Bull Market Layout: The Most Worthy Directions and Projects in the AI Track

Author: Riyue Xiaochu | HZGB

The AI sector is different from all other sectors. Because AI is not only the AI of the cryptocurrency world but also the AI of all humanity. In the AI race, there will definitely be projects worth billions of dollars.

AI is dramatically changing human society. In a few decades, our descendants may refer to the present as the fifth industrial revolution of artificial intelligence.

For a long time in the future, AI will be the biggest focus of humanity. It will also be a hot topic in the cryptocurrency world.

Since the release of GPT-3.5, the capabilities of AI have shocked the entire world and will also impact the cryptocurrency sector. The release of GPT-3.5 in 2023 and Sora in 2024 triggered two waves of speculation in the cryptocurrency AI sector. Now, tech giants are engaging in a technological race to seize the discourse power of future AI. Various fields of human society are utilizing AI for innovative industries.

Of course, this sector also has many projects looking to capitalize on the hype. Therefore, we need to have a discerning eye to select truly valuable blockchain AI projects. Below are the important directions I believe in.

1 Decentralized Artificial Intelligence Network

The significance of a decentralized artificial intelligence network is: 1) to prevent excessive power from centralized giants, and 2) to aggregate the wisdom of excellent small and medium-sized teams.

Bittensor is a decentralized artificial intelligence network. Anyone can produce competitive digital goods on it. These digital goods can include machine intelligence, storage space, computing power, protein folding, financial market predictions, etc., and earn TAO rewards.

The architecture of Bittensor can be divided into two layers: the bottom layer is a blockchain based on Polkadot Substrate, responsible for executing the consensus mechanism and incentivizing the network. The AI layer is responsible for inference, training, and ensuring input/output compatibility between Bittensor protocol nodes.

At the core of Bittensor is the subnet. A subnet is a competitive market. Anyone can create a subnet or participate in an existing one by paying a registration fee (in TAO). Subnets will compete with each other for survival of the fittest. Current subnets include large language models, fine-tuned models, language translation, data, etc.

For detailed information about subnets, you can check:
https://foresightnews.pro/article/detail/57931

2 Decentralized Computing Power

In the AI race, decentralized computing power must have a seat and is very important. The three main elements of AI are data, algorithm models, and computing power, and only computing power belongs to hardware. General hardware needs to follow Moore's Law, which states that performance doubles every 18 months to meet market demand. However, we are now in the era of AI for all humanity, and the AI competition among tech giants and the practical applications on the application side have led to a huge demand for GPUs, while the supply of computing power clearly cannot meet the explosive growth in AI demand. The core value of decentralized computing power platforms lies in utilizing blockchain technology to aggregate idle AI computing power globally to meet the market's demand for GPUs.

At the same time, the chicken-and-egg problem can also be solved in the cryptocurrency world. By leveraging the expectations of token airdrops, a large amount of computing power can be attracted at the early stage of the project, and after going live, incentives can be provided through token production. We are already accustomed to this way of playing, but the reality is that this can only happen in the cryptocurrency world.

Another advantage is that, compared to cloud-based GPU services, using decentralized computing power platforms does not require very complex contract process reviews, etc. There is also a price advantage, with costs being only about 1/5 to 1/10.

Arkash and Render are established players in this field, each with their own advantages. However, in terms of the number of GPU connections, two new entrants, Aethir and io.net, have already far surpassed them. According to data from layergg, Aethir has over 40,000 GPUs, and io.net has over 22,000. Arkash and Render have GPU numbers only in the hundreds or thousands.

In terms of market capitalization, io is only $260 million, with an FDV of $2.2 billion. Its ATH was $320 million, with an FDV of $3.5 billion. However, unlike other high FDVs, a significant portion of io and net is derived from mining rewards, which are intended for mining rewards lasting for decades. Excluding this part, io's FDV is $1.3 billion, and ATH's FDV is $1.7 billion.

3 AI Web3 Platforms

In addition to the general large language models from tech giants, there are still many actual demands that have not been met. For example, in data-sensitive industries (such as healthcare, education, etc.), the market experience accumulated by companies, the expertise possessed by teachers or experts, and algorithms optimized for solving specific problems.

These demands have two basic requirements: one is the hope that data or knowledge will be protected, and the other is the hope of obtaining economic returns. A blockchain-based AI platform can fully meet these two needs.

KIP Protocol is a secure and efficient decentralized Web3 underlying protocol that provides AI creators (data owners, algorithm model creators, AI application developers) with:

1) Guarantee of data/knowledge ownership. Stored on-chain in the form of ERC-3525 semi-fungible tokens to represent ownership of knowledge assets and token access rights. They are uniquely controlled by the owners.

2) Protection of data/knowledge usage. KIP Protocol is the world's first Web3 protocol supporting decentralized RAG (Retrieval-Augmented Generation) solutions. RAG is a complex innovative technology used in generative AI that allows AI models to generate answers they originally did not know by retrieving data and information from external knowledge bases and databases.

3) AI application layer. Creators can easily access the pathways of their works through KPI and build front-end code to promote their products. Anyone can conveniently use various AI applications on the KIP platform. At the same time, a set of transparent and anonymous web3 contracts records the usage of various applications, ensuring openness and transparency.

4) Settlement layer. KIP uses account abstraction to allow users to participate in and use multiple applications without signing multiple gas transactions. It is tokenized in the form of ERC-3525 SFT and used to record and settle transactions between users and token owners related to each element they interact with. Transactions can be settled across borders using KIP platform tokens.

On the 17th, KIP Protocol announced a milestone partnership with Moemate. Moemate uses the KIP protocol to build decentralized infrastructure. This collaboration will bring over 3 million users into Web3.

Moemate is a leading AI agent platform that allows users to create customizable AI companions with adjustable personalities, multilingual support, voice cloning, and image generation capabilities, such as chatbots, Discord/Telegram bots, AI NPCs, games, virtual companions, and even in the AR/VR field.

4 Real Human Protection

With the development of artificial intelligence, AI has become indistinguishable from real humans. This is evident not only in language expression but also in images (including photos of people), videos, etc. On the internet, you can no longer distinguish whether an account is operated by a real person or an AI. Therefore, a serious problem may arise in the future: how to prove that you are a real person online? At the same time, we also need to distinguish between real people and AI online and monitor the potential adverse effects of AI in a timely manner. Blockchain technology can be used as a real human identification method, encrypting and storing biometric information to ensure it cannot be tampered with, and allowing for real human verification without disclosing details.
Regarding this issue, it was first raised by Sam Altman, the founder of OpenAI, and the Worldcoin he founded aims to establish a global digital identity and financial network owned by humanity. Through Orb biometric scanning, global registration of each individual is achieved to reliably distinguish humans from machines. Worldcoin creates Layer2 using the Op stack, and all human biometric information will use Zero Knowledge Proof (ZKP technology) to ensure privacy, with no third party directly obtaining it. The protocol's incentive mechanism uses a dedicated blockchain token called WLD. However, from a secondary market perspective, WLD's circulation is $800 million, and its FDV has reached $28 billion. Therefore, it is not suitable for long-term holding, and it is advisable to hold it only when considering speculation in the AI sector again.