The Year of AI

Artificial intelligence has risen as a key player in various industries, including crypto, where open-source AI offers an alternative to centralized options. “We’re keeping an eye on open-source AI,” said Joel Hugentobler, Cryptocurrency Analyst. “Centralized players may face issues like censorship or bias, but open-source AI provides a more neutral perspective.” Blockchain’s immutable and decentralized records serve as valuable knowledge repositories for AI. By leveraging blockchain, the community controls AI development, enhancing accountability and reducing misuse risks.

Decentralized Energy

Artificial intelligence demands significant energy, traditionally sourced from centralized data centers. A decentralized physical infrastructure (DePIN) network addresses this by distributing computing power across blockchain nodes. Hugentobler noted, “A DePIN approach is more resilient to geopolitical risks such as natural disasters or wars.” This model allows smaller businesses to access AI and adapt it for their specific needs, offering a scalable solution that could surpass centralized servers in terms of reliability.

On-Chain Assets

Real-world assets have already been tokenized this year, with digital representations emerging in various forms. Tokenized deposits represent bank deposits on blockchains and are regulated within a banking environment, unlike stablecoins issued by non-banks. Hugentobler stated, “Tokenized deposits will be a focal point for financial institutions as private lending has surged.” These assets offer faster settlement and lower fees compared to traditional methods, making them attractive for unbanked or underbanked individuals.

Where Things Are Headed

Regulatory frameworks like the MiCA are driving tokenization in regions such as Europe. The U.S. lacks tangible crypto regulations, leading to ongoing criticism and controversy. While some speculate a more favorable regulatory environment may emerge, Hugentobler advised individuals and companies to prepare by integrating digital assets into their systems. This industry is rapidly evolving, presenting both challenges and opportunities.