The layman‘s version of Amara‘s law, the Gartner Hype Cycle, locates AI and Blockchain as emerging technologies that have got past eir first hype, entering a phase of reorientation and searching for traction through use cases, with AI, as in the ABC, leading the pack before Blockchain. One could assume that both technologies would slowly and constantly gather momentum over the next years. Given the paradigm change that comes with Web3, I doubt that we will see slow and linear adoption of AI and Blockchain — we rather will experience the convergence of AI and Blockchain as a hurricane.

The Convergence Thesis

Blockchain is a foundational technology layer that provides a distributed ledger for AI applications built on top of it. The combination or convergence of AI and Blockchain defines what we call Web3, the next evolutionary level of the web. Diffusion 2019 host Outlier Ventures, a UK-based investor in Web3 protocols I recently joined as an Advisor, base their investment decisions on the Convergence thesis. and provided the ideal substrate for creative energy: 50 applications were pitched to several teams of judges at Diffusion 2019, based on 21 different Web3 protocols. Some of these protocols already are quite mature, others in their early proof-of-concept stages. Market expectations towards these technologies have been ultimately high, reflecting Amara‘s law: AI and Blockchain should disrupt whole industries in no time, eliminating intermediaries, or human workers in general. Obviously, this has not happened, yet: there are middlemen, such as notaries or sales agents all around, and we haven‘t seen waves of layoffs.

High Short-Term Expectations

There is a simple explanation: since Blockchain is a foundational technology that starts with the basics of all software processes, a database, it first has to prove its raison d’être and then replace legacy systems in order to demonstrate the above described disruptive effects. AI, i.e. machine intelligence, must first process huge amounts of data per any given use case, before it can start working at all. This often results in a year-long application of AI in niche use cases before any benefit can be realized.

High Long-tTerm Impact

It takes time. This is the underlying insight of the first half of Amara‘s law. The development of emerging technologies usually takes longer than expected. Having worked with Web 3 companies for some time, and having experienced this high variety of protocols and the brilliance of its developers during Diffusion 2019, my prediction is simple and clear: In 2020, coalitions will be formed, consortia will be built and frameworks for collaboratively set standards will be created. This will be a phase everybody will look for an optimal starting position in. Then, beginning with Q4 of 2020, a huge wave of applications, products, and services will be unloaded to the markets. First, it will be B2B applications, enabling industry players to streamline their processes and to launch new businesses. Then, B2C applications will follow. Enterprises that have not defined a proper digital (Web 3)strategy until then, will lose ground. Most enterprises will join the then-existing consortia, either simply because of FOMO (fear of missing out) or because they realize that it is the only way to get their fair share of the market.

The Lull Before The Blockchain And AI Digitization Storm

This projected tidal wave reflects the second half of Amara‘s law: while you are reading this text, many people still are licking their wounds from crypto winter, or doubt that anyone needs distributed ledgers at all. However, others have already started working on alliances and consortia, to be prepared for the positioning game in 2020. My take and my advice for our clients is that you better start now if you want to become a digitalized enterprise. You don‘t have to present a B2C killer app now, but you should define your position and create or join a consortium. The earlier, the better.

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What holds true for employees, is true for business partners, too. And this was the reason for me to agree without hesitation to take a more active role in developing the Convergence Alliance, a brainchild of Jamie Burke, Founder, and CEO of Outlier Ventures, a London-based investor in technologies for an open data economy.

I have known Jamie for quite a few years and we have had many encounters in joint projects, workshops, and conferences. In my view, Jamie is one of the best and brightest minds in the tech space, especially in understanding complex matters in distributed systems and the data economy.

Having also loved working with Outlier Ventures CTO, Aron van Ammers, and Lawrence Lundy, OV’s Head of Research, the decision to devote a significant part of my time to support the Convergence stack and become an Advisor with OV was a no-brainer. I am honored and happy to work together with such great minds and I ‘m looking forward to jointly building a sound framework for Web 3!

The Convergence Alliance

In June, Outlier Ventures, Datarella, and 16 other enterprises and organizations launched the Convergence Alliance CA a group of leading enterprise partners, venture capitalists, technologists, start-ups and academic institutions join forces to better leverage blockchain technology to pioneer the next phase of the Web.

Consisting of the three layers Production (IoT), Distribution (Crypto), and Consumption (AI), the Convergence stack addresses the whole Web 3 ecosystem with highly specialized, though integrated, protocols and service providers. With Datarella, we support Outlier Ventures In coordinating and integrating CA’s individual technologies and projects in order to pave the way for the next generation of smart distributed applications.

At its kick-off event Diffusion 2019, 19–20 October in Berlin,  Convergence Alliance members work together with more than 500 developers and 20 protocols on 50m+ lines of open source code. Read more about Diffusion 2019!

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