Discussion on the Current State of the Encryption Industry and the Prospects of Integration with AI

As the encryption market gradually emerges from a slump, the industry sentiment is not invigorating. Recently, Dragonfly managing partner Haseeb Qureshi engaged in an in-depth discussion with host Mia Soarez on topics such as the current state of the industry, the positioning of Bitcoin, and the impact of AI technology. This article summarizes the core points of the conversation to help readers grasp the cutting-edge trends of the intersection between encryption and AI, as well as their potential social impact.

Industry Status: Tired but Not Pessimistic

The weakness of ETH Denver this year can be attributed to three factors: conference diversion, the rise of Solana distracting attention, and the sluggish coin prices. Although the industry generally feels "fatigued," this sentiment is not entirely negative and may instead prompt people to refocus on actual building rather than speculation.

Although user experience and mass adoption still face challenges, the industry has made substantial progress: tens of millions of people use blockchain daily, forming an asset class valued at over $2 trillion, accepted by institutions, and used globally for peer-to-peer payments. The main problems currently facing the industry stem more from macro factors and the political environment rather than the industry itself.

Bitcoin: Has Reached Ultimate Form

Bitcoin has entered a stage where marketing is unnecessary, similar to gold which doesn't require advertising. Currently, Bitcoin is essentially a "finished product" that doesn't need much updating or improvement, and its core value lies in being "censorship-resistant digital gold." This positioning is clear and distinct from other blockchain projects that are still undergoing continuous iterations and experiments.

Although there are projects attempting to add more features to Bitcoin, this does not mean it needs to evolve into an Ethereum-style smart contract platform. The success of Bitcoin lies in its stability and the lack of need for frequent updates.

The Impact of AI on the Encryption Industry

AI's two main potential directions in the encryption field are:

1. Software Engineering Automation: AI will significantly reduce software development costs, enabling anyone with an idea to create powerful applications, which will fundamentally change the industry landscape.

2. Smart Wallets: In the future, wallets will become users' "encryption currency assistants", capable of understanding and executing complex instructions, automatically completing various operations, while providing comprehensive security guarantees.

AI agents can be divided into three categories:

• "The Wizard of Oz" type: AI-generated content, human-reviewed publication
• Fully Autonomous: Operates independently in the cloud, without human intervention
• Sovereign AI: completely independent and cannot be shut down

Among them, sovereign AI may be used for large-scale fraud and other illegal activities due to its difficulty in regulation.

The Future of Fusion between AI and Humanity

As AI develops, the human brain will readjust to these tools, just as it adapted to smartphones. In the future, brain implant devices may emerge, allowing humans to connect directly with AI. This human-machine integration could change the way interpersonal interactions occur and even impact fertility rates and marriage concepts.

Although AI may surpass humans in many ways, humans will still maintain an advantage in areas such as physical interaction and fine motor control. Real human interaction may be more valuable due to its scarcity.

Overall, AI is profoundly changing the encryption industry and human society, bringing both opportunities and challenges. Industry participants need to remain vigilant, adapt to changes, and seize the development opportunities presented by emerging technologies.