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Hey everyone! I hope you took some names and kicked some you know what this week. In my little world, I did something this past week for the first time in over a year (one could even say the first time) that made me take a huge step toward entering “the real world”: I worked in an actual office. I know this is going to be laughable to some of you (and it should be), but after having worked remotely while traveling last year and before that having my only true “office experience” be a hangout spot on St. Charles Avenue (Nieux Society), a football lockerroom (Newman football), the Superdome (Saints and Pelicans) and the marble halls of the White House & the Senate, going in and sitting with other work colleagues in perfectly symmetrical desks seemed so odd.
For your information, this is not meant to be a complaint as I can work remotely as much as I’d like (I can even do all the travels again if I choose to do so). It’s just that the realization took me by surprise. While the meme above probably suggests that the office life was unsatisfactory, I love the space Coinbase has in Hudson Yards and plan to stop by there at least a few times a week. For this week’s blog, I want to bring it back to this blog’s roots of writing about blockchain technology as I haven’t written about the topic in quite some time (unless you count my Coinbase blog) through arguably the most exciting narrative in the crypto markets: DePIN. Enough of my blabbering, let’s get into it!
Google Gemini’s Gaffe
As everyone knows, AI has been the absolute hottest topic over the last year in the tech world, and last week was no different with two main news headlines that spread like wildfire. First was the NVIDIA earnings report which they ended up hitting out of the park, adding a record-breaking $277 billion to its market capitalization. It also produced some incredible memes on Twitter saying the company is single-handedly holding up the world economy right now (link to Tweet here):
The other big headline of the week caused much more ridicule than elation. Google’s flagship AI product and Chat GPT competitor Gemini had quite the shocker after users’ prompts generated some wild answers. Such responses include not being able to state if Elon Musk or Hitler were worse, creating historically inaccurate images in the name of diversity instead of truth, being even flat-out racist against white people, and overall having a clear political bias built into the system. It was pretty easy to see why the bias ended up being built into the system after people realized who the product lead was and started looking at his previous tweets (will note that I am generally not a fan of when people do this, but in this case, it did explain a lot).
Seems like Google has moved far away from its original “Don’t be evil” slogan (was changed to “Do the right thing” which seems way more subjective…ironic isn’t it?).
With Google being one of the main players in this AI race (along with Open AI, Anthropic, Meta, etc.), this past week scared a lot of people in terms of the future this type of bias can bring when embedded into such a powerful technology. Even VC heavyweight Marc Andreessen chimed in referencing this threat as having similarities to George Orwell’s 1984:
People don’t want to be beholden to this. While some people may prefer to have the autonomous agents they interact with be tailored to their liking, others are simply looking for “the truth…the whole truth…and nothing but the truth.” If it becomes increasingly more difficult to trust these tech overlords with this technology, what is the solution?
DePIN for the Win
Google’s original slogan of “Don’t be evil” is an admirable one, to say the least, as it aspires the company to objectively make the world around it better. However, this slogan requires that users of the company’s product & services trust the company to not be evil. What if there was a way to take the trust part out of the equation completely so that you never even have to worry about it? That’s what blockchains enable. At its core, blockchains “Can’t be evil”.
I recommend reading this blog above, but just as a general takeaway for this blog, know that, unlike centralized systems, blockchains have no one central point of power/failure, and thus are unable to adhere to the commands of one for their benefit. Now…for this blog which you can see in this section heading what is this DePIN thing?
DePIN, short for Decentralized Physical Infrastructure Networks, uses blockchain technology and crypto economics (i.e. utilizing tokens) to incentivize decentralized communities to build & maintain physical hardware, thus creating a more transparent and efficient network. To simplify it, in DePin, users supply their hardware or software to the network and receive token rewards for doing so. It's a broad domain, encompassing various sectors like computing, storage, and sensors, aimed at decentralizing network infrastructure for better scalability than centralized systems.
For example, let’s look at Filecoin, one of the earliest and most prominent DePIN players. Filecoin allows people with unused disk space (aka computer storage) to rent out this space to people looking to store things with that unused space. Think of it like cloud computing, but instead of Amazon, Microsoft or Google controlling it, it’s spread out between people all across the globe. To incentivize people to provide the storage necessary to make the network useful (like eBay needed people to post items for auction on its site to make it worthwhile), Filecoin issues a token worth money to those who provide disk space.
This is generally how the DePIN system works across all different types of hardware and software:
Supply-side users commit resources for token rewards
Demand-side users use the resources and create more of an incentive for suppliers
As you can see, this generates a great flywheel that inspires the growth of whatever network a DePIN system plans to tackle.
As mentioned, DePIN can tackle many different industries from cloud storage to wireless sensor networks, and more. But how does it relate to and affect the AI boom we are seeing?
DePIN AI
As you already know (and as I’ve already mentioned in this blog), AI has been the hottest topic of the past year, and some change. Thus, companies (namely tech giants) have been clamoring to build out their AI infrastructure so they can make more & more advancements in the space. While this tech is incredibly powerful, it also takes a lot of computing power to operate them, which many companies didn’t have enough of to be highly competitive in the AI game. This drove high demand for graphics processor units (i.e. GPUs…i.e. AI chips) thus significantly reducing the supply of this hardware and significantly increasing the price. Even at this companies are still willing to pay top dollar, with Meta even willing to spend upwards of $10 billion for a bundle of GPUs.
While it’s becoming increasingly difficult for these behemoth tech companies to gain access to these GPUs, they have more than enough cash to spend on it all. However, for smaller teams or even solo developers who are looking to create their own models, there’s an incredibly high cost of entry. So can they get access to the appropriate computing power? That’s where DePIN comes in.
The decentralized nature of DePIN allowed for a crowd-sourcing of GPUs, CPUs, and more which can help alleviate some of the upfront costs associated with getting access to compute power. Additionally, it allows developers to not be beholden to any restrictions from these tech giants that could potentially hinder whatever they are looking to build. Some notable projects that are currently working on this intersection between AI & crypto are Akash, which is creating a decentralized compute marketplace, and Bittensor, which is gamifying AI research through crypto incentives.
With Google’s recent fiasco displaying the dangers of how dangerous a completely centralized AI world can be, it’s more important for a viable decentralized option to be available. While some non-crypto-related projects are making a lot of headway going down the path of open-source building (namely Hugging Face), I believe crypto’s ability to incentivize public building and compute marketplaces will help make the open-source AI building much more competitive to its centralized counterpart. With the next bull run in the crypto cycle looking imminent, don’t be shocked if the intersection with AI starts getting tons of attention.
Thanks for reading! First blockchain-related post in a while, which felt appropriate given the fact that I’ve had tons of people start texting me this week asking why Bitcoin was going up. Not sure what I’ll write about for next week, but everything happening in politics right now may be too interesting for me not to write about so stay tuned!
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Email: wreynoir@gmail.com