AI+Crypto: Trouble

Recently,
crypto
AI
tokens
rode
the
coattails
of
AI
chip
maker
Nvidia’s
blockbuster
earnings
report.
As
Nvidia’s
stock
sailed
north,
so
too
did
tokens
like
Worldcoin’s
WLD
(40%
in
seven
days),
SingularityNET’s
AGIX
(43%),
and
FetchAI’s
FET
(18%),
according
to
a
February
22
CoinDesk

article.

This
isn’t
the
first-time
enthusiasm
for
traditional
AI
companies,
like
OpenAI,
has
invigorated
crypto
AI
markets.
Following
exuberance
over
OpenAI’s
ChatGPT
3
early
last
year,
Crypto
AI’s
had
a
moment.
By
at
least
one

calculation,
their
collective
value
exceeded
$4
billion.

Fetch.ai’s
token,
FET,
for
example,
rocketed
from
around
6
cents
last
December
to
a
height
of
54
cents
on
February
7.

But
there’s
a
difference
between
traditional
AI
companies
and
crypto
AI
companies.
We
know
what
ChatGPT
or
Google’s
Gemini
do.
Consumers
can
use
them.
Nvidia
manufactures
microchips
that
power
the
most
sophisticated
computers.
What
do
the
technologies
behind
crypto
AI
tokens
do?

Fetch.ai,
for
example,
has
esoterically

described
itself
as
“a
decentralized
connectivity
platform
that
enables
devices
to
connect
directly
with
digital
agents
delivering
autonomous
solutions
to
complex
tasks.”
It

purports
to
connect
users
to
AI-powered
digital
“agents”
(basically,
AI
assistants)
that
might
help
users
make
restaurant
reservations,
plan
travel,
or
book
a
house
cleaning
by
interfacing
with
AI
agents
for
the
restaurants,
airlines,
or
cleaning
services.

How
little-known
Fetch
plans
to
best
the
likes
of
Google,
Microsoft,
Amazon,
and
Apple,
who
dominate
the
digital
assistant
space
(and,
in
the
case
of
Google
and
Microsoft,
AI
as
well)
is
unclear.
Less
clear
is
what
role
their
FET
token
plays
in
the
business
other
than
to
raise
money
for
the
company
and,
presumably,
earn
returns
when
the
token
price
rockets
up.
Fetch

says
that
FET
is
“the
utility
token
and
the
key
medium
of
exchange
on
the

Fetch.ai
network,”
explaining
that
“FET
can
be
used
to
pay
for
services
in
the
Fetch
ecosystem
and
network
transaction
fees.”
Why
not
use
USD,
BTC,
or
a
stablecoin?

Also
worth
consideration
is
Fetch’s

announcement
on
March
29
last
year
of
a
$40
million
“investment”
from
DWF
labs.
Less
than
three
weeks
later,
CoinDesk
published
an

article
titled,
“Crypto
Market
Maker
DWF
Labs’
More
Than
$200M
in
Deals
Blur
What
‘Investing’
Means.”
The
article
questioned
whether
DWF’s
investments
were
little
more
than
over-the-counter
trades
fraught
with
the
peril/promise
of
DWF
manipulating
the
price
of
the
token
to
its
benefit
and
the
issuer’s.

Worldcoin’s
business
model
is
similarly
confusing.
Worldcoin

says
it
“aims
to
provide
universal
access
to
the
global
economy
no
matter
your
country
or
background,
establishing
a
place
for
every
human
to
benefit
in
the
age
of
AI.”
How
does
it
aim
to
achieve
this
lofty
goal?
By
scanning
everyone’s
irises
with
a
dystopian
orb,
of
course.
The
purpose
is
supposedly
to
allow
people
to
verify
their
identities
online
(for
example,
when
voting
online
or
claiming
certain
government
benefits
through
a
digital
system).
But
the
company
has
faced
some
significant
regulatory
headwinds
over
the
obvious
privacy
concerns
that,
most
recently,
caused
Worldcoin
to

exit
markets
in
India,
France
and
Brazil.

Do
investors
really
believe
that
Worldcoin
will
be
the
company
to
protect
our
digital
“personhood”
in
the
AI
age
to
which
its
co-founder
has
helped
give
birth?
And,
as
with
Fetch,
why
do
they
need
a
token?

Several
commentators
(see

here,

here,
and

here)
have
suggested
that
Worldcoin
may
follow
a
pump-and-dump
pattern
familiar
in
crypto,
where
promoters
pump
a
coin
in
the
early
days
of
trading,
insiders
and
sophisticated
traders
exit
quickly,
and
the
price
drops
leaving
almost
everyone
else
with
losses.
In
the
first
few
days
of
trading,
in
July,
WLD
jumped
from
$1.91
to
$2.72.
Then
it
slid
to
$1.01
in
September.
As
of
this
writing,
it
has
hit
an
all-time
high
of
$7.64.

FET
has
also
hit
an
all-time
high.
From
about
$.06
in
November,
it’s
now
at
$1.77.

I’m
not
a
trader,
but
I
have
my
doubts
that
these
prices
are
sustainable.
A
rise
and
fall
in
price
does
not
necessarily
signal
a
pump
and
dump.
Nonetheless,
investors
would
do
well
to
consider
Sam
Altman’s

own
words.
“For
any
new
system,”
he
said
while
discussing
Worldcoin,
“you
will
face
some
initial
fraud.”
With
Worldcoin,
as
with
other
crypto
AI
projects,

caveat
emptor.