On-chain AI: The Fourth Revolution of Crypto

Original author: BCH Alpha

Foreword:

Since the birth of Bitcoin, the Crypto industry has roughly undergone three revolutions.

A revolution, by definition, is the subversion of the past; it is the creation of new paradigms and new species that have never existed before.

Every revolution in the history of crypto has greatly propelled the development of the industry and brought about explosive growth for a continuous cycle.

In this cycle (2022-2025), we are at the end of the third Crypto revolution and on the eve of the fourth revolution's outbreak. Therefore, we are witnessing the most awkward Crypto cycle: the entire industry lacks decent innovation, and the whole cycle is just consuming the leftovers of the third Crypto revolution. Although some people have seen a vague outline of the fourth Crypto revolution, everything seems dull and bleak on the eve of the revolution's outbreak.

This article will start with three revolutions in the history of Crypto, and finally focus on discussing the fourth revolution of Crypto and the immense impact it will bring to the entire industry. I believe that after reading this article, you will once again be filled with anticipation and hope for the future of Crypto.

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The first revolution of Crypto erupted on January 3, 2009, which is the birth date of Bitcoin.

The birth of Bitcoin is a revolution against traditional forms of assets. Bitcoin allows humans to own assets that are completely autonomous and not controlled by any third party for the first time.

Bitcoin opened up the era of Crypto, marking the first revolution in Crypto history.

In the years following the birth of Bitcoin, the crypto industry saw the emergence of many altcoins issued through forking the Bitcoin code (later collectively referred to as altcoins), such as Litecoin, Dogecoin, and many altcoins that people no longer remember, such as Feathercoin, Dotcoin, Namecoin, and so on. However, these are merely simple imitations and copies of Bitcoin, with no innovation whatsoever.

It wasn't until six years later that Ethereum introduced smart contracts to the blockchain, allowing the blockchain to be used not only for transfer payments but also for issuing assets and building on-chain applications.

Ethereum has transformed the application scenarios of blockchain technology from points to surfaces, and even into three dimensions.

Ethereum, in relation to Bitcoin, is a new paradigm, a new species.

Ethereum is a revolutionary infrastructure layer compared to Bitcoin.

Therefore, we call the birth of Ethereum the second revolution of Crypto.

All smart contract public chains after Ethereum are imitations or improvements of Ethereum, without any essential changes.

From the birth of the Bitcoin genesis block (January 3, 2009) to the launch of the Ethereum mainnet (July 30, 2015), it took a full six years for Crypto to complete two revolutions.

The third revolution of Crypto occurred in 2020, five years later.

In the summer of 2020, DeFi exploded.

After years of exploration in the crypto industry, it has finally discovered a unique new species that can only emerge from blockchain networks — DeFi.

Decentralized banks (AAVE), decentralized exchanges (Uniswap), decentralized foreign exchange markets (Curve), decentralized funds (Yearn), etc.

DeFi is a revolution against traditional finance and a culmination of the characteristics of blockchain technology.

DeFi operates on the blockchain, therefore, DeFi's data is completely transparent and public (the cost of scrutiny is lower than traditional finance), settlements occur on-chain in real-time (settlement efficiency is higher than traditional finance), and it runs entirely on smart contracts (operating costs are lower than traditional finance, and its credibility is higher). Moreover, DeFi operates 24/7 without borders on the blockchain (DeFi once again surpasses traditional finance in terms of time and space).

Therefore, DeFi can be regarded as the third revolution of Crypto, which is a revolution in the application layer of Crypto.

From 2020 to 2025, the Crypto industry has been in the third revolution, during which no new species beyond DeFi has emerged, including the decentralized principal and income separation protocol (Pendle) and the decentralized contract trading platform (Hyperliquid)), which are merely continuations of the DeFi paradigm. The Pumpfun model is just a combinatory innovation of Bonding Curve + DEX, an extension of DeFi gameplay.

When the industry lacks disruptive innovation and there is no new revolution, it can only rehash old ideas and repeat the wheel, leading to stagnation and a lack of progress in innovation. This is a fact that everyone can feel in this round of the crypto cycle.

So, when will the fourth revolution in the crypto industry occur?

What form will the fourth crypto revolution take?

The first revolution of Crypto brought it from nothing to existence; the second revolution of Crypto perfected its infrastructure; the third revolution of Crypto established that the main application paradigm of Crypto is DeFi, with on-chain finance (DeFi) becoming the best bridge for Crypto to extend into the human world.

It can be said that after experiencing three revolutions, Crypto has gradually matured and improved. Crypto no longer lacks infrastructure, nor does it lack exploration of application directions. For Crypto to further prosper, it needs to build a more prosperous economic network on the existing blockchain financial infrastructure.

To put it simply, for Crypto to further prosper, it needs more on-chain users and more frequent on-chain economic activities. It requires a large-scale explosion of on-chain population to drive the sustained prosperity of the on-chain economy.

So, how can we achieve an on-chain population explosion? How to encourage more people to use Crypto?

Currently, the total number of blockchain users globally is about 560 million, while the population with bank accounts globally is about 4.86 billion. Even if everyone with a bank account uses blockchain for financial activities, the growth potential is less than 10 times (this is just a limit, and in reality, the growth potential may be less than 2-3 times).

Therefore, it is clearly unwise to rely on slowly growing human users to promote the prosperity of the on-chain economy.

Therefore, let us focus our attention on another group that is experiencing exponential and explosive growth — AI.

AI is rapidly developing today, and in the future, the number of AIs will surpass the number of humans (Elon Musk and Ultraman have both said this).

