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TL;DR: Managing Partner Jeremy Kranz reflects on the warning signs from social media that led to AI disformation, and the unnerving evolution of click farms to bot farms to AI disinformation farms.  He warns how “action buttons” have the potential to unleash AI-generated disinformation at widespread scale and speed. Truth is so obscure in these times, and falsehood so established, that, unless we love the truth, we cannot know it. – Blaise Pascal Not too long ago, I attended the Singapore Conference on AI (SCAI)  hosted by Singapore’s Ministry of Communications and Information  and Smart Nation Group , in partnership with Topos Institute . The conference focused on AI for good and brought together global thought leaders, scientists, policy makers, and entrepreneurs. It was a unique opportunity to gain insights into regional considerations on AI safety. The SCAI participants produced a paper outlining key questions for AI safety, which you can read about here . During SCAI, I championed two specific topics: the role of AI in disinformation and how to credential/certify AI safety.  For this blog, I’d like to share more about my thoughts on the former. Social Media as Social Nuclear Weapon I rarely make bold statements about the future of technology, but in 2010, I made an exception. I argued that social media will be the nuclear weapon of the next generation. For the first time, there was a tool capable of motivating one million people to be angry at another million people within a 24-hour window, all based on an untruth. The proliferation of anger would be unprecedented and unmanageable. I delivered this message to the leadership of the Singapore government, who understood the gravity of the issue and have taken steps to prevent the worst abuses.   Now, in 2024, I must admit that I underestimated the problem. I have updated my warning for this year: the combination of social media and "action buttons" – the ability to collectively execute a response to AI-generated disinformation at widespread scale –  will be the nuclear weapon of this generation.   AI Disinformation is Older and More Powerful Than You Might Think  While AI holds great promise for the future, I believe its most impactful use today is as a weapon of disinformation. Many technologies of the information age can seem to initially empower more bad actors than good ones (though this eventually reverses). Examples include the web (illegal pornography), online payments and cryptocurrencies (drugs, money laundering), and private encrypted messaging (terrorism). The issue of tech-enabled disinformation is not new. Approximately fifteen years ago, I made the decision not to invest in Facebook at a $10B valuation due to a sophisticated disinformation campaign. Well-organized "click farms" based in Southeast Asia were being paid by Facebook and its supporters  to create profiles and generate clicks, artificially inflating user activity. Upon discovering this, I became apprehensive and walked away.  Since then, these same click farms have perfected their craft. With the aid of AI, they can now create sophisticated video content and conduct millions of tests to manipulate well-intentioned algorithms and the users they serve. As one example of many, in April 2023, a mother received a call  from her daughter claiming to be kidnapped. The mother engaged in a conversation with her daughter, only to later learn that it was an AI bot impersonating her daughter’s voice. An Ever Evolving Disinformation Minefield Let me introduce the term AI Disinformation, or AIDI. These are special AI bots capable of dynamically adjusting to situations in an effort to persuade real humans to take action.  Over the past two decades, we have witnessed a shift from click farms to bot farms, and now from bot farms to AIDI farms. These AIDI farms can create thousands of "people" who influence real individuals.  Nowhere is this more prevalent than in social media. The first generation of Instagram accounts of people who don't actually exist is already here, where we watch their compelling videos and follow their lives, including their aging process. They possess charm, desirability and sometimes even sophisticated reasoning – and earn money too.  The Spanish Instagram model Aitana Lopez  makes over $10,000 a month and is completely AI-generated.  TikTok is an even more explosive sandbox for AIDI, given its target audience of completely online and impressionable users. You may recall a woman who posted on TikTok claiming to have read Osama Bin Laden's Letter to America .  Within days, the content went viral, garnering millions of views and additional postings. How many of those were real and how many were AIDI bots? With certainty, this was a campaign whose goal was political destabilization – making young Americans question the country’s security defense policies, especially its support for Israel.  It is not a mere coincidence that this virality happened just after the Oct 7th Hamas terror attack. AI Collective Action Buttons The successful AIDI bot campaigns on TikTok are experimental but quickly evolving. The cost and manpower required to build these campaigns are rapidly declining. AIDI is being adopted by governments  like Venezuela’s state media  and Chinese operatives.   Activist groups are actively engaging as well, as seen in campaigns around the Israel-Hamas conflict.  