Although projects combining cryptocurrency and artificial intelligence have attracted large-scale investments from retail investors and venture capital firms due to their potential, two renowned venture capitalists have expressed doubts about whether these projects can shake the main AI participants in this cycle and called on builders to consider incentive mechani**s.

Cryptocurrency has a problem of making things that work very well off chain worse, putting them on chain, and then selling them to people who already use on chain technology, "said Rob Hadick, general partner of Dragonfly, a cryptocurrency venture capital firm." We see this phenomenon in all asset classes and narratives... and many things that are happening at the intersection of AI and cryptocurrency technology are basically like this

At the first Emergency conference of The Block held in Prague on Friday, the attending experts initially believed that, AI The most likely value brought to cryptocurrency is simply helping developers improve coding efficiency, as software development remains a core element in the cryptocurrency field.

David Pakman, Managing Director of CoinFund, said, 'AI is a huge software and technology revolution.'. We are building a large amount of software in Web3, and we should leverage AI technology to benefit from many different decentralized applications, whether in terms of infrastructure and security, or in the way user applications operate

However, when it comes to challenging a few large centralized players in the AI field (including AI technology companies from OpenAI to Anthropic and tech giants from Microsoft to Facebook), both venture capitalists generally believe that decentralized AI systems are unlikely to surpass these centralized institutions in this cycle.

Hadick said, "We (Dragonfly) hope to see some product market fit... We have always been very skeptical about the market for applications like decentralized training built around on chain models or on chain machine learning

Although Pakman from CoinFund agrees with this point, he praises the builders who are trying to develop alternative systems.

If we want a highly centralized AI future, we should continue on the current path, "Pakman said." But if we want a different future where the computing resources required to train large AI models are more decentralized and potentially democratically distributed, then we should explore the advantages of Web3 in terms of technology stacking or hardware decentralized access

Have AI agents been overhyped?

At the Emergency conference, other venture capitalists showed enthusia** for AI agents, but Hadick was particularly skeptical about such projects.

Hadick We have already made an investment in AI agents... This could be a winner takes all or winner dominated market. I believe there will be tens of millions or even billions of dollars in cryptocurrency venture capital invested in this field, but almost everyone will lose a lot of money. He also compared the hype around AI agents to the frenzy surrounding cryptocurrency gaming projects in 2021.

Pakman With slight objections, he elaborated on how the future based on AI agents can achieve synergies between AI and cryptocurrency.

One of our strengths in the field of encryption is pointing towards the next big thing... rather than celebrating things that are already in operation, "Pakman said." We finally have payments and the application of encryption in payments and fund tran**ers, so in the intersection of cryptocurrency and AI, I think one direction that is actually helpful today is the future based on agents... These agents will need to interact with money, they will need to make payments on your behalf, or you will need to pay to use them... Cryptocurrency is an ideal foundation for payments between agents and between people and agents

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