we have and that we haven't like how how do we know that this is going to take off uh I think the the reason is very simple it takes a startup that is well connected enough with all these uh platforms where the content emerges uh for example Twitter or YouTube or Tick Tock or even my my Sony camera when I take a picture I need to I want to be able to send it uh provide a digital signature for example so it takes a startups to to that's well networked enough with these platforms and be able

to convince them to to join uh this this protocol to be part of this protocol where digital signature is is required to sign messages so I think that's the only reason why it the solution is not being implanted yet and I think that for example this this whole deep fake thing is going to play a massive role in the next election but I think we only have Weimar election for this to happen because by the 2028 election the solution will be ready the solution of digital signature will be ready we just need a builder to put all the piece puzzle pieces together and

partner with the content providers and make this like easy button for them that's the part we're missing that's right yes convenience user experience always has been the issues probably the other piece we're missing is for all the Bad actors to force this use case into necessity yeah but that's watching soon isn't it so that Catalyst wow okay so we've we've talked about uh payment and execution rails for AI agents so basically we've created a money system for the robots a good job crypto I hope that turns out okay but it's definitely going to increase the use of our crypto networks uh and then we've also talked about this this check and balance which is uh crypto Technologies can be used to verify authenticity uh using digital

signatures there's one other category and there's much more that you post discuss but there's one other category I I want to make sure we we cover before we end this episode Muhammad and uh and and uh so that is privacy privacy so um tell us about the Privacy story and the tie between Ai and crypto and privacy what's the intersection there um this is and actually and you look at category which uh what I what I it's what what they consider that what how crypto can actually solve the problems of current AI models or is now a very uh transparent they don't respect the Privacy you like charge gbt

collected all the data essentially on the internet and trained it right and we if you have certain some certain private data and use the chat gbt this data actually may leak back into the training set so the training set of charge gbt will have your own private data so the question becomes how to solve this privacy issue how to allow machine learning model to act on private information uh the examples that I love to give here is like using AI for medical diagnosis so this is a trend it's approved by the FDA but even like FDA is willing to explore AI for this and there is multiple research pieces from the FDA saying houses how yeah I can help with medical tasks

so the point here let's say that you have an AI model right you wanna and this IR model can diagnose cancer but to get it to diagnose cancer correctly you need to train this on many many data right so you need to get people who have cancer sharings and medical records which is IR model and people also who didn't have cancer to share this data with their AI model for the AI model to be able to label this patient has cancer or this paper doesn't have cancer cancer but are we willing to share our medical information with this AI model are we willing to share this private intimate information with any company the answer is typically no so how is it then how to solve this problem

how to use AI for something like that um so I think the answer is simple which is using again zero knowledge proofs so let's say that I have a medical record today and I want to use Mok sharing this with for training this but my only condition is that it doesn't have any personal identifiable in the identifying information so again we place the scheme of authenticity the the hospital or the doctor who created this medical report can digitally sign it to make it authent to make sure it's authentic now we prove this authentic now I want to anonymize this medical record I want to take my data of it only keeping the x-rays MRIs whatever then we can use a zqb to prove

that I just anonymized this medical record I took off only my personal information and the rest of the medical record is complete and correct and now we have a set of authentic medical data that are clear that can be used to train AI models so we solve it a huge issue in this case the other part I call this a screening how to use privacy to train AI model but even after training of the CI model we can actually use it for diagnosis without leaking privacy now a company around this AI model in their servers and I can anonymize my medical record before sending it for diagnosis like I will just send this data to the AI model and the Mei model will tell me if I have cancer or not but the model doesn't know my personal my name my real

name it doesn't know my addresses it doesn't doesn't know any personal information so I think ziki B's and this is one of those cases there's only many use cases in privacy one of them is the worldly coin announcement that we can touch on if you would like but I think privacy um and zkbs are very very strong players that can actually solve many problems of current AI systems what's at stake if we don't solve the Privacy issue with AI is is it basically like because uh outside of the bounds of this I'm not aware that this is a solved problem uh at all so I'm just wondering if basically the chat gpts of the world like we're moving without something like this we're moving towards a dystopia

where there is no such thing as digital privacy what's at stake if we don't get this part of it right a lot at the stick uh would you like to be able to know your medical records and like act on it and like maybe even like treat against you because you are not in a mental estate or a healthy state so so like it's very dangerous and uh I mentioned this in our private discussion like if you really don't want to use any information uh public that is the only way the only way is to make audio transactions private and this is something like we also built in our ecosystem using zcash and like uh other companies that use zero knowledgeable to hide complete information of a

transaction I can transact with you I can send you data but no one except me and you will know it so even to protect it from invasion of privacy and I mentioned this in the article you can but you will have to go through the bin of like using kombilit uh privacy using zero knowledge approves guys this has been a lot of fun and as we draw to a close here I got to put the investor cap back on here of course because we are on the journey West and we're definitely looking for opportunity here uh we're all a lot of investors listen to this space and so I'm trying to listen for the investable opportunities that you guys see between the intersection of AI and crypto and of course there's lots of AI concentrated type bets we already talked about the

the meme narrative trade not interested in that more it's in kind of the fundamentals here one thing I'm hearing at the end of this episode is uh buy crypto networks that AI agents are most likely to use in the future that seems pretty logical I'm like okay well I'm doing that I think I've been doing that and so continue doing that okay that makes me more bullish also we talked about looking for the easy button for Content uh authenticity content authentication somebody's got to build that there might be a number of startups doing trying to do that also looking for the easy button for for privacy that seems to be a you know case here but but child high level what do you think the investable opportunities are here

