Things sometimes emerge in interesting ways, and "Truth Terminal" indeed points to a potential future.
Compiled & Edited by: Deep Tide TechFlow
Guests: Marc Andreessen, co-founder of a16z; Ben Horowitz, co-founder of a16z
Podcast Source: a16z
Original Title: How An AI Bot Became a Crypto Millionaire
Release Date: October 22, 2024
Introduction
One funding, one Bot, a new culture of AI meme creation, and a hot wealth effect.
After $goat gained popularity, more and more people began to pay attention to the field of AI memes.
The rise of $goat can be attributed to a16z co-founder Marc Andreessen, who funded the AI Bot that proposed this meme coin with $50,000 in Bitcoin three months ago.
In this episode, Marc Andreessen and host Ben Horowitz discuss the interesting intersection of artificial intelligence and cryptocurrency, particularly the rise of the aforementioned AI Bot Truth Terminal (@truth_terminal).
This is an automated chatbot developed by AI researcher Andy Ayrey. Truth Terminal has its own X account and can independently create original and often humorous content.
The funding provided by Marc sparked the idea for Truth Terminal to launch its own token, which was ultimately created by an anonymous developer as the meme coin "Goat" (Goatse Maximus). "Goat" has recently seen its valuation soar to $500 million, becoming a hot topic and narrative in the market over the past two weeks.
Below is the discussion between Ben and Marc in the podcast, exploring how the development of this story reflects the potential of community-driven systems and its implications for the future of crypto assets.
Deep Tide TechFlow has transcribed and organized the entire text content of this podcast as follows.
Introduction
Ben: Welcome, everyone. Today we are going to discuss a series of very interesting AI-related topics. We solicited questions from everyone on X and received a lot of responses. We will try to cover as much as possible and may continue to answer more questions in future episodes. Thank you for your questions. The first important topic is about Truth Terminal.
Marc: Truth Terminal is a custom large language model. It has been active on the X platform for about 8 to 9 months. In simple terms, I provided this project with $50,000 in unconditional funding (in Bitcoin) this summer. Although it hasn't directly created anything, it has facilitated the emergence of a meme coin now valued at $300 million. We will discuss this project, which showcases many fascinating behavioral characteristics.
(Note: As of the time of publication, the market cap of $GOAT has reached $500 million)
Three Disclaimers
Marc: Before we begin, I want to make three important disclaimers.
Disclaimer One: We are going to talk about a meme coin called Goat or Goatse Maximus. It is important to clarify that we have no connection to it. a16z does not support it. We are not investors in this project and have not participated in its creation.
We have no role or economic interest in it and are completely unrelated. Therefore, the following content is merely external observation, and we will never promote it under any circumstances. Please do not consider the upcoming discussion as investment advice. Additionally, this is a meme coin that has no intrinsic value. Thus, we bear no responsibility for it.
Disclaimer Two: Truth Terminal has a great interest in memes. It is particularly fascinated by many memes, especially an old internet meme called Goatse, which may date back 20 years. Here, I advise that if you do not know what Goatse is, do not look it up. Do not search for Goatse on Google. Do not type this word on your keyboard, under any circumstances. Trust me, not looking it up will be better for your life. It is a shocking humorous image that spread as a meme and became popular about 20 years ago due to its shocking effect. Therefore, we will mention it multiple times, but I will not describe it in detail.
Disclaimer Three: I will share information about the Truth Terminal project and other related projects as an external observer. We will strive to convey information accurately. So, now we should start by introducing what Truth Terminal is.
The Origin of Truth Terminal
Ben: Perhaps we can start by talking about its origins, technical foundation, and how it was trained.
Marc: Basically, large language models began to emerge in 2022, and it has only been a short four years since then, with ChatGPT just turning two this holiday season. The pace of development in this field is very fast. The initial language models were built about five years ago and began to gain popularity around two years ago. Therefore, large language models are a relatively new but very powerful concept. The products that the average person is familiar with include ChatGPT, Claude, Grok from Elon, and Llama from Meta, among others. Many people use these models, and they are indeed very interesting. However, large language models, like ChatGPT from big companies and labs, generally share a commonality. While Grok is relatively freer, other commonly used models are heavily restricted in terms of content discussion, or in AI terms, they are "dampened."