What was once an "information war" has now become a "disinformation war." What are the implications of this?  The GameStop trading spectacle  in 2021 served as an early example of people organizing widespread, collective financial action through social forums.  In that incident, retail investors, organized through platforms like Reddit's WallStreetBets, collectively drove up the stock price of GameStop (GME), a struggling video game retailer. The sudden surge in GME's price caused significant financial losses for some hedge funds and led to widespread debates about market manipulation, the role of retail investors in financial markets, and the power dynamics between individual investors and institutional investors. Now, let’s add AIDI bots into that dynamic.   Imagine if the action button - say, for purchasing or selling a stock like in the case of Gamestop - was seamlessly integrated within Reddit. Instead of users navigating the inherent friction of our current system - sifting through Reddit, switching to their Schwab account, selecting stocks, confirming trades, and so forth - what if this friction was eliminated? By reducing obstacles, collective action can be more immediate and timed to the moment of one’s emotional reaction.   AIDI Marketplaces Introducing trading capabilities directly in a forum where participants are already gathered has always been highly efficient.  Not too long ago, people gathered in open outcry trading pits to do that very thing.  Those trades, while sometimes speculative, were always based on a foundation of some truth: a crop report, an employment number, an interest rate cut. But with AIDI, that foundation of truth evaporates.  Moreover, distributed protocols (e.g. blockchain) have allowed for financial transactions to occur anonymously and outside of any centralized marketplace. As a result, trading opportunities have already emerged outside of financial situations, such as politics and social justice.  In 2018, people could place bets on whether public figures would be assassinated on Augur,  a decentralized prediction market.  At least on Augur, those bets were realized given a real-life outcome.  But again with AIDI, the lines blur awfully.  And with an action button as close to the point of (dis)information as possible, the potential for mayhem exponentially increases. The View at Sentinel While AI hopefully has tremendous potential for good,  it currently serves as a potent weapon in the hands of adversaries engaged in financial crimes, digital identity theft, disinformation, and hacking. The very first thing that every enterprise should purchase is what we call AI defense.   At Sentinel, we are eager to invest in companies specializing in this defense against AI-driven illicit activities. Our focus lies in technologies that fortify digital identities, enhance encryption, validate data integrity, and foster trust in decentralized systems. If you resonate with this mission and share our passion for creating a safer, defended digital world, we would love to connect with you. Feel free to reach out to us at hello@sentinelglobal.xyz .

We talk with Sentinel’s Managing Partner, Jeremy Kranz, about his journey as an investor, why institutions will embrace open computing, and the connection between the Grateful Dead and open source. Once in a while you get shown the light in the strangest of places if you look at it right – Scarlet Begonias by the Grateful Dead How did you get started in venture capital? I moved to Silicon Valley in 1997, and have been a VC for 24 years (yikes!) beginning at Intel Capital. For the past 17 years, I built the tech investment group for GIC, Singapore’s sovereign wealth fund. What was the difference between your experience at Intel Capital and what you built at GIC? Actually, in ways they were similar.  At Intel Capital, I was assigned to cover open source software and I loved it. I attended all the important conferences and house parties.  I wore all the swag.  I covertly conducted my work on an unauthorized PC that was loaded with only open source software including the open source imitation of Microsoft Office.  The community was a decentralized, global community of developers who expected open source software to change the world.  And it did. At GIC, I continued to invest in open source.  I made an early bet on Automattic/Wordpress, which exposed me to the first decentralized company (i.e. where everyone works wherever they want with no official headquarters).  I later came across the next iteration of open source – blockchain – where the product itself is literally built for decentralization  I became interested in blockchain because it was a grand experiment to create new financial incentives that exploded the scale of the open source community.  To be clear, I saw blockchain as the next chapter in open source but certainly not the last chapter. How did you go about investigating blockchain? In 2014, I spent the summer doing a deep dive in pioneering open source projects.  That is how I came across Bitcoin.  It had major buzz in the open source community because it was entirely crazy that anyone would try to invent a new software architecture to replace fiat money.  Personally, I wasn’t interested to see a technology replace fiat.  What I cared about was the unprecedented swarming of global talent that wanted to advance blockchains into sophisticated database solutions.  I understood the power of Linux, WordPress, and Chrome.  