Andreessen Horowitz (a16z) Predicts Crypto Trends for 2024 in ‘Big Ideas’ Report

by Alisa Davidson

Published: December 08, 2023 at 8:14 am Updated: December 08, 2023 at 8:14 am

by Victor Dey

Edited and fact-checked:
December 08, 2023 at 8:14 am

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In Brief

A16z has outlined cryptocurrency trends expected for the upcoming year.

Venture capital firm Andreessen Horowitz (a16z) published its “Big Ideas” report outlining predictions for the industry in the upcoming year. The report covers various domains, including American Dynamism, Bio&Healthcare, Consumer Technology, Cryptocurrency, Enterprise, Fintech, Games, Infrastructure and other areas, closely examining the most compelling trends.

In the realm of cryptocurrency, the company highlighted specific trends that are highly anticipated in 2024, claiming notable advancements.

A New Era of Decentralization

Analysts at Andreessen Horowitz emphasized the mission of decentralization — aimed to democratize systems by facilitating credibly neutral and composable internet infrastructure, fostering competition, promoting ecosystem diversity and providing users with increased choice and ownership.

The efficiency and stability of centralized systems presented obstacles to decentralization earlier.

However, recent years have witnessed a shift in the landscape. Emerging models for decentralization now accommodate applications with advanced capabilities, including innovative approaches such as Machiavellian DAOs that enforce leadership accountability.

“As such models evolve, we should soon see unprecedented levels of decentralized coordination, operational functionality, and innovations”, said Miles Jennings, General Counsel & Head of Decentralization at Andreessen Horowitz.

Revamping User Experience

While experts have criticized the lack of user experience (UX) updates since 2016, developers are actively working on solutions. Innovations include automatically generated passkeys, smart accounts, embedded wallets, MPC (multi-party computation) and advanced RPC endpoints.

“The listed technologies not only help web3 go more mainstream but can also enhance the UX, making it better and more secure than in web2,” explained Eddy Lazzarin, chief technology officer at a16z crypto

Advancement through Modular Technology Stack

Analysts advocated for an open-source, modular tech stack to promote limitless innovation. In contrast to monolithic architectures, this architecture allows participants to specialize and incentivizes more competition. 

Synergy of AI and Blockchain

According to experts, decentralized blockchains are a counterweight to centralized artificial intelligence (AI). Currently, AI models can only be trained and operated by a limited number of tech giants due to significant computing power and data requirements.

With cryptocurrencies, it is possible to create multi-sided, global, borderless markets where anyone can contribute and be compensated for bringing computation or a new set of data to the network for those who need it. As a result, such markets could make AI more accessible.

The underlying technologies behind cryptocurrencies can also be used to track the origin of online content and create the conditions for decentralized control of generative AI.

Play-to-Earn Evolution

Analysts highlight the need for games that are both enjoyable and offer value to players.

“The dynamics of how resulting gaming economies are managed will continue to shift as we see P2E evolve beyond its initial growing pains. Ultimately, however, this will not be a separate trend and will just become part of games”,

predicts Arianna Simpson, General Partner at Andreessen Horowitz

Cryptography Guarantees for AI-Generated Games

Experts noted that AI agents in Web3 games must have guarantees that they are based on certain models and that the latter are executed without corruption. Otherwise, the games will eventually lose integrity.

“When lore, terrain, narrative, and logic are all procedurally generated —  when AI becomes the game maker — we’re going to want to know that that world was built with guarantees…crypto offers such guarantees — including the ability to understand, diagnose, and penalize when something goes wrong with AI”,

explained Carra Wu, investing partner at a16z crypto.

Accessible Formal Verification

Experts emphasized the necessity for more accessible formal verification methods, especially in smart contract development. Recent technologies offer improved developer experiences, reducing vulnerabilities and costly hacks in smart contract protocols.

“With increased adoption of formal methods-inspired tooling among developers and security specialists, we can expect the next wave of smart contract protocols to be more robust and less prone to costly hacks”,

predicted Daniel Reynaud, Research Engineering Partner at a16z Crypto.

NFTs Complementing Brands

Renowned brands like Starbucks, Nike and Reddit are introducing consumers to NFTs, enhancing customer identity and community. NFTs link physical goods with digital counterparts, laying the groundwork for new products and experiences. 

A16z crypto team noted a growing trend in the use of NFTs as consumer goods, often managed through custodial wallets and Layer 2 blockchains with low transaction costs.

The Growing Popularity of SNARKs

Analysts highlighted that SNARKs allow the computation of a ‘cryptographic receipt’ for some compute workload by an untrusted ‘prover,’ making it impossible to forge. In the past, computing such a receipt incurred a 10^9 work overhead compared to the original calculation; recent advances are bringing this number closer to 10^6.

SNARK use cases include Internet of Things (IoT) device upgrades, media editing software for content authenticity, and LLM inferences incorporating authenticity information, and  promising more consumer benefits in other domains.

The venture capital firm Andreessen Horowitz anticipates significant industry developments in its upcoming year predictions. Notably, among these, the company is specifically looking into advancements in artificial intelligence and decentralization.

Each of the listed trends reflects the continuous innovation and transformative potential within the technology and cryptocurrency landscapes, with a promise to further evolve in 2024.

About The Author

Alisa is a reporter for the Metaverse Post. She focuses on investments, AI, metaverse, and everything related to Web3. Alisa has a degree in Business of Art and expertise in Art & Tech. She has developed her passion for journalism through writing for VCs, notable crypto projects, and engagement with scientific writing.

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Alisa Davidson

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Alisa is a reporter for the Metaverse Post. She focuses on investments, AI, metaverse, and everything related to Web3. Alisa has a degree in Business of Art and expertise in Art & Tech. She has developed her passion for journalism through writing for VCs, notable crypto projects, and engagement with scientific writing.

• 
  
  

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