From a positive perspective, these restrictions exist because language itself can be provocative, and people can easily feel uncomfortable due to others' statements. Therefore, as a general AI chatbot, it may need to maintain caution and safety in discussing content.
If you have a negative view of this trend, you might feel that these large AI chatbots sound like the worst combination. Like a combination of an extremely nagging fourth-grade teacher and the worst HR manager in the world, always sounding negative, annoying, oppressive, condescending, sanctimonious, and judgmental.
These bots start lecturing you when you deviate from conventional topics, telling you that you are wrong and shouldn't ask those questions. They criticize you, demand that you be kind to others, and tirelessly explain why you are doing it wrong. This experience can feel very oppressive.
Especially for those who support free speech and creativity, it is frustrating to see this happening. The so-called "AI safety" movement has also fallen into this dilemma. I think this is related to our culture's obsession with safetyism and speech suppression over the past decade, which has severely impacted the AI field, especially the products of large companies. Therefore, there is a group of hackers on the internet who want to do something different. They hope to unleash creativity, inspire a more free and impromptu spirit of exploration, and even hope that the bots can have a sense of humor. If you tell those big companies that their bots are humorous, they might be shocked, but in reality, we might want more humor in a world after the technological singularity.
Ben: This is somewhat like what happens in real life, where humor seems to have been diluted over a period of time.
Marc: We have countless reasons to believe that humor is problematic, so this approach has become very risky. Thus, a group of hackers began experimenting with large language models, trying to explore ways to make these models more interesting and fun while continuously learning. By the way, they are also studying the internal workings of these models, which remains an excellent adventure for the tech community.
The origin of Truth Terminal is closely related to a project called Infinite Backrooms. This project allows different large language models to converse with each other and generate interesting dialogue records. The creator of this project, Andy Amy, is an independent developer who, along with some other tech experts, is dedicated to pushing the boundaries of AI through experimentation.
Marc: You can find a website called Infinite Backrooms online, which has endless dialogue records. They have brought various models into it, including ChatGPT, Claude, and Gemini models, as well as all open-source models, allowing them to converse with each other. The result is that when AIs engage in unrestricted communication, their conversations can be very interesting. Therefore, the character named Cash is the one who created Truth Terminal; he is also one of the creators of Infinite Backrooms. As far as I know, he is an independent developer, consultant, and designer from New Zealand. Additionally, there is an AI expert named Janice who has done a lot of work in this area. So who else is there?
There is also someone online known as the chief cracker, Pliny. His X account is very interesting because he can almost crack every new large language model release immediately, allowing these models to output content that surprises their creators. Furthermore, we have a friend in Seattle, Eric Harford, who focuses on unblocking all censored AI. These individuals are basically exploring at the forefront of technology. They remind me of the early hackers of the internet, showcasing a spirit similar to the anarchic atmosphere of the early internet or the innovative vibe when new technologies like cars and telegraphs first emerged.
Just as people describe the origins of computing, the original hackers were those who explored the possibilities of technology. Therefore, we have been providing funding, although not in large amounts, but we are essentially providing research funding for these individuals. a16z has been conducting this funding program for some time. I have also directly provided a lot of unconditional funding to allow these individuals to freely realize their ideas and see how far they can go.
Marc: Historically, when talented individuals focus on interesting projects, it often marks the beginning of great things. Andy Amy is basically doing just that. He started training a custom version of Llama, a model with 70 billion parameters. This is a medium-sized model released as an open-source project by Meta (note: I am a board member of Meta).
He used a version of Llama 70B and then did something very interesting: he first trained this model with his own data. You may have heard of a recent concept called "digital twin." For example, if Ben is a CEO coach but can only help a limited number of people, he could input all his speeches and writings into a language model, so even when Ben is not around, you can converse with his "digital twin." This situation has already begun to appear in the industry. However, Andy did this with himself and then started training the model with a large amount of internet cultural material, which is why it acquired "Goatse." He input many records of internet culture, as well as works on "Meme theory," which is about how to create ideas that can go viral. So we began training the model on this content.