For AI to evolve into AGI (Artificial General Intelligence with autonomous capabilities), it must possess a reliable identity and account system. Currently, there is no organization in the world that can issue a universally trusted ID and bank account for AI, while crypto is inherently capable of doing so.

Therefore, Crypto will undertake the historical responsibility of building identities and asset accounts for AI, and AI will also become the largest user group of Crypto, which we call on-chain AI.

The extensive economic exchanges, business interactions, and social collaborations among on-chain AIs will form an on-chain AI economy, thereby achieving true on-chain economic prosperity.

On-chain AI is inherently more suitable for blockchain than on-chain humans. AI can work 24/7, and so can blockchain; AI's business interactions have no regional or national boundaries, and neither does blockchain; AI's collaboration efficiency requirements are extremely high, and blockchain is perfectly suited for this (all payments, transactions, and task processing on-chain are completed in real-time with high efficiency).

Therefore, on-chain AI will be the fourth revolution to promote the prosperity of Crypto again, which we call the on-chain population explosion or the on-chain population growth revolution.

However, achieving autonomous governance of AI on the blockchain and realizing the prosperity of the on-chain economy is not something that can be accomplished overnight. The most crucial and also the first step is to achieve trustworthy verification of AI on the blockchain. In other words, how can we verify that the identity of AI on the blockchain is trustworthy, and that the inputs and outputs of AI on the blockchain are reliable and verifiable?

The trusted verification of on-chain AI is the primary requirement for achieving great prosperity in the on-chain AI economy.

All economic activities of humans are the same; everything needs to be built on a trustworthy foundation. People's identities, asset information, and business behaviors need to be credible; otherwise, human commercial civilization and economic prosperity are just empty talk. The so-called integrity is the foundation of all business, and this is what it means.

Similarly, the prosperity of the on-chain AI economy also needs to be built on a foundation of trusted verification.

Therefore, whoever can solve the problem of trustworthy verification of on-chain AI can initiate the prosperity of the on-chain AI economy.

Start the fourth Crypto revolution.

It is worth noting that many excellent entrepreneurs have begun to explore the issue of trustworthy verification of on-chain AI, and there are currently two main directions.

One direction is to build a proprietary AI Layer 1, so that all on-chain AI standards and applications are built on the same infrastructure.

A typical representative of AI Layer1 is @0G_labs and @bittensor.

0G mainly builds the AI DA layer, verifying data integrity and quick retrieval through multi-consensus, ensuring the reliability of AI data sources. As a proprietary AI Layer 1, 0G focuses exclusively on AI data storage and access (such as AI model training datasets).

0G only verifies data and not AI output/agents, and does not directly handle AI Agent behavior.

Bittensor emphasizes building large AI models through decentralized incentives, optimizing machine learning with a subnet incentive model. Its advantage is standardization, while its disadvantage is the incompatibility with externally built large AI models. The logic of Bittensor is to use blockchain to construct AI models, with the advantage of vertical specialization, enabling credible verification of internal ecosystem AI, and the disadvantage of being incompatible with external AI models.

Another direction is to directly build an AI trust verification network that verifies the input and output processes of AI, while being compatible with all external AI models.

The typical representatives here are @Mira_Network and @DeepSafe_AI.

Mira forms consensus through multi-model cross-validation and achieves factual consistency, then involves community nodes in the final arbitration, and records proof on the chain, ultimately achieving trustworthy verification of AI. The method Mira employs for trustworthy verification of AI is a social consensus approach based on cross-validation and community arbitration, which emphasizes the verification of AI's output.

Deepsafe constructs the CRVA (Crypto Random Verification Agent) through four cryptographic technologies: Ring-VRF random algorithm, ZKP, MPC privacy computing, and TEE hardware isolation. This allows for dynamic random selection of nodes (rotating every 10-60 minutes) and multi-agent collaborative verification of AI intentions and behaviors. It also supports on-chain/off-chain AI message verification. We refer to this completely cryptographic and mathematical AI trustworthy verification scheme as the mathematical consensus method, and Deepsafe emphasizes the verification of the input and output processes of AI.

The above are the two mainstream directions and representative projects of the AI trusted verification market.

In summary, the AI Layer 1 faction represented by @0G_labs and @bittensor achieves trustworthy verification of AI data through a unified standard AI infrastructure; while the AI trust verification network represented by @Mira_Network and @DeepSafe_AI directly targets the inputs and outputs of AI verification, implementing trustworthy validation of AI through social consensus or mathematical consensus.

It's hard to say which of the two camps will become the mainstream AI trusted verification solution in the future. However, it is clear that the AI Trusted Verification Market (ATVM) is gradually opening up, and more and more outstanding entrepreneurs are entering this field.

I believe that as the AI trusted verification market grows, there will be more and more trustworthy AIs operating on the blockchain. Currently, there may only be hundreds of thousands or millions, but in the future, there will be several times the number of AIs on-chain compared to the human population on-chain. They will become the mainstream users on the blockchain, and a large amount of on-chain business transactions and commercial activities will occur between on-chain AIs and on-chain humans, as well as among on-chain AIs, thus giving rise to a true on-chain economic prosperity.

Perhaps, in the next 3-5 years, people will witness a great prosperity of on-chain AI economic networks, and they will refer to this process of exploring trusted verification of on-chain AI as the fourth revolution of Crypto.

The views mentioned in the text about on-chain AI, AI trusted identity and account systems, as well as the blockchain being the identity and account system for AI, and AI being the largest user group of blockchain, have already been detailed in my 250,000+ viral article “The Final Thoughts on Crypto+Agent” written at the beginning of the year. Friends who want to know more can click to read.