Daily Balajisms - AI, Crypto and Social
The age of a short phrase.
Balaji Srinivasan says that AI, Crypto and Social (networks) are the three most important technologies today. They brought us into “the age of a short phrase”.
With a short prompt you can make an AI produce content, that would take thousands of lines of code. With 12-word mnemonic phrase you can store 100-million-dollar worth of crypto. And with a hashtag you can start a global social movement.
AI in a broader sense includes also automation and robotics. It allows governments to surveil and control citizens much more effectively, like in the case of Chinese social credit system. But it also turns creators into narrators, and allows anyone in the world to tell their own stories, with tools like Stable Diffusion and ChatGPT.
Crypto(currency) started in 2009 with bitcoin, but today central banks all around the world are contemplating CBDCs and Chinese digital yuan crossed 100 billion in transactions and accoplished cross-border tests.
Social networks were not taken seriously for a very long time, but people started to take them very seriously - after Donald Trump won the elections in 2016, and after he got deplatformed from Twitter in 2021. And after Elon Musk bought Twitter in 2022.
The goal in the early 2000s was to get everyone online, and social networks grew in size and value, thanks to the network effect and Metcalfe’s law. But Balaji explains that this also created the network defect of highly adversarial communities – like Twitter, a global arena, with a global leader board and zero-sum behavior like online mobs and cancellation.
With web3 and decentralized social networks we will get walled gardens, where thousands of highly aligned communities can bloom.
All three technologies – AI, Crypto and Social – can have their centralized and decentralized versions. This complicates the Peter Thiel’s quote that “AI is Communist and crypto is libertarian”, says Balaji.
According to Balaji, these three technologies also map somewhat to the tripolar power attractors of today – CCP, BTC and NYT – or Communist Capital, Crypto Capital and Woke Capital.
CCP is heavy on AI, bitcoin is the father of all crypto, and prestige press, like NYT, influences heavily social media, but is becoming increasingly the downstream media – downstream of twitter and the internet.
Together with Balaji, we can map these three technologies and three power attractors also to the deterministic hard power (CCP, AI), the stochastic soft power (NYT, Social) and the money power/smart power (BTC, Crypto).
In interesting ways, AI enables the pseudonymous economy – with AI filters people can sound and look as they want and use crypto as a digitally-native currency. AI helps social networks filter content and bad actors. And crypto with pseudonymous economy will enable training of teams of AI agents and hybrid AI-human collaboration.