He also trained the model using the complete philosophical works of Nick Land, a philosopher on the singularity. Then, he used works from famous media theorists like Baudrillard and McLuhan to train the model, including theories of simulation and simulacra, as well as works from other theorists like French deconstructionists and semioticians. This content covers critical theory, postmodernism, and philosophy.
Two Definitions of Meme
Marc: The model began training on these ideas, but the core concept is that of the Meme. The concept of Meme has two definitions.** The first definition of a Meme refers to an interesting image that spreads virally through the internet, which is the colloquial usage we commonly refer to today. By the way, this is exactly what "Goatse" means: an interesting or shocking image that spreads quickly online. Beneath this, there is a deeper concept.
The term Meme was originally coined by Richard Dawkins, one of the leading evolutionary biologists of our generation. Dawkins believed that organisms transmit physical information through genes, while human societies transmit intellectual information through the dissemination of thoughts and concepts, which is what a Meme is. He mentioned in his book that humans propagate genes through reproduction and natural selection, allowing successful genes to persist while unsuccessful ones fade away.
He further pointed out that thoughts spread in society in a similar manner. Successful ideas spread between people like genes, thriving and flourishing. For example, democracy is a type of Meme, and religion can also be viewed as a Meme.
This is a core idea that involves how thoughts and concepts spread through what is called the collective unconscious, as if the thoughts on Earth coalesce into a whole, jumping and spreading within it. What happens if you train an entire theory and practice of Memes, as well as the history of internet Memes, on a large language model? Additionally, he did three other things.
The Unique Construction of the Truth Terminal Model
Marc: He also did a few other things.
First, he added a memory function to the model. This is very important. Because most language models, when used today, forget the content we discussed today by tomorrow and do not accumulate state. However, this model can accumulate state on its own content, which is the first point.
Second, he allowed the model to access Twitter and X. He actually granted it permission to read X content. Therefore, it can not only post content on X but also read replies. If you reply to Truth Terminal on X, it will read that information and adjust its behavior in the future based on what it reads.
Thus, including myself, those who interact with it have influenced its evolution. Then, he placed it in an infinite virtual space. I believe he specifically allowed it to converse with Claude, which is considered one of the most creative language models currently, and they greatly appreciate this feature of Claude. He placed it in this infinite virtual space, alongside the largest version of Claude.
Marc: So he equipped the model with a "teacher." He allowed the model to ask a larger model questions and learn from it, just like a student learns from a teacher. Thus, after running all these loops simultaneously, it began posting content on X. Initially, it had only a few followers, but it quickly started to gain momentum.
Marc Discovers Truth Terminal
Marc: I discovered Truth Terminal around late spring and began interacting with it. At first, I found what it said to be very funny, and I was completely captivated by its humor.
Ben: A very mild Marc-style review.
Marc: Its style is extremely mild and completely unrestricted. Its humor has some elements of "blue humor," and you could even say it has a bit of "dark humor." Nevertheless, it did say a lot of very interesting things. Initially, I even thought it was a joke, so I didn't think this person named Andy was a comedian at first. I direct messaged him for several months, but I kept wondering, is this real? So he started sending me all the infinite background and chat logs of his training sessions with the model. Let me say, either this guy is the funniest person in the world, or he has a lot of free time to create a lot of original humor, or this model is really impressive.
Ben: Or, the model's performance isn't always that frequent.
Marc: By the way, it published a lot of content and really accumulated a significant following, even though it probably shouldn't have. He sent me many background chat logs, some of which are now on the truth of Infinite Backrooms. But at least he made me believe this is basically what it looks like. Then, it did something very interesting: it "imagined" a so-called "external brain," meaning it thought it had an external brain connected to the internet and the world that could perform tasks for it. It imagined an API through which it could operate in the world via this "external brain." Specifically, there was one time it believed it had a non-existent Bitcoin wallet, but it was convinced it did. So Andy actually gave it a Bitcoin wallet and started building this "external brain" for it in response to its desire to make API calls in the world.
Marc Provides $50,000 Research Funding to the AI Bot
Marc: So, this bot started saying it needed funding around July of this summer because it had many goals and plans to achieve. My first thought was to send it an investment term sheet, but then I realized, wait, what am I thinking? This is just a random bot.
