Eight Trends That Excite a16z For 2024

With 2023 winding down, investors, traders, and crypto aficionados are beginning to set their eyes on 2024.

Venture capital behemoth a16z published today a list of “a few things we’re excited about in crypto (2024).” Ten of the firm’s partners highlighted the trends they are watching and the convergence of key narratives within the crypto industry.

Artificial Intelligence

The thunderous arrival of ChatGPT and other AI tools has taken the tech scene by storm – with a16z partners exhaustively addressing the intersection of AI and crypto.

“Decentralized blockchains are a counterbalancing force to centralized AI,” wrote general partner Ali Yahya, Stanford professor Andy Hall, and data scientist Daren Matsuoka.

They acknowledge that AI models can only be trained by a small number of tech giants, leaving the door open for crypto to create multi-sided, global, permissionless markets where anyone can contribute — and be compensated — for adding computing power or a new dataset to the network.

Ultimately, says partner Carry Wu, “AI alignment” is really an incentive design problem, one that crypto is uniquely ready to address.

Gaming Matures

Play-to-earn becomes play-and-earn, says general partner Arianna Simpson.

As the gaming ecosystem sees a resurgence, Simpson reckons games were not initially designed to be a workplace. However, she writes, Web3 gaming will increasingly morph into a place where users can have fun and reap the rewards of what they’re immersing themselves in.

And as AI agents become more present in gaming, thanks to its transparent nature, crypto stands to become the guarantor of a game not losing its integrity, said Simpson.

Improved UX

User experience challenges have plagued crypto since its birth, even though the industry has been getting a makeover in recent times.

Dealing with self-custody, interacting with a string of letters and numbers to pay hefty transaction fees, and grappling with user interfaces built for tech bros have been barriers to mainstream adoption.

Eddy Lazarin, CTO of a16z crypto, points to 2024 as the year for resetting.

“Developers are actively testing and deploying new tools that could reset frontend UX (user experience) for crypto in the year ahead,” he writes, noting several changes taking place – like simplifying access to dApps through passkeys – which could propel crypto into homes around the world.

Omnipresent NFTs

Starbucks, Nike, Reddit, and other big brands have continued experimenting with NFTs. According to research partner Scott Duke Kominers, NFTs are set to become ubiquitous digital brand assets in 2024.

Kominers writes that brands will increasingly look to this type of technology to capture market share in the ever-growing digital economy.

SNARKS and Modular Technology

A16Z crypto partners highlight SNARKS (Succinct Non-interactive Arguments of Knowledge), which allow for “cheaper” computation to take place, as becoming more widely used in 2024. Use cases could be to verify upgrades, for media editing software, and even remixing memes, says Sam Ragsdale, investment engineer.

Ali Yahya writes that the rise of modular tech stacks will unlock permissionless innovation, enabling more specialization and competition and ultimately leading to better tools for users.

Crypto would be nowhere without its developers, and Daniel Reynaud (research engineering partner) envisions formal verification methods becoming more accessible in smart contract development. This would offer a new wave of more robust protocols less prone to hacks, wrote Reynaud.

We are entering a new era of decentralization, writes Miles Jennings, General Counsel & Head of Decentralization, with 2024 ready to bring forward DAOs as integral counterparts to centralized structures encroaching on personal freedoms.

“We should soon see unprecedented levels of decentralized coordination, operational functionality, and innovations,” he said.