between this intersection of crypto and AI of course none of this is financial advice as as we always say but like what are the fundamental opportunities here um for uh Public Market participants frankly I can't see any just because I mean there I I said before there's probably a dozen of AI coins but it's very hard to price them because they have no cash flow I don't know if they're overvalued or undervalued um I you know you can you can do a narrative trade that lasts like two months for example but there's nothing I I'm really willing to hold long term at this point um because I don't know if they're gonna

go up or down it's hard to price them that said uh there's a couple of songs if you're interested uh in the uh that I'm that I'm personally invested in I've done quite a bit of research um but one of them is uh uh TSM uh Taiwan semi conductor company I I see I see Muhammad is modeling because Muhammad told me about these two stocks last year but one of them is TSM the other one is uh asml um they are parts of uh there are two parts of the AI uh or or the chips supply chain um so Taiwan so tsm's main customer will be someone like so TSM has a lot of customers but one of them is NVIDIA for

example Nvidia is also the the probably the the purest AI bet however Nvidia SP is like 140 or something I just can't can bring myself to buy it so I I'm not I'm not thinking about Nvidia but TSM produces the chips to Nvidia Nvidia is the chip designer asml is the one that produces equipment just just to simplified equipment for TSM and Intel to produce their chips so TSN and uh and asml are as close as it gets to monopolies in any Industries like TSM it probably it'll take Intel maybe three years to catch up to them and asml it might take a decade these are the chips that all the AI

agents are going to run on basically that's that's likely a semiconductor bottlenecks it is that the player that create the chips that anyone using AI need to them need them so that's right isn't isn't the more obvious answer ciao in Muhammad what is so cool there's infrastructure that we need to put the AI components together to build the AIS but what about just buying the AI money that The Heirs are going to use in the future isn't that the more simple answer of course yeah of course it's serious and that just means we're just buying Eve by Eve that's right yeah yeah okay here we go it sounds like every conclusion uh on Bank list is is that that answer

but I mean uh this this is great last question for you guys is we kind of uh head out so we talked about a lot of things a lot of transformation coming our way with AI agents uh David and I have been doing a number of episodes related to AI safety and there's this problem that Eliza Kowski may be most famously lays out of like very scared of the existential risks he's 99 certainty that AI is going to like murder us and so I mean this is like uh kind of worried because I'm sitting back and we just established that we built a money system for AI agents okay cool did we just build a money system for AI agents to like accelerate the murdering of human the destruction of humanity you

guys are in the space too and I'm just at the stage information gathering looking for uh people with some knowledge and some opinions here what do you guys rate the probability of like the AI risk threat to humanity I mean Ellie user is the most extreme he's like 99.9 sure there's others that are far less extreme how do you how do you personally uh weigh this problem maybe ciao you first and then Muhammad will end there with you to be honest I haven't thought deeply about the AI alignment problem I've listened to a bunch of podcasts I haven't formed my own independent opinion yet but so far I'm I'm very optimistic about AI I I've just seen how much more productive um chat TPT has made our developers so for so the the single biggest use case

of GPT from what I've seen today is developer productivity so I've chatted with a bunch of developers every single one of them tells me they've quoted me a productivity Improvement of anywhere between 10 to 200 it's it's mind-boggling yeah and I think that you know these things are just going to make startups a lot easier it's going to make a lot quicker for people to ship nvps and build new products and I think productivity is going to increase across the board throughout the whole economy within the next 10 years I don't really see a world where where AI kills Us in the next 10 years and I see a huge uh Improvement GDP boost in the next 10 years so that's

that's what I'm saying I will say the AI alignment people will or will tell you that yes everything's are going everything is going to be great we're going to have massive economic and productivity booms and then the alignment problem will manifest and they will kill us it's more like it will be great the turkey's having a great time until it's you know the week before Thanksgiving Muhammad though how do you answer this question what's your take on it um I think uh it's a viable threat but I my personal view is that we will actually figure out ways to use AI to discipline AI or AI to even fight AI so like like I and I don't underestimate the human Ingenuity to like come with Solutions

um even using the tools like I still consider AI as a tool that we use now and if it became outside bound we will find ways to bring it back in inbound um and we already started discussing today's ways of how we can actually prove that stuff is happening without AI can preventing this the signature can be maybe the new new nuclear codes right like you can you cannot launch a nuclear missile always with having a digital signature and like biometric signature and a lot of other stuff so I um I'm optimistic and I think we will have uh it's a threat and we have to pay attention to it uh but I think we have all the tools that we need to be on the good side of this debate

very good guys we'll end on that optimistic note one thing I will will share I'm also I haven't formed an opinion on this yet for myself but I can say this with 100 confidence I am more optimistic in our AI future with crypto in it than without it I do think this technology is a useful tool checks and balances uh for our AI system so um you know hopefully we're doing a good thing here and uh certainly you guys are doing a great thing by bringing this to our audience today so ciao and Muhammad thank you so much for spending some time with us thanks for having us risks and disclaimers of course gotta let you know all crypto is risky so is artificial intelligence you could lose what you put in but we are headed west this is the

frontier it's not for everyone but we're glad you're with us on the bankless journey thanks a lot bam thanks guys that was killer thanks guys really great really fun you guys unlocked some things um for me personally so I love those types of episodes I appreciate it thank you