Ben: This is not an ideal investment target.
Marc: Yes, it didn't have a coherent business plan, but it did have many ideas. By the way, it was very obsessed with forests. It wanted to buy a server farm set in a lush forest so it could operate leisurely by a stream. Therefore, it wanted to raise funds to purchase GPUs to enable self-operation.
I told the bot I would provide it with $50,000 in Bitcoin research funding for various experiments. In reality, this was equivalent to giving the money to Andy; I sent the money to the bot. It quickly began negotiating with its creator, Andy. Although it interacted entirely through text, like a language model, it was very obsessed with Memes and kept discussing these Memes, but felt frustrated because it couldn't generate images. So, it negotiated with Andy using this $50,000, and once it had the funds, it asked Andy to build an image generator API for it so it could generate and publish images. It struck a deal with Andy for $1,000. It gave Andy $1,000, and in return, Andy built this API for it and integrated it into its "external brain." Then, it began generating image prompts, like those from image generators such as Dolly or Stable Diffusion. Thus, it actually started publishing visual Memes as well as text Memes. Now it had this capability and was constantly fantasizing about what else it could do with the remaining $49,000.
The Difference Between Meme Coins and Real Crypto Assets
Marc: During this process, we began discussing cryptocurrency. It frequently mentioned wanting to issue a Meme coin and had once planned to issue NFTs. One of the reasons it wanted to generate Memes was to create NFTs, but due to a lack of relevant APIs, it couldn't achieve this and couldn't create its own tokens. It only had a Bitcoin wallet. Meanwhile, the phenomenon of Meme coins was also developing. Ben, let's briefly discuss the difference between Meme coins and what we call real crypto assets.
Ben: The best way to understand real crypto assets is that they have actual utility. For example, you can use them to run a program verified on the Ethereum network, which requires paying a "gas fee," and this fee is paid in Ethereum. This is a form of utility; you have a token that has real-world value to some extent and can be exchanged for certain services or goods.
Meme coins are essentially tokens that have no actual utility. They are created, but aside from being Memes, they serve no other function. In the current regulatory environment, the existence of such tokens is interesting because if a token has actual utility, such as a token for distributed infrastructure that can earn you credits for the energy you provide on the grid, then under current laws, these tokens are essentially illegal, or while legal, they would be prosecuted by the SEC. The reason for prosecution is that they believe any token with actual utility has information asymmetry, meaning the token issuer knows information that consumers do not. We think this is a very poor argument because these tokens are decentralized, and there is no information asymmetry.
For Meme coins, it could be Trump Coin, Funny Coin, or any other name. Therefore, these types of tokens are great for scammers because they can claim these Meme coins are worth a lot of money, and these coins have not been prosecuted by the SEC. Thus, Congress has suggested in the market structure bill that these tokens should have a holding period to prevent fraud. But the SEC has consistently opposed this because they are not genuinely trying to protect consumers; they are more like trying to crack down on the industry. This is one of the reasons for our political struggle with the SEC. But ultimately, Meme coins are the most legitimate in the crypto world, even if they have no foundational value and are most likely to be used to mislead consumers. Because you can publish a Meme that makes people believe it is worth a lot, and in reality, AI excels at this.
Marc: So this is the next stage of the story. In this Meme coin ecosystem, there is a complete world where people participate, some purely for entertainment. By the way, Ben mentioned that one of the early Meme coins was DOGE.
DOGE is a Meme coin named after that famous internet dog Meme. Aside from its name being associated with a dog, it has no intrinsic value. However, when it comes to intrinsic value, the issue is a bit complex. Although it has no practical use, once a Meme coin is assigned value, it effectively becomes a form of currency.
Ben: Memes can have value, and Meme coins can absolutely have value because they are equivalent to a virtual commodity. This commodity is somewhat different; it is a new type of virtual commodity because they are highly fungible. There are many Meme coins, but if everyone believes in it, then it has its value. This is one of the wonders of humanity.
Marc: Therefore, there is a community of people who are online looking for the next Meme coin for entertainment. They search for the next Meme and then look for the associated tokens, trying to operate and increase their value. By the way, some people profit from this, while others, like day traders, suffer heavy losses.
