The big players in the financial system such as sovereign wealth funds, always look at the long term. And when their investment strategy depends on the long-term view it is very important to understand the trends, which are the main disruptive game changer that will shape the world in the coming decades.
And Digital transformation is the top trend for these funds.
For those who like us, see the cryptocurrency market, not only as an alternative to the old financial system, but as the biggest startup market ever created in history (global, innovative and accessible to anyone for almost any amount of money at any time) it is crucial to understand the trends.
A couple of weeks ago we analyzed cryptocurrencies as a trend specific to innovative funds in our weekly article. Today we want to talk about Artificial Intelligence (AI) as another trend with the potential to disrupt a lot of different sectors such as biotech, robotics, gene sequencing or trading.
Convergence of Technologies
This is the key point, what will happen when the disruptive technology of blockchain meets AI? No one can answer this yet, but for our investors we will focus on assets that can scale as technologies converge.
In a 10-year view, AI can turn humans into superhumans. It can displace thousands of workers by automating the tasks of knowledge workers. It can change the complex production process. It can simplify software development. And it can change the way traders work.
The reality today is that AI projects are very expensive, take a long time to develop and implement, and very few professionals are true experts in how to do it correctly (developing artificial neural networks or deep learning).
But this is changing quickly.
AI cost reduction
Research by the ARK Fund on AI says that training costs appear to be falling at twice the speed of Moore’s Law. That means AI hardware and software companies could scale at an annualized rate of about 50%, because they can more easily and quickly access some companies and sectors.
ARK also explains in their forecast that applying the Wright’s Law, an estimation for AI relative compute unit (RCU) production costs could decline at a 39% annual rate and that software improvements could contribute an additional 37% in cost declines during the next eight years. In other words, the convergence of hardware and software could drive down AI.
The cost reductions mean more companies can access this and automate tasks and decisions and boost productivity of knowledge workers.
Subutai- AI for crypto analysis
That’s exactly what we do in Belobaba Crypto Fund with Subutai. We analyze 130 different cryptos, and we provide our traders with an alert system that helps them to know where to look and when to do it. We also give them dashboards and indicators based on AI and Big data to help them to understand what’s happening faster than anyone else. We automated the process of reading and understanding thousands of hours of information by creating a graph that can be understood in a blink of an eye.
The following graph explains the sentiment of the market in the last week and it’s based on the social opinions of thousands of users in real time. It’s more reliable than any other sentiment index we’ve analyzed in the market (like the fear and greed index).
Euphoria&Panic Belobaba Index for BTC last week
As we can apreciate in the Graph, on tuesday at 12:40 we consolidated a level of euphoria in the market just a few hours before BTC rised from 39k to 40,7k. From here, euphoria rised new levels as BTC has taken the actual 42,5k.
Infraestructures of Innovation: Blockchain and AI
But let’s back the the long trends, ARK suggests that the main professional profiles more affected and boosted by AI could be those:
Some of those will be affected also by the blockchain technology. For example, which will be the role of the accountants when the smart contracts automatize the accounting? And the lawyers with the smart contracts? The convergence of technologies is frightening but also full of opportunities.
As an example, one of the biggest barriers for some crypto projects nowadays is the lack of developers in Solidity or other programming languages (or the cost to contract them). OpenAI Codex Already Can Complete 37% Of Coding Tasks. Automatize the translation of code created in different programming languages can be a cross revolution where AI could boost blockchain development projects.
That’s why ARK fund, one of the most innovative funds in Wall Street that manages 50.000 million in assets have done this projection where AI con grow x23 in 8 years, from 2,5T today to 87T in 2030.
AI combined with Blockchain will revolutionize a lot of different sectors. Both are infrastructures of innovation. At the beginning Internet was thought just as a new channel of communication, just like Tv, radio, newspaper, … now we understand that Internet changed all this channels and all the sectors. We can see something similar here with Blochchain and AI, a huge capacity of transformation for any sector anywhere in the world.
Conclusion
Blockchain and AI are two disruptive technologies, one can provide a decentralized network for data sharing among peers, the other one will give us the capacity to manage this huge amount of new info to take better decisions. I just can’t wait to see what’s coming, and you?
Your’s in crypto!!