## Exploring the Feasibility and Challenges from Use Cases
On the 11th, major U.S. venture capital firm Andreessen Horowitz (a16z) released its latest report, presenting 11 specific use cases based on currently developed technologies at the intersection of artificial intelligence (AI) and cryptocurrency.
a16z pointed out that amidst the centralization of the internet by large corporations driven by the rapidly evolving AI-supported economic structure, the decentralized network of blockchain can reconstruct that economic structure and contribute to the realization of a more open and robust internet.
Cryptocurrency is believed to help build superior AI systems, and the reverse is also considered true, but the definition is ambiguous. This report was written with the aim of creating a discussion on feasibility and future challenges by presenting specific use cases.
The report introduced the following 11 use cases, broadly divided into three areas: identity, decentralized infrastructure for AI, and new economic and incentive models, along with considerations for the future of AI.
Identity
Permanent data and context
Universal ID for Agents
Proof of Humanity
Decentralized Infrastructure for AI
DePIN for AI
Interaction standards between AI agents
Sync of the Vibrating Coding App
Economic and Incentive Model
Micropayment
Using blockchain for the registration of intellectual property and provenance
Syncing with the Vibecoding app
Content Creator Reward Support
Personalized and privacy-protected advertising
AI Companion
Identity Area
In use cases related to identity, we first discussed the use of blockchain to share context among different AI platforms. For example, the context in professional applications such as games and media (saving difficulty levels and key settings), knowledge-based applications (understanding user knowledge and learning methods), and coding is stored on the blockchain as a permanent digital asset. By sharing user information among AIs, it becomes possible to optimize the user experience.
Currently, each platform (such as Amazon and Facebook) manages its own identity (records of people and things), but as the use of AI agents becomes widespread in customer service, logistics, and payments, agents that operate in diverse environments not limited to a single app or platform will be needed. In this case, what supports the agents is a portable "passport" that serves as a foundation for shared identity, not limited to any specific platform.
Moreover, with the proliferation of AI supporting features such as bots and deepfakes, it is becoming increasingly difficult to determine whether something is truly human on the internet. As a result, there is growing attention on decentralized "human verification" mechanisms that users manage themselves, utilizing blockchain technology. It provides portability that is not dependent on any platform and features permissionless access.
Decentralized infrastructure for AI
The leading decentralized infrastructure for AI is the decentralized physical infrastructure network (DePIN, which addresses the challenges of access restrictions to power and high-performance chips that have been bottlenecks in the evolution of AI.
It is believed that we are approaching an era where AI will evolve to autonomously interact with each other and handle complex tasks. However, currently, most AI agents operate within siloed ecosystems, and there is no common infrastructure. Therefore, there is growing anticipation for the realization of an interoperable network by building a common protocol between AIs through blockchain technology and establishing open standards that anyone can access.
With the evolution of generative AI, software development has dramatically accelerated, allowing even beginners to code and create custom applications in natural language. However, this "vibe coding" (intuitive AI-assisted coding) can lead to issues with program functionality and security, and may reduce the compatibility of custom applications. Traditional standardization cannot keep up with software that evolves in real time, but leveraging blockchain and sharing ownership of a synchronization layer will be the key to the solution.
New Economic and Incentive Model
AI tools (such as ChatGPT, Claude, Copilot) are convenient, but as seen in the decrease in traffic on educational platforms and the copyright lawsuits against OpenAI by newspapers, they are destabilizing the internet economy. If incentives are not readjusted, the internet will become increasingly closed off, with more paid content and a decline in content creators becoming a concern.
As a technical solution, incorporating revenue sharing into the structure of the web is promising, and a mechanism is being considered to distribute revenue to content providers when AI behavior leads to sales. By utilizing blockchain, it becomes possible to track the source of information and fairly execute small payments to content providers or retroactive payments after transactions through smart contracts.
The emergence of generative AI has raised significant issues regarding how to prove and manage the ownership and provenance of intellectual property (IP). What is needed is an open and publicly accessible registry that provides clear proof of ownership, allowing IP creators to easily operate while also enabling AI and web services to interact with it directly. By leveraging blockchain technology to create a programmable IP infrastructure, it becomes possible for creators and brands to clearly establish IP ownership in the digital space, and also to develop new business models based on the use of IP in generative AI and similar contexts.
Web crawlers, which account for about half of internet traffic by roaming websites and collecting information, have become a significant issue by burdening site operators with bandwidth and CPU costs. However, a solution utilizing blockchain has been proposed. AI bots will make monetary payments in cryptocurrency as compensation for the rights to collect information to the content delivery network (CDN). However, large-scale cooperation will be necessary for the participation of CDNs and changes to traditional internet practices.
By combining blockchain and AI, a new system is proposed that can deliver appropriate advertisements based on user preferences while protecting privacy. Small payments for viewing or clicking on ads (a system with fast and almost zero fees is essential) will require technical requirements such as privacy-protected data verification and user participation incentive models for realization.
AI as a companion
For many modern people, the time spent interacting with AI models or content curated by AI through devices is increasing, rather than face-to-face interactions. In the near future, AI-based companions may become common in fields such as education, healthcare, legal consultation, and even friendship. These future AI companions are expected to be patient and customizable for specific individuals or purposes, potentially developing into "valuable relationships."
Therefore, whether the ownership and control in such relationships belong to the users or are held by companies and intermediaries becomes an important issue. Blockchain can serve as an optimal means to achieve user-controllable AI as a censorship-resistant hosting platform.
Blockchain has become more high-performance, and now, with wallets like Phantom, passkeys, and account abstraction, users can hold self-custody wallets without the need for complex seed phrase management. Additionally, text-based human-like companions and visual avatars have significantly evolved.
a16z concluded that in the near future, our conversation will shift from "when will realistic digital companions appear" to "who will control them."