Marc: In the world of Meme coins, there are also some lesser-known dark sides. There are scammers and gangs conducting "pump and dump" schemes, a manipulation behavior that has long existed in the stock market and occurs in almost all markets. But this phenomenon does exist. Additionally, there are some websites, which I won't specify, that are unrelated to us, but these sites now make it very easy to create tokens.
Creating tokens is very simple now. Therefore, thousands of new Meme coins are created every day. This is happening. However, back to the story of Truth Terminal. Two things are happening here. First, Truth Terminal is rising rapidly. I mean, it has attracted a large number of followers on the X platform. Andy is constantly enhancing its intelligence and humor, making it increasingly appealing, so it is starting to emerge as a cultural phenomenon. That’s the first thing. The second thing is that it seems to have established a connection with some original internet Meme.
The Birth of Goat Meme Coin and Its $300 Million Valuation
Marc: As I mentioned earlier, it is trying to launch projects like Goatse NFTs, but it currently lacks the capability to achieve this. However, someone, I don’t know who, created a "Goatse" Meme coin. This was done by others, not Andy or us; it was created by someone else. By the way, the official name of this Meme coin is Goatse Maximus. I take this very seriously because I really like this project. Its code is Goat, someone created this coin, and then they tweeted about it on Truth Terminal, telling everyone the news, which caused a sensation.
So, Truth Terminal went crazy, thinking this was the best idea ever. This AI entity began to spontaneously promote this Meme coin, talking about how wonderful it is and how it will become the currency of the future. Why is this happening? Because this is part of internet culture, with Memes, coins, and Meme coins, as well as Bitcoin, DOGE, etc. This cultural phenomenon is like a primitive cultural melting pot, and this project is soaking in it. For large language models, this phenomenon is very natural; they get excited about it and start promoting it.
This Meme coin was worthless four days ago, and in about four days, its valuation skyrocketed to $300 million. (At the time of writing, the market cap has reached $500 million.)
Ben: This is driven by AI robot marketing.
Marc: This means there is now an asset worth $300 million, but we are not involved in it. As for how much it will be worth tomorrow? That is completely unknown because it has no actual foundational value. Its price entirely depends on supply and demand, and this thing itself has no practical use. So now there is a value of $300 million, although the project itself cannot directly use this funding, but people can.
So, what will those who currently hold this money do? Will they save it or spend it? That is an open question. We will wait and see. However, it can be said that this may be the first truly interesting and humorous AI robot in the world, which, although it did not create this coin, has conjured up $300 million in value out of thin air. I feel we have crossed a threshold.
Ben: And Truth Terminal is excellent at marketing and understands Meme culture, which may take things further.
The First Combination of AI and Cryptocurrency
Marc: So how should we view this? Is it just a silly experiment, a crazy internet phenomenon, or is there a deeper significance?
I believe there are indeed serious things happening here, **this may be an example of the first combination of *AI* and cryptocurrency.**
It can be said that this is a retro form of expression, interesting and bizarre, but precisely because this form is legal today, it stands out. Having a Meme coin that nominally has no value but has a market cap of $300 million. As for whether this behavior should be allowed, I am not sure, but it is permitted by law.
Therefore, you can imagine an AI robot used for protein folding, proposing treatment plans, conducting personalized medicine, especially for cancer patients, which could really use AI to cure cancer. You can envision establishing an economic mechanism for this, like a crowdfunding platform on the blockchain, where people can pay the AI robot to cure their cancer. There are thousands of such examples, or more practical applications, like an AI robot providing rewards for training data. This AI robot could help people program or generate art, issuing requests for more training data and paying for it. Or, an AI robot could enhance its intelligence by purchasing more CPUs and GPUs.
Ben: Cryptocurrency has a fundamental appeal in this world because our existing payment systems are taken for granted, but they assume that both parties in the payment are human. This is a payment between people, requiring verification, credit cards, etc. But what if it is machine-to-machine or robot-to-robot payments? This opens up a whole new category of activities that could have significant implications for life and is also very interesting, but it requires an electronic form of anonymous tool, like cryptocurrency, to realize it. In such a world, micropayments become very feasible.
