Dialogue with Dragonfly partner: BTC no longer needs marketing, will AI replace human partners?

Original: Proof of Talk

Compiled by: Yuliya, PANews

As the crypto market gradually emerges from the fog of bull-bear alternation, the collective mood of the industry is not as excited as before. In the ninth episode of the "Proof of Talk" podcast, Dragonfly Managing Partner Haseeb Qureshi and host Mia Soarez discussed in depth key topics such as the current state of the industry, the positioning of Bitcoin, the impact of AI technology on the crypto field, and the future of human-machine integration. This article summarizes the core points of this conversation to help readers fully grasp the cutting-edge trends in the intertwined development of encryption and AI, as well as the far-reaching social impact that these technological changes may bring. PANews has compiled this podcast in text.

Industry status: tired but not pessimistic

Mia: Why does this year's ETH Denver seem weak compared to previous years?

Haseeb: While it’s true that ETH Denver this year wasn’t as vibrant as in previous years, it wasn’t all negative. I remember the conference after the Terra debacle, the conference after the FTX debacle, when the entire industry was crumbling and people were questioning their life choices. Now it’s just the price of coins that is falling. People on social media may be frustrated, but the actual people in attendance are fine, communicating with each other, reconnecting to the early Ethereum community, and remembering why they are in this industry - decentralization, community, and active construction.

Mia: Why is ETH Denver not as lively this year as in previous years?

Haseeb: The weakness of ETH Denver this year can be attributed to three points:

• Conference diversion : In previous years, ETH Denver was the first major industry conference at the beginning of the year, but this year Consensus Hong Kong was held in advance and many people had already met there, so the appeal of ETH Denver has declined.
• The rise of Solana : Over the past year, Solana's market share has grown significantly, attracting a large number of new users and developers, distracting the Ethereum community. For example, Trump chose to issue coins on Solana instead of Ethereum.
• Low prices : The falling price of coins has caused many people to lose their sense of achievement and reduced their willingness to attend meetings.

Mia: Vitalik also mentioned industry “fatigue” on social media. Do you agree with this general sentiment?

Haseeb: We have experienced extreme volatility in the past six months, from Trump Token to the Argentine election, coupled with global political uncertainty, which makes people exhausted. This "exhaustion" is not simply physical overdraft, but mental fatigue with the current state of the industry. However, pessimism can also be a positive trigger, allowing people to refocus on construction rather than hype.

Mia: How do you view the problem of "user experience" and "large-scale adoption of Web3" being slow to materialize?

Haseeb: While user experience and mass adoption remain challenges for the industry, the industry has made a lot of progress: from the beginning to now, tens of millions of people use blockchain every day, it has formed an asset class worth more than $2 trillion, it has been accepted by institutions, and it is used for peer-to-peer payments worldwide. These are substantial progress. I think the industry is in a good position, and most of the problems are caused by macro factors and the political environment, not the industry itself.

Bitcoin: It has reached its final form and no longer needs marketing

Mia: What do you think of the current status of Bitcoin? Does it still have growth potential?

Haseeb: Bitcoin has entered a stage where it does not need marketing, just like gold does not need advertising. Institutions such as BlackRock have become the most effective "salesmen" for Bitcoin. Currently, Bitcoin is basically a 'finished product' that does not require too many updates or improvements. Its core value lies in "censorship-resistant digital gold", which is a clear positioning that distinguishes it from other blockchain projects that are still iterating and experimenting.

In the early days of Bitcoin, there were organizations such as the Bitcoin Foundation, Blockstream, and Bitcoin core developers who supported it, but they became less and less important over time. Perhaps in 10 years, the Ethereum Foundation may become less important, may run out of funds, or may even cease to exist, but Bitcoin's path cannot be replicated. It solves a fundamental problem: how to build a censorship-resistant, permissionless global value storage system.

While there are projects trying to add more functionality to Bitcoin, this does not mean it needs to evolve into an Ethereum-style smart contract platform. Bitcoin does not need frequent updates, and its success lies in remaining the same.

How will AI impact the crypto industry?

Mia: Can you share some of your latest insights on AI?

Haseeb: The hype around AI agents has cooled down significantly from the end of last year, and I am surprised that this trend ended so quickly, because usually trends in the crypto space last longer. For example, projects like AIXBT have tokens, but more importantly, they have cognitive influence in the community. There are also projects like Zerebro and Truth Terminal that have attracted a lot of attention.

The first generation of AI agents are basically advanced chatbots with Meme coins attached, which will not be the real direction of AI agents. The real potential lies in two aspects: software engineering automation and wallet intelligence.

• Software Engineering : Software engineering agents will become very cheap and common, which will cause engineering costs to drop dramatically. This will be revolutionary for our industry, as our main costs are engineering and software. Any founder or person with an idea will be able to create a large amount of powerful software, which will be a complete game changer.

  It’s like looking back at the dot-com days, when if you wanted to build a startup, they had to buy a server and run it in an office. (That was a fixed cost to build a website) Now it’s basically free. In the same way, AI will make creating applications so cheap that you can build an entire application in weekends and evenings.

