Why Blockchain Tokens and Artificial Intelligence Stocks Can't Be Treated the Same

There are two recent news about crypto investment and artificial intelligence investment that are quite interesting to read:

The first news summarizes the income of some top VCs and predators participating in projects in the crypto ecosystem.

It starts by citing the example of Blur. From the book view, many venture capitalists and predators who participated in the investment have shrunk by 40% on the book alone. This is not only the case with Blur, some classic projects such as UNI, ENS, etc. have caused even greater book losses to predators.

This situation is simply incomprehensible with traditional investment thinking, but it is clear at a glance if you use the thinking of encryption ecology: because the tokens of these projects are basically not empowered by economic benefits.

**The encrypted ecological token can easily give the outside world the illusion that it is the representative of the rights and interests of the project. Since it is the representative of the rights and interests, the revenue of the project will inevitably be reflected in the token. That is to say, if the revenue is good, the token price will be high. **

**But this is not the case in fact. Due to various subjective and objective reasons, many tokens cannot be used to empower the economic benefits of projects, so their utility and value are extremely limited, and their prices are always sluggish--- ---This is especially true in bear markets. **

This illusion has confused many traditional investors and prevented them from obtaining the expected returns on token investment.

The second piece of news reported the views of some of the biggest names in traditional investment circles who are bullish on artificial intelligence and bearish on cryptocurrencies.

Speaking of artificial intelligence, looking at the present, it is a hot spot and focus of attention in the global investment and technology circles. Since the birth of ChatGPT, it has swept all aspects of our lives with lightning speed.

The fundamental reason why such an effect can be produced is that it is a technology that is extremely pursuing efficiency, utility and direct effects. Its great improvement in efficiency can be directly reflected in the daily life and work of each of us, and can be used by everyone. Personal experience and experience.

This kind of feeling and experience is a dimensionality reduction strike, which surpasses all other current information technologies, so it has brought great shock to the whole society. Even netizens who have the conditions to surf the Internet will scramble to try ChatGPT.

While practitioners in the blockchain ecology are still struggling to figure out how to allow more people to participate in this ecology, artificial intelligence has easily captured the hearts of the public with little effort.

Ordinary people are eager to try artificial intelligence, and the investment community, especially traditional investors on Wall Street, are even more eager for it.

The logic of these investors is very straightforward: the leader in artificial intelligence is Nvidia. They believe that the potential of artificial intelligence is far from being released, so there is still a lot of room for Nvidia's potential to be tapped, and buying Nvidia's stock will inevitably have a good return.

If we dig deeper and compare the tokens in the encryption field with Nvidia’s stock, we will find a deeper logic: Nvidia’s prospects, development, and revenue can be immediately reflected in its stock price.

Therefore, as long as Nvidia is a company with great potential, its stock is a good investment product with a lot of room for growth.

**While praising artificial intelligence, these traditional investors have expressed negative views on encrypted assets: they believe that encrypted assets have no intrinsic value. Especially compared with artificial intelligence, encrypted assets seem to have no direct impact on our lives. **

In my opinion, this negative view may contain two meanings:

The first level means that encrypted assets do not reflect the value of the project, that is, the price of the token we mentioned earlier cannot reflect the revenue of the project because it cannot be empowered.

**The second layer means that encrypted assets and encrypted projects lack intrinsic value. **Whether it is DeFi, or NFT, or even games, they are all "dispensable" things, and have no direct effect on our work and life to reduce costs and increase efficiency. Especially compared to artificial intelligence, it pales in comparison.

The first level of meaning reflects reality.

But the second meaning, I think, reflects that most investors lack a long-term understanding of blockchain technology—they still don’t see these "dispensables" in the virtual world for the time being. What is the "function" of things created "out of thin air".

To truly understand the "function" of these things requires a huge leap in thinking.

And this kind of jump in thinking is difficult for investors who are used to the traditional investment field to accept, so they naturally came up with the above point of view.

Little do they know that these "dispensable" and "out of thin air" things are great experiments carried out by human beings in another dimension. And once this experiment breaks through a certain critical point and comes to the world, it will bring us no less shock than today's artificial intelligence.