Exploring the Development Prospects and Investment Opportunities of Crypto AI

Host: Alex, Research Partner at an Investment Firm

Guests: Max, a well-known YouTube channel host; Lydia, a researcher at a certain internet company.

Understanding Crypto AI

Alex: Today we are here to discuss the highly anticipated Crypto AI sector. First, let's hear from our two guests about their understanding of Crypto AI and the problems it aims to solve.

Max: Crypto AI mainly addresses two issues: first, it tackles problems such as censorship in centralized AI; second, it introduces an incentive mechanism. Through token incentives, it can reward open-source models and decentralized development, which is a completely different direction from the traditional AI development path.

Lydia: From a business perspective, the urgency to improve efficiency currently outweighs the need to ensure fairness. The greatest value of Crypto AI at this stage may not be directly reflected at the commercial level, but rather in opening up people's imagination at the narrative level. We need to give these two technologies time; perhaps what they are best suited to solve are future problems, rather than present ones.

Alex: It sounds like Crypto AI provides a completely different path for AI development through token rewards compared to the traditional world. Although there may still be gaps in performance and cost at this stage, it offers another set of solutions that intersect with cryptocurrency, making it a cutting-edge experiment.

Classification of Projects in the Crypto AI Track

Alex: Crypto AI is a relatively large field, with many different projects that have various business models. How will you categorize these projects?

Lydia: A common classification is Crypto-enabled AI or AI-enabled Crypto. Currently, there are more AI-enabled Crypto projects, meaning Crypto projects are incorporating AI attributes. The ceiling for Crypto-enabled AI is higher, but it is more difficult to achieve and validate, requiring more time.

Max: I mainly divide it into three categories: architecture layer, resource layer, and application layer. The architecture layer is the underlying infrastructure, the resource layer provides computing power, data, and other resources, and the application layer is the user-facing product. This classification method is quite in line with the existing Crypto track.

Opportunities and Challenges of Crypto AI

Alex: What are the main challenges currently facing Crypto AI? What opportunities are there in the next 1-2 years?

Max: The main challenge is that many projects are still in the early stages, with market values rising very high, but they still need to find a true product-market fit. On the opportunity side, now is a great time as cryptocurrency is receiving more attention, and there are more resources to explore different directions.

Lydia: The biggest challenge is the mismatch between market sentiment and technological progress. In terms of opportunities, we should pay attention to developments in the non-crypto AI world, especially news from mainstream media. In the future, we may still need to return to AI to find topics; I am particularly interested in topics related to ethics.

Alex: I would like to add that the emergence of AGI in the next 1-2 years may greatly impact the value of human labor. At that time, the emphasis on AI and the sense of crisis will reach new heights, which may bring speculative value to Crypto AI.

Crypto AI Projects Worth Noting

Alex: What Crypto AI projects do you think are the most worth paying attention to? Why?

Lydia: I recommend Bittensor. Its narrative capabilities are very strong, and the team gives off a friendly yet ambitious vibe. It has garnered attention from institutions like Grayscale and has shown strong vitality even after experiencing large-scale FUD.

Max: I am also most concerned about Bittensor. It effectively utilizes a token incentive mechanism to build a decentralized AI ecosystem through the Yuma consensus mechanism. However, its current token issuance rate is very high, and the control of the mainnet is still relatively centralized, which are potential risks. Other projects worth paying attention to include Vana, Arweave, Near, etc.

Evaluation Strategies for Crypto AI Projects

Alex: What core factors do you pay the most attention to when researching and selecting Crypto AI projects?

Max: I mainly look at five aspects: the team, the product, profitability, future outlook, and the token economic model. Among these, I place the most importance on the team because investing in crypto projects is essentially investing in startups. It's essential to evaluate the team's capabilities, the supporting VCs, and the community behind it.

Lydia: I also value the team a lot, mainly focusing on their narrative capabilities and execution skills. Additionally, I will pay attention to the role of the token and whether the team's understanding of Crypto is profound. Finally, I will look at whether the project's brand culture is cool enough and distinct from others.

Alex: I will make a periodic assessment to see whether the project is in a short-term overly optimistic phase or a long-term overly pessimistic phase. For long-term investors, the best time is when the market is overly pessimistic about the sector in the long run.

Commonly Used AI Tools Sharing

Alex: What AI tools do you use on a daily basis? What role do they play?

Lydia: I often use ChatGPT to practice English and as a psychologist. I use Perplexity to search for information. There's also Byte's Doubao plugin, used for summarizing YouTube videos.

Max: I am a heavy user of ChatGPT, using it to absorb knowledge and summarize information. I also use it to generate images, but I still maintain my own style in text output. In the future, I plan to use it to assist with investment research.

Alex: I also use GPT the most for writing and learning. Perplexity's search function is very useful. I believe that in the future, search will definitely shift to AI-driven methods, which may bring about a significant increase in productivity.