4 - 7 minute read
The rise of digital assets such as Bitcoin, Ethereum, and Ripple has taken the world by storm. These digital currencies are decentralized, meaning they are not controlled by governments or financial institutions. They offer a level of privacy and security that traditional financial systems cannot match. Decentralization, disintermediation, and transparency are some of the common themes supporting the narrative of digital assets. But, what does ChatGPT, the AI bot, think about digital assets, and does that pose a threat to investment writers and strategists?
ChatGPT’s views on digital assets might reflect the average opinion of the information and sentiment embedded in the data sources it was trained on. The AI bot could give a sense of the consensus view on digital assets, a collective zeitgeist constructed from an advanced statistical exercise. Therefore, it’s critical to understand its opinions and what it means for investors.
According to ChatGPT, digital assets like Bitcoin and Ethereum can be useful for several reasons. Decentralization, global access, transparency, and programmability are some advantages of digital assets. However, it’s important to keep in mind that they are still a relatively new technology and are subject to high volatility and regulatory uncertainty.
“Bitcoin represents a new way to transact and store value digitally, and is seen by some as a potential hedge against inflation or as a store of value like gold.”
ChatGPT
Decentralization, disintermediation, store of value, and transparency are some common themes that support the narrative of digital assets. But, it’s important to keep in mind that digital assets have a higher degree of volatility and regulatory uncertainty than traditional assets. Therefore, investors must conduct thorough research and due diligence before investing in digital assets. Developing and frontier economies are more focused on store of value and decentralized payment system utilities, whereas developed economies are more interested in refining and upgrading existing financial technology infrastructure via blockchain rails and smart contract platforms.
Prompt: Explain bitcoin to a high school student.
ChatGPT: Bitcoin is a type of digital money that people can use to buy things online. But instead of being printed or minted like traditional money, it’s made using computer code and stored on a public ledger called the blockchain.
Bitcoin is different from regular money because it’s decentralized, meaning it’s not controlled by any government or financial institution. Transactions are processed directly between users without the need for intermediaries like banks or credit card companies.
Because [b]itcoin is decentralized, it offers a level of privacy and security that traditional financial systems cannot match. However, its value can be volatile and there are risks associated with investing in it.
Overall, [b]itcoin represents a new way to transact and store value digitally, and is seen by some as a potential hedge against inflation or as a store of value like gold.
Decentralization, disintermediation, store of value, not controlled by any government, like gold – all common and consistent themes supporting the bitcoin narrative. Let’s keep going:
Prompt: Are cryptocurrencies useful? Please explain in simple terms.
ChatGPT: Cryptocurrencies can be useful for several reasons. Here are some of the most common:
Decentralization: Cryptocurrencies like [b]itcoin and [ether] are decentralized, meaning they are not controlled by any central authority or government. This can make transactions faster, cheaper and more secure.
Global access: Cryptocurrencies can be accessed and used by anyone with an internet connection, regardless of where they are in the world. This can be particularly useful for people who do not have access to traditional banking systems or for cross-border transactions.
Transparency: Cryptocurrency transactions are recorded on a public ledger called the blockchain, which means they are transparent and can be verified by anyone. This can increase trust and reduce the risk of fraud.
Programmability: Some cryptocurrencies like [ether] allow developers to create decentralized applications that can run on the blockchain. These applications can be used for a wide range of purposes, including finance, gaming, voting and supply chain management.
The Bottom Line
Digital assets such as Bitcoin and Ethereum offer several advantages, including privacy, security, and transparency. However, due to their higher degree of volatility and regulatory uncertainty, investors should conduct thorough research and due diligence before investing in them. From a glance at the countries with high search activity for Bitcoin and Ethereum, we can conclude that developing and frontier economies are more focused on store of value and decentralized payment system utilities. In contrast, developed economies are more interested in refining and upgrading existing financial technology infrastructure via blockchain rails and smart contract platforms.