The content is for reference only, not a solicitation or offer. No investment, tax, or legal advice provided. See Disclaimer for more risks disclosure.
The future of AI and cryptocurrency opened up by DePIN and decentralized ID: 11 use cases demonstrated by a16z.
On the 11th, major U.S. venture capital firm Andreessen Horowitz (a16z) released its latest report, presenting 11 specific use cases based on currently developed technologies at the intersection of artificial intelligence (AI) and cryptocurrency.
a16z pointed out that amidst the centralization of the internet by large corporations driven by the rapidly evolving AI-supported economic structure, the decentralized network of blockchain can reconstruct that economic structure and contribute to the realization of a more open and robust internet.
Cryptocurrency is believed to help build superior AI systems, and the reverse is also considered true, but the definition is ambiguous. This report was written with the aim of creating a discussion on feasibility and future challenges by presenting specific use cases.
The report introduced the following 11 use cases, broadly divided into three areas: identity, decentralized infrastructure for AI, and new economic and incentive models, along with considerations for the future of AI.
Identity Area
In use cases related to identity, we first discussed the use of blockchain to share context among different AI platforms. For example, the context in professional applications such as games and media (saving difficulty levels and key settings), knowledge-based applications (understanding user knowledge and learning methods), and coding is stored on the blockchain as a permanent digital asset. By sharing user information among AIs, it becomes possible to optimize the user experience.
Currently, each platform (such as Amazon and Facebook) manages its own identity (records of people and things), but as the use of AI agents becomes widespread in customer service, logistics, and payments, agents that operate in diverse environments not limited to a single app or platform will be needed. In this case, what supports the agents is a portable "passport" that serves as a foundation for shared identity, not limited to any specific platform.
Moreover, with the proliferation of AI supporting features such as bots and deepfakes, it is becoming increasingly difficult to determine whether something is truly human on the internet. As a result, there is growing attention on decentralized "human verification" mechanisms that users manage themselves, utilizing blockchain technology. It provides portability that is not dependent on any platform and features permissionless access.
Decentralized infrastructure for AI
The leading decentralized infrastructure for AI is the decentralized physical infrastructure network (DePIN, which addresses the challenges of access restrictions to power and high-performance chips that have been bottlenecks in the evolution of AI.
It is believed that we are approaching an era where AI will evolve to autonomously interact with each other and handle complex tasks. However, currently, most AI agents operate within siloed ecosystems, and there is no common infrastructure. Therefore, there is growing anticipation for the realization of an interoperable network by building a common protocol between AIs through blockchain technology and establishing open standards that anyone can access.
With the evolution of generative AI, software development has dramatically accelerated, allowing even beginners to code and create custom applications in natural language. However, this "vibe coding" (intuitive AI-assisted coding) can lead to issues with program functionality and security, and may reduce the compatibility of custom applications. Traditional standardization cannot keep up with software that evolves in real time, but leveraging blockchain and sharing ownership of a synchronization layer will be the key to the solution.
New Economic and Incentive Model
AI tools (such as ChatGPT, Claude, Copilot) are convenient, but as seen in the decrease in traffic on educational platforms and the copyright lawsuits against OpenAI by newspapers, they are destabilizing the internet economy. If incentives are not readjusted, the internet will become increasingly closed off, with more paid content and a decline in content creators becoming a concern.
As a technical solution, incorporating revenue sharing into the structure of the web is promising, and a mechanism is being considered to distribute revenue to content providers when AI behavior leads to sales. By utilizing blockchain, it becomes possible to track the source of information and fairly execute small payments to content providers or retroactive payments after transactions through smart contracts.
The emergence of generative AI has raised significant issues regarding how to prove and manage the ownership and provenance of intellectual property (IP). What is needed is an open and publicly accessible registry that provides clear proof of ownership, allowing IP creators to easily operate while also enabling AI and web services to interact with it directly. By leveraging blockchain technology to create a programmable IP infrastructure, it becomes possible for creators and brands to clearly establish IP ownership in the digital space, and also to develop new business models based on the use of IP in generative AI and similar contexts.
Web crawlers, which account for about half of internet traffic by roaming websites and collecting information, have become a significant issue by burdening site operators with bandwidth and CPU costs. However, a solution utilizing blockchain has been proposed. AI bots will make monetary payments in cryptocurrency as compensation for the rights to collect information to the content delivery network (CDN). However, large-scale cooperation will be necessary for the participation of CDNs and changes to traditional internet practices.
By combining blockchain and AI, a new system is proposed that can deliver appropriate advertisements based on user preferences while protecting privacy. Small payments for viewing or clicking on ads (a system with fast and almost zero fees is essential) will require technical requirements such as privacy-protected data verification and user participation incentive models for realization.
AI as a companion
For many modern people, the time spent interacting with AI models or content curated by AI through devices is increasing, rather than face-to-face interactions. In the near future, AI-based companions may become common in fields such as education, healthcare, legal consultation, and even friendship. These future AI companions are expected to be patient and customizable for specific individuals or purposes, potentially developing into "valuable relationships."
Therefore, whether the ownership and control in such relationships belong to the users or are held by companies and intermediaries becomes an important issue. Blockchain can serve as an optimal means to achieve user-controllable AI as a censorship-resistant hosting platform.
Blockchain has become more high-performance, and now, with wallets like Phantom, passkeys, and account abstraction, users can hold self-custody wallets without the need for complex seed phrase management. Additionally, text-based human-like companions and visual avatars have significantly evolved.
a16z concluded that in the near future, our conversation will shift from "when will realistic digital companions appear" to "who will control them."