The AI revolution has come! But the blockchain hasn't even reached the Cambrian era yet. Can we create new opportunities by combining AI?

AI rising, the technology market is booming

2024 is undoubtedly a year of bumper harvest for global technology stocks. According to reports from multiple financial institutions, tech stocks have seen double-digit gains throughout the year, with many AI concept stocks leading the surge. One of the most prominent examples is graphics chip giant Nvidia (NVDA), whose stock price has surpassed the market capitalization of many traditional industry leaders, thanks to the wave of AI demand. Cloud computing and data analytics companies with diverse applications have also enjoyed funding frenzy. A series of AI-driven new hardware and algorithms have spurred enterprises to upgrade their large-scale computing resources, driving market vitality.

Source: Google Finance Under the boost of AI demand, Nvidia's stock price has surpassed the market value of many traditional leading enterprises at one point.

Some analysts also believe that the favorable policies from the White House are a driving force. After the 2024 election, the new government holds a positive attitude towards AI technology, establishing a dedicated unit to integrate AI and cryptocurrency, setting up the so-called 'Crypto and AI Czar.' When this news came out, it made investors believe that the government intends to deeply cultivate AI, create emerging digital finance, and stimulate the market to heat up again. The concept of 'AI collaborative autonomous entities' and other future concepts have begun to ferment within the industry, making investors optimistic about the future applications and potential. However, as with previous technological trends, while the market holds expectations for the combination of 'blockchain and AI,' it also harbors concerns about bubbles and competitive risks.

Blockchain has yet to ignite the Cambrian revolution

In contrast to the AI ​​boom, although blockchain technology has made stable progress in 2024, it has yet to see a similar 'Cambrian explosion'. Observers point out that for blockchain to truly undergo a revolutionary leap like AI, it still needs to solve core technical bottlenecks, especially the challenges of scalability and data access.

The ideal Web3 should be able to replace mainstream applications of Web2, such as decentralized social platforms or shared economic services, but there have been no significant success stories so far. Most decentralized applications are limited by transaction speed, database capacity, and user experience, and cannot compete with existing network services. Some attribute this to the "three challenges of blockchain storage," namely scalability, high-speed random access, and smart contract integration, which are difficult to achieve simultaneously. As a result, the development of blockchain seems to have momentum, but has never truly jumped to the stage of "everyone can use and with rich applications."

Click here for more information about 'What is Blockchain?'.

AI and encryption intersect deeply, and the market expects assimilation

Although the progress of blockchain is slow, some trends indicate the potential for integration. Some AI research institutions and encryption companies are trying to integrate 'automated agents' with blockchain, allowing intelligent programs to conduct high-speed transactions on blockchain protocols, manage digital wallets, or provide decentralized services. If such 'AI Agent on-chain' can be stably implemented, it may bring unprecedented scalability to the blockchain.

However, the integration of AI and blockchain also brings another layer of concern, such as the potential security and regulatory issues if intelligent agents have transactional functionality. Some experts believe that it is necessary to establish a sound firewall and contract auditing mechanism, otherwise the malicious use of automated agents could pose a serious threat to user funds or system security. The industry is now looking to the new government's regulatory thinking, hoping for a more systematic coordination among industry players, the crypto community, and regulatory authorities, allowing the industry to unleash its potential under manageable risks.

Currently optimistic, but also need to be alert to volatility

Overall, AI has successfully doubled the growth of technology stocks in 2024. In contrast, although the blockchain has not erupted in large-scale "Cambrian" growth, it still maintains a foundation for stable development and steady development. Most people in the industry believe that when blockchain solves the barriers to expansion and storage and can smoothly connect with AI technology, a new wave of technology will be formed. At that time, the derivative applications brought by the integration of Web3 and AI may fundamentally subvert the existing network business.

However, the future trend still needs to pay attention to international situation, financial turmoil, and policy direction. The rise of AI, although it has triggered a frenzy in technology stocks, there is still uncertainty in the world economy, and the crypto market itself also experiences periodic fluctuations. Investors need to be optimistic about the deep integration of AI and blockchain, but also need to be cautious about potential risks. Once regulation, technology, and capital opportunities converge, the "Cambrian explosion" of blockchain may come instantly, leading to the formation of a new network landscape.

The AI revolution has arrived! But the blockchain hasn't even entered the Cambrian period yet. Can we create new opportunities by combining AI? This article was first published in 'Cryptopolis'.