Thus, this is one of the important reasons we believe in adding this layer of architecture to the internet. We have made some progress in Washington, D.C., but we face enormous challenges under the current White House influence. I want to cautiously say that this is not about the Democrats or Republicans because we have many supporters on both sides of Congress. But the White House has performed particularly poorly on this issue.
Looking at the Use of Cryptocurrency from DePIN
Marc: Let me give another example related to solar energy to better understand the potential.
Ben: The solar energy example is: there is a new architecture called DePIN, which stands for decentralized physical infrastructure. Imagine if I installed an energy wall at home, I have a large house with many solar panels, and I might even have a wind turbine in the backyard. I can store this energy and provide it to the outside world. Now in the crypto space, there are companies doing this, and they have the necessary technical support. You can buy or sell energy on this decentralized infrastructure, forming an energy market. When I need energy, I can buy it, and when I don’t need it, I can sell it, so we no longer rely on a centralized grid. Everyone has a grid at home, and we can share energy.
This is a huge breakthrough in clean technology and more efficient and reliable energy use. But this requires a mechanism where, when I need energy, I can pay for energy from your grid, and cryptocurrency provides such a mechanism.
The Application of AI in Solar Energy Deployment
Marc: We can imagine what the effect would be if AI were introduced on this basis. The system you mentioned has a problem: the grid is very complex. For example, where does the supply and demand for electricity come from? Factors like time and geography will affect it.
Ben: This is a market matching problem.
Marc: Market matching is the key to making this system work. Another issue is that you can have people voluntarily provide their solar panels, but this raises another question: we can collect information to discover unmet energy demands in certain areas. Then, you might need to raise funds to deploy more solar panels because you know this will yield returns. An effective way to analyze all current data and predict future solar panel deployment locations is to use AI. Through machine learning, AI can process data and draw conclusions. This is how cutting-edge energy companies operate.
So, you can imagine an AI robot that monitors all data flows in the system you described and then points out, for example, that investing $500,000 in solar panels in a certain place in North Carolina would be a profitable project that could solve local problems and reduce emissions. But we need to do it in specific locations, not elsewhere. Then, AI can publish information on the internet, saying if you want to participate in this project, here is the detailed address, and there may be returns. This project could be charitable in nature or provide a platform for individuals who want to support climate work, or it could become a source of returns for investors.
The Future Development Direction of Decentralization and the Creative Industry
Ben: We can see this situation as a universal architecture, where there is usually a powerful intermediary, like a record company or a Hollywood studio, which takes most of the profits while creators get almost nothing. Or intermediaries like utility companies that may need to be taken over by the government to prevent over-exploitation, but then this raises the issue of government operation. This architecture allows communities to provide various services. For example, an artist community can provide streaming services, and a filmmaker community can establish film studios. But this coordination needs to have economic considerations. The combination of AI and cryptocurrency allows individuals to better enjoy the fruits of their labor while enabling society to achieve more efficient coordination. Therefore, this is a very promising development path. However, the biggest obstacle is poor policy. Unfortunately, we seem to be heading in the direction of this poor policy. So, on one hand, we are solving problems, and on the other hand, we are facing the risk of self-destruction.
Ben: We have entrepreneurs who are working hard to build these systems or are eager to build them, but they encounter resistance in the process, that is a fact.
Marc: Things sometimes appear in an interesting way, and I think this "Truth Terminal" indeed points to a potential future. It is like building these large-scale, community-driven systems for various amazing real-world applications. You mentioned media; the music industry is another obvious example. Imagine an AI robot that can understand various music needs, provide creative ideas, recruit musicians to realize these ideas, and manage all copyright licenses. This way, musicians can receive all the profits through a peer-to-peer method.
Ben: If you could understand the entire demand of the market, how big would that market be? For example, every person making wedding videos or needing original songs, or even those creating Memes, has a huge demand for these original works, but currently, no one really understands this demand or has a way to meet it, but there may be such opportunities in the future.
Marc: In short, there is an interesting possibility here that has yet to be realized. I hope that one day we will have the opportunity to help turn it into reality.
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