At the same time, crypto fundraising was at a three-year low, signalling that crypto winter might not come to an end anytime soon.
a16z, however, remains optimistic about the industry, viewing it as ‘software that eats the world’. Here, we round up a16z’s top crypto predictions for 2024.
1. Decentralisation will enter a “new era”
Decentralisation is ideal in theory, but difficult to achieve in practice. In the crypto space, there are projects like DAOs (decentralised autonomous organisations) where every member has power to vote for a decision, but a16z says they are “not designed for the sociopolitical realities of decentralised governance”.
The VC firm says new decentralised governance models are emerging in the crypto industry. “We should soon see unprecedented levels of decentralised coordination, operational functionality, and innovations,” a16z adds.
In other words, watch this space.
2. AI + crypto, blockchain will become powerful
The meteoric rise of AI in the mainstream has become one of 2023’s most defining trends. There are even memes online about ‘crypto bros’ exiting the scene and pivoting to become ‘AI bros’.
a16z sees AI’s gargantuan force as beneficial to crypto. a16z says that companies like OpenAI are centralised entities. So, “decentralised blockchains are a counterbalancing force to centralised AI.”
“… with crypto, it becomes possible to create multi-sided, global, permissionless markets where anyone can contribute — and be compensated — for contributing compute or a new dataset to the network for someone who needs it.”
3. NFTs will survive
Remember that scathing report that stated 95 percent of NFTs are dead? Our friends at a16z seem to disagree with that, because they are predicting that NFTs will become “ubiquitous brand assets” to attract consumers.
International brands like Starbucks, Nike, as well as online platforms like Reddit are continuing to market NFTs to their audience with good results. a16z states that with NFTs:
“… brands can do so much more: They can use NFTs to represent and reinforce customer identity and community affiliations; bridge physical goods and their digital representations; and even co-create new products and experiences alongside their most dedicated enthusiasts.”