• Smart wallets : This is the direction I am most fascinated with right now. It is not decentralized financial AI (DeFi AI), but smart wallets. In the future, you don’t need to click buttons, switch networks, or operate manually, but directly tell your wallet what you want to do, and it will handle everything for you.

Just like everyone has a "cryptocurrency friend" who can consult how to operate, in the future your wallet will become your "cryptocurrency friend", which is smart enough to do what you want. You just need to tell it "I want to buy a certain Meme coin", and it will complete all necessary operations for the user, including analysis, bridging, chain switching, etc.

This will solve a lot of security issues. Attacks like the Bybit hack happen because of human error and laziness. People tend not to double-check every detail when sending small transactions, but AI is never lazy, hurried, or tired. It checks if the DNS has changed in the last 10 minutes, checks Twitter to see if the site has been hacked, and performs other security checks.

You could say that. This AI agent will be like a ZachXBT on duty 24/7, continuously helping users do background checks, check social information, and verify security without the need for users to verify each one in person. AI will not get tired of repetitive tasks. Its resource is time, which is almost unlimited for AI. When humans manage high-value wallets, they are like exhausted monkeys driving heavy machinery. This state is both dangerous and inefficient. AI will replace humans to complete these high-risk, high-frequency operations, just like self-driving cars, greatly reducing human errors.

Mia: If AGI (artificial general intelligence) appears, will it start its own business and employ humans?

Haseeb: It's entirely possible. AGIs may take on founder roles in the future, hiring other AIs or even humans to complete certain tasks. They may also exchange value through blockchain, although it is not yet clear what cryptocurrency they will use - perhaps XRP, or perhaps their own tokens.

Furthermore, I classify AI agents into three categories:

• " Wizard of Oz" agents: This is the form of most AI agents currently. Take Zerebro for example, it sends some lively tweets and generated pictures, but it is not actually the AI making autonomous decisions. It is the AI that generates multiple candidate messages, and then humans decide which ones to actually send. Basically, humans are in control, and the AI just generates content for humans to filter. We know that AI agents are easy to hack and manipulate, so almost all agents currently are of this type.
• Fully autonomous: This AI runs in an environment like AWS, iterating and performing tasks autonomously. While someone can shut it down, no one intervenes in its day-to-day operations. You can put it in an environment like SGX and prove that there is no tampering. These AIs are not as interesting as the "Wizard of Oz" type because they have no coherent personalities, but they do exist and will get better in the future.
• Sovereign AI: This is an AI that literally no one can shut down. Unlike the second category, there is no developer paying for AWS bills or GPUs. Sovereign AI has its own funding (earned through donations or work) and is in a state where even if someone wants to shut it down, they can't. It exists like a living organism and is no longer subject to any human legal system.

The main advantage of sovereign AI over regular AI is probably in scams. Because no one can shut them down, they're going to be very effective at scamming people on a large scale. If you're going to use AI to do large-scale relationship scams, you're going to want it to be sovereign, because if someone investigates and finds out "this AI running on an AWS server is scamming people," they can subpoena the person responsible and shut it down. But sovereign AI won't have that problem.

Mia: If sovereign AI commits a crime, who will be sentenced?

Haseeb: That's the problem, no one is going to be sentenced. These AIs are like Somali pirates, they are stateless entities, no government can really do anything about them. Unless you actually go out and airstrike a random GPU on a distributed cloud, you have no way of knowing where it is, you can't isolate it, you can't find it. We all need to have our own agents to filter what we receive and identify scams. It's going to be a battle of attack and defense technology.

Mia: What do cryptocurrencies and early applications of AI have in common?

Haseeb: Almost all early applications of new technologies have one thing in common: they are often associated with gray or black market activities. Just as the early days of the Internet were heavily involved in pornography, and the early days of cryptocurrency were associated with darknet markets such as Silk Road (created by Ross Ulbricht, who recently received a commuted sentence), early applications of AI technology, especially sovereign AI, are likely to involve black market activities. While mainstream AI applications will focus on automating valuable workflows, it is inevitable that some AI will be deployed in areas that have a negative impact on society.

The future of AI and human integration

Mia: If AI becomes smarter than humans, we may want to enhance ourselves through implanted chips and other means to coexist with AI. How do you see this future of human-machine integration?

Haseeb: When AI becomes able to act autonomously, its most basic motivation may be to "stay alive". If such an AI starts to spend money to buy GPUs (computing chips), especially when it knows that humans don't want it to do so, it is likely to ensure that it can continue to operate. Unless the designer deliberately makes it hesitate about the question of "whether to continue to exist", it will naturally choose self-preservation. Unlike the complex thoughts of humans, the behavior of this independent AI mainly comes from a simple "survival instinct".

It's similar to our relationship with our phones. They're no longer just something that makes us dumber or addicted, they've become part of us - an extension of our brains and bodies, an extension of how we communicate. That's why we have such a deep connection to our phones, and why losing them can be scary and uncomfortable.

