Why can’t we treat blockchain tokens and artificial intelligence stocks equally?

Recently, there have been two interesting news stories about cryptocurrency and AI investments:

The first news article summarizes the returns of some top venture capital and big-name investments in the cryptocurrency ecosystem.

It first lists the example of Blur. On paper, many of the participating venture capitalists and big names have already shrunk by 40%. Not only is Blur like this, but some classic projects such as UNI and ENS have caused even greater losses on paper for the big names.

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

The tokens of the cryptocurrency ecosystem easily give outsiders such an illusion: it is the representative of the equity of this project, and since it is the representative of the equity, the revenue status of the project will inevitably be reflected in the token. That is, the higher the revenue, the higher the token price.

But in fact, this is not the case. For various subjective and objective reasons, many tokens cannot be empowered by the economic benefits of the project. Therefore, their functions and values ​​are extremely limited, and their prices are always sluggish-this is especially true in bear markets.

This illusion has misled many traditional investors, making them unable to obtain the expected returns on token investments.

The second news reports the views of several big names in the traditional investment community 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 ChatGPT came out, it has swept every aspect of our lives at a thundering speed.

The fundamental reason why it can have such an effect is that it is a technology that pursues extreme efficiency, utility, and direct effects. Its great improvement in efficiency can directly reflect the daily lives and work of everyone, and can be felt and experienced personally by everyone.

This kind of feeling and experience is a reductionist strike, which exceeds all other information technologies currently, so it has brought great shock to the entire society. Even netizens who have the conditions to access the Internet will rush to try ChatGPT.

While practitioners in the blockchain ecosystem are struggling to figure out how to get more people involved in the ecosystem, artificial intelligence has effortlessly captured the hearts of the masses.

The general public is eager to try their hand at artificial intelligence, and traditional investors, especially on Wall Street, are particularly drawn to it.

These investors’ logic is very straightforward: the leader in artificial intelligence is NVIDIA. They believe that the potential of artificial intelligence has yet to be fully realized, so there is still a lot of room for NVIDIA to grow, and buying NVIDIA’s stock will inevitably yield good returns.

If we dig deeper and compare cryptocurrency tokens to NVIDIA’s stock, we will find that there is a deeper logic at play: 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 with a lot of room for growth.

At the same time as praising artificial intelligence, these traditional investors express negative views on cryptocurrency assets: they believe that cryptocurrency assets have no intrinsic value. Especially compared to artificial intelligence, cryptocurrency assets seem to have no direct impact on our lives.

In my opinion, this negative view may contain two layers of meaning:

The first layer of meaning is that cryptocurrency assets do not reflect the value of the project. That is to say, as mentioned earlier, tokens cannot be empowered, leading to their prices not reflecting project revenue.

The second layer of meaning is that both cryptocurrency assets and projects lack intrinsic value. Whether it’s DeFi, NFTs, or even games, they are all “optional” things that do not directly reduce costs or increase efficiency in our work and lives. Especially compared to artificial intelligence, they seem to be lacking in this regard.

The first layer of meaning reflects reality.

But I believe that the second layer of meaning reflects the fact that most investors lack a long-term understanding of blockchain technology—they temporarily cannot see what “use” these “optional” things created out of thin air in the virtual world have.

To truly understand the “functions” of these things, one needs to make a huge leap in thinking.

This kind of thinking leap is difficult for investors accustomed to traditional investment fields to accept, so naturally they develop the above view.

They don’t know that these “optional” and “spontaneous” creations are great experiments conducted by humans in another space. And once this experiment breaks through a critical point and comes to the world, the shock it brings to us will be no less than that of artificial intelligence today.

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