I was irritated by a tweet sent this week by Chris Frantz. He is the founder of Loops email platform.

Frantz stated that “90% of people I know from web3 have shifted their companies to AI.”

It wasn’t that I was so concerned with the founders being obsessed with getting venture capital, that they would glop onto the latest “in” trend. Let’s leave the fickleness of Silicon Valley for another day. People see the different elements of the new digital economy that is forming around us as separate, interchangeable pieces. But they are actually intertwined, complementary and related.

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AI will require Web3, and vice-versa. Why not build them both?

This harmful reductionist simplification stems from the failure to identify a core, unifying characteristic of all projects which end up being labeled “Web3”, “blockchain” or “crypto”. I see that the only thing they have in common is that all of them use a novel distributed record-keeping system and incentives to address the fundamental problem of trusting information. These technologies allow communities of strangers who are mistrustful to maintain open data records, which allows them to share and distribute valuable (or sensitive information) among themselves.

Web3, crypto, and blockchain are addressing a challenge we have faced since the dawn of the internet. It’s even more important now that we are in the age AI and information uncertainty is set to skyrocket.

Original Myths

Why do people, whether they are founders who flip from one trend to another or policymakers that think crypto is only for money laundering, not understand the importance of this data architecture?

To the risk of sounding sacreligious I believe it is a return to the roots of cryptocurrency, the founding of Bitcoin.

The message should have focused on information, sharing data and protecting privacy, which were the main concerns of the Cypherpunks, whose mailing list Satoshi used to release the Bitcoin whitepaper in October 2008.

Here, I don’t really blame Satoshi. The founder was merely offering one of many information solutions on which the cypherpunks ruminated for years: A cryptography-based, digital currency. Satoshi understood that money, although it has a fundamental role in society, is just another type of information.

Money is not a thing. Money is a standard, widely accepted symbol of value. This is a type of information, which, due to its high value, requires a complex, institutionalized system in order to ensure that individuals and entities will not abuse it. It’s not the only information with value that requires institutional coordination. Bitcoin, for me, was a prototype of a much larger idea.

Many early Bitcoin believers got it, including Ethereum’s founder Vitalik buterin. They realized that the decentralized data architecture they were using could be used to solve the many problems of sharing information in the digital era.

In the eyes of the public, and regulators, who wanted to fit this odd square peg in a round hole, blockchains and cryptocurrencies were all about money.

This misunderstanding has caused us to be pushed back. It has perpetuated a Web2 structure that allows giant internet platforms to manipulate data in a harmful way, causing mistrust of our information systems and democratic institutions. This industry could have dealt with its inherent legal, privacy and scaling challenges more easily if it had a better understanding of what was possible. There would have been less of a tendency to scams and “number-go-up” token casinos and more motivation to create meaningful solutions for the world’s issues.

But, now? This misunderstanding is dangerous in this age of artificial intelligent.

Please do not accuse me naively of “blockchain will fix this” hand waving. The AI challenges are huge, from protecting the copyright of inputs to large language models to avoiding bias in outputs to the “liar’s dividend” that is fostered by the current inability of humans to differentiate between AI-created content and real content. It is not easy to save humanity against the machines. Any solution will be based on a variety of technologies and policies.

Here’s what I do know: we are not going to resolve these matters with an outdated 20th-century regulation-technology stack. In this new era, we need a decentralized system of governance to produce, verify and share information.

What it can do

Blockchains have certain qualities that are helpful, whether or not they can provide what is needed as designed.

We can protect ourselves from deep fakes by using immutable ledgers. It could be used to test the integrity of datasets that are used for machine learning AI. The use of cryptocurrency could be used as a way to compensate people in any country for their contributions to AI-training. Projects such Bittensor are building tokenized, blockchain-government communities that incentivize AI developers to build human-friendly models (addressing the concern that AI systems owned by private corporations are incentivized to put the profits of shareholders over the rights of users.)

It’s going to be a while before these ideas deliver on their promise, if ever. Success will also require a variety of other technologies, including homomorphic cryptography, secure computing and digital identities, decentralized credentials and IoT, as well as smart multi-stakeholder laws that protect privacy, punish bad behavior, and encourage human-centric innovation.

To position Web3, Blockchain, Crypto, or whatever name you choose, as an outdated technology that has no place in the digital future, is to misunderstand the issue at hand.

Ben Schiller is the editor.