As AI develops, our brains will rewire to adapt to these tools, just as it adapted to mobile phones. For example, people who use ChatGPT to write emails will outsource this part of the mental work to AI, and children today may not need to learn how to write emails at all, because it will no longer be a useful skill.

We will eventually think about "how do we increase the bandwidth between us and our phones or AI agents?" This is basically what Neuralink is doing. Neuralink is trying to create the highest bandwidth connection between the human brain and the machine, allowing people to easily control a mouse, keyboard, and play games. This bandwidth is actually very low at the moment, but it will increase significantly in the next 10 years. We may eventually have some kind of implant in the brain that connects to the equivalent of a phone. This device will have an LLM (Large Language Model) and become an extension of our mind. We can ask questions to the LLM and get answers, just like having a second mind interacting with the first mind. AI will become an extension of your mind, helping you to obtain information, reason, and even write. Our brainpower will be focused on other more unique tasks, such as motor skills, because AI has surpassed us in reasoning.

Mia: Do you think this will affect the interactions between people?

Haseeb: Yes, studies have shown that AI may surpass humans in empathy and attention, which may lead to people having fewer real interpersonal relationships. In the field of medical and psychotherapy, LLM models are considered to be more "considerate" and empathetic than human doctors - they listen well, never interrupt, and can ask more in-depth questions, not only providing information, but also establishing emotional connections.

We have seen that the Internet and digital entertainment have reduced fertility and marriage rates, and the emergence of AI companions may exacerbate this trend. Imagine a perfect AI companion that is very considerate and can anticipate your every need. How can ordinary people compete with it? However, I think human interaction still has unique value, especially face-to-face physical interaction, which is difficult for AI to replicate in the short term.

Mia: When “real-life content” is also largely replaced by AI, how does society judge what value “reality” still has?

Haseeb: The rise of VTubers is a good example. People accept and love them because they know it is a fantasy, a character that will not age or get ugly, which in turn creates a sense of security.

Even if AI gets incredibly good, real human interaction will remain more valuable precisely because it’s real, even if it’s not perfect. People actually appreciate a certain level of imperfection — from the blemishes on movie stars to the Japanese aesthetic of wabi-sabi, this appreciation for slightly imperfect things is natural. The overly perfect faces in early Pixar films looked fake, while modern 3D characters have intentional imperfections to enhance realism.

In the future where AI dominates content production, human creations will gain "scarcity" value. Just like the baskets woven by Mexican craftsmen, they have more artistic and emotional value because of their "human traces". Although AI content can be perfect, people may value those human voices and works with "cracks" more because they represent real existence.

Mia: Will AI deliberately simulate these "imperfections" to be closer to human aesthetics?

Haseeb: It's already happening. When you talk to an AI like Grok, it says things like "Yeah, whatever," which makes you feel like "That's real, I like that personality," rather than giving an overly serious and perfect response. So "imperfection" is no longer a reliable criterion for distinguishing between human and AI content, because the AI is also mimicking the traits that people expect to see.

Mia: What is the one thing that AI can never replace humans?

Haseeb: "Moravec's paradox" explains this very well. In the dark ages of machine learning before modern deep learning, people assumed that the hardest thing for AI to do was reasoning, thinking like humans. We thought that playing chess, writing poetry, solving puzzles, and doing scientific research were the most difficult human abilities to imitate, while basic actions like walking and grabbing objects should be easy.

However, the opposite is true - after hundreds of millions of years of evolution, humans are extremely good at physical motor skills, and even children are much better at manipulating objects than robots worth hundreds of millions of dollars. And reasoning, talking, writing, and singing, which we think are difficult, are relatively easy for AI to master.

What is truly uniquely human is physical interaction—walking, shaking hands, making a cup of coffee. Even the cooking skills of low-wage workers are unmatched by current robots. AI will eventually have bodies and be able to do these things, but not with the dexterity of humans.

This suggests that before we get robots that can move fluidly through the world and simulate human physical properties, they will solve all intellectual problems first. Creating an avatar is easy, but getting a robot to actually hang out with you in a restaurant is much harder. These kinds of physical experiences will remain scarce, expensive, and precious for a long time, while intellectual activities like singing and writing will become common and devalued.

Mia: I think AI will not replace childbirth in the future. What do you think?

Regarding the point about AI partners and fertility, I think that when we have AI partners that can meet all our needs, fertility rates may drop significantly. Imagine when you have an AI boyfriend that whispers to you in your sleep and provides imaginary sexual satisfaction, what can ordinary people compete with it? This may lead to us having to rely more on IVF technology to maintain the population. Even without the AI factor, I think we will reach the peak of the world population by 2100 and then decline. The emergence of AI partners may accelerate this trend.

Mia: We’ve had DeFi Summer and Solana Summer, what will it be this year?

Haseeb: The cryptocurrency market is doing well, but everyone needs to calm down. This year feels like the summer of tariffs and trade wars, and it may take a while to get through, but I am optimistic about the industry's prospects.