Discussion on the Current Status of the Encryption Industry and Future Development Trends of AI

As the encryption market gradually emerges from its downturn, the overall sentiment in the industry is not as uplifting as before. Recently, Haseeb Qureshi, managing partner at Dragonfly, had an in-depth conversation with host Mia Soarez, discussing key topics such as the current state of the encryption industry, the positioning of Bitcoin, the impact of AI technology, and the future of human-machine integration.

Industry Status: Tired but Not Pessimistic

The energy of ETH Denver this year is not as strong as in previous years, mainly for three reasons:

1. Conference diversion: Other large conferences are held in advance, diverting attendees' attention.
2. The Rise of Other Public Chains: Emerging public chains have attracted a large number of users and developers.
3. Price slump: The decline in cryptocurrency prices has affected the enthusiasm for attending the conference.

Despite the general fatigue felt across the industry, this "tiredness" is not merely a physical exhaustion, but rather a mental burnout regarding the current state of the industry. However, this pessimistic sentiment could also serve as a positive trigger, prompting people to refocus on substantive development.

Although user experience and mass adoption remain challenges, the industry has made significant progress: tens of millions of people use blockchain daily, creating an asset class valued at over $2 trillion, and it is used globally for peer-to-peer payments. The current issues facing the industry primarily stem from macroeconomic factors and the political environment, rather than the industry itself.

Bitcoin: Has Reached the Ultimate Form

Bitcoin has entered a stage that requires no marketing, similar to gold which does not need advertising. Large financial institutions have instead become Bitcoin's most effective "salespeople". Currently, Bitcoin is basically a "finished product" that does not require much updating, with its core value lying in "censorship-resistant digital gold."

Early Bitcoin had support from multiple institutions and core developers, but over time they became less important. The success of Bitcoin lies in its persistence, addressing the fundamental issue of building a censorship-resistant, permissionless global value storage system.

The Impact of AI on the Encryption Industry

The application of AI in the encryption field mainly focuses on two directions:

1. Software Engineering Automation: AI will significantly reduce software development costs, enabling anyone to quickly create powerful applications.
2. Smart Wallets: In the future, wallets will become users' "encryption currency assistants", automatically completing complex operations and enhancing security.

AI agents can be divided into three categories:

1. "The Wizard of Oz" type: Human control, AI-generated content for selection.
2. Fully Autonomous: Operates independently in a cloud environment, with no human intervention in daily operations.
3. Sovereign AI: Operates completely independently, cannot be shut down or controlled.

The Future of AI and Human Integration

As AI develops, the human brain will readapt to these tools, just like it adapted to smartphones. In the future, brain implant devices may emerge that directly connect to AI devices, becoming an extension of thought.

AI may surpass humans in empathy and attention, which could affect interpersonal relationships. A perfect AI companion may lower fertility and marriage rates, but face-to-face physical interaction will still retain unique value.

In a future where AI dominates content production, human creations may gain scarcity value due to their "imperfections." However, AI is also learning to mimic human traits, including the intentional inclusion of "imperfection" elements.

According to the "Moravec's Paradox," the most difficult skills for AI to master are human physical movement skills. In the future, physical interactive experiences may remain scarce and valuable for a long time, while intellectual activities will become commonplace.

The popularity of AI companions may lead to a significant decline in birth rates, accelerating the trend of population decrease. This may increase the reliance on assisted reproductive technology.

Overall, although the current encryption market is performing well, the industry still needs to remain calm. The near future may be filled with challenges, but the long-term outlook remains optimistic.