Blockchains drew in a large, new generation of open source developers.  Once the summer ended, I flew to Singapore and presented my findings on new open source technologies.  To my surprise, over 250 people showed up to hear me speak (and back in 2014, that was relatively huge).  The second half of my presentation was on blockchain, and I focused on the only global project at that time – Bitcoin.  As a way to encourage experimentation, I gave them out for free.  Those accepting my gift had to open up an account with a little known startup called Coinbase. Here is an example of a BTC accepted by a member of the audience. Photo record of a bitcoin accepted by a member of Jeremy’s audience. Wait.  You gave out BTC at a price of $357.33?  It’s around $43,000 at the moment.  How many did you give away? I’m trying to forget! After GIC, you launched Sentinel Global in 2022.  Why? When interest rates are zero, investors got too aggressive, plowing money into any idea that can demonstrate growth.  Sentinel was formed to focus on the solutions to achieve productive growth.  Growth that maintains or expands already attractive margins.  When interest rates are high and supply chains are being reformulated due to geopolitical conflicts, a company must be efficient and nimble. For information technology, one of the best ways to be efficient and nimble is to leverage open computing architectures (OCA).   OCAs allow for increased interoperability, security and flexibility to change.    This is already true if you look carefully.  This is why Microsoft is one the largest contributors to open source software and why they bought Github (the largest repository of open source software).  A big shift for Microsoft – remember that their CEO said twenty years ago that open source was cancer!    We can also see that OpenAI outperformed Google and Microsoft’s research by leveraging OCAs to develop their demo’s efficiently.  Google has the world’s number one browser today – Chrome (based on open source!) – and Microsoft responded by launching The Edge browser, which is based on the same open source as Chrome.  There is absolutely no denying that open source and open architecture wins the day. To be clear, open source is different from open computing, correct?  How? Yes, open computing enables distributed research efforts.  This then accelerates development and lowers business costs.  It also allows greater network interoperability, performance reliability, and compliance oversight. This is why I’m so excited about Sentinel Global and where we exist in the market:  We identify and invest in this next generation of OCA-based business models and technologies.  Ultimately, we believe OCA allows for technology to be built faster, better, cheaper, and safer by adopters. By adopters you mean larger institutions who have been historically slow to integrate new technologies? Technologies that are open to all, like open source in the 1990s and open computing today.   We understand that enterprises need robust legal recourse, customer support, financial reporting, and insurance.  Institutions also need to be laser focused on security and corporate governance.  And we are here to show that open computing is not incompatible with that.  In many cases it can enable it.   Like I said, adopters need applications to be better, faster, cheaper and safer.  Open computing achieves that in three ways: 1) by mitigating business development risks; 2) enabling scalable growth without proportional expenditure; and 3) facilitating seamless interoperability. We have a programmatic effort to call strategics around the world to understand their priorities, budgets, and experiences.  It helps us identify buyers for the start-ups we back.  We gain insight on the tactical lessons for each enterprise and relay those to our founders.  We also match enterprises dealing with similar problems to each other. Switching gears in a way.  You are a proud Deadhead.  Do you think there’s a connection between the Grateful Dead and the openness you find so fascinating in technology communities?  I’m hoping you see a connection and I’m not making this up. I have been a Dead fan my entire life.  They invented a style of music called Jam Band.  They also pioneered a lot of technology – most notably The Wall of Sound –  that paved the way for great sound at stadium concerts.    What many people don’t know about the Dead is that they were an “ Open Source Music Band .” They were the first major band that allowed anyone to record live concerts and replayed anywhere for free. It was a genius strategy.  Fans spread the music and became the marketing engine for the band.  In fact, my favorite ‘album’ is merely a concert that a fan recorded in 1972 at Ken Kesey’s farm .  It is free open source music available online to anyone that wants it.   If you want to talk to us more about our philosophy, open computing architecture, or the Grateful Dead, send us a note at hello@sentineglobal.xyz.

Digital cowrie shells Originally published on Josh's blog Intro Money has always been a social invention, shaped more by collective human agreement than by regulatory or religious decree. From ancient seashells to cigarettes in prisons, “money” is whatever a community is willing to accept in exchange for goods and services. Because money derives its value from collective human agreement — and people’s beliefs, preferences, and behaviors evolve — money and payments too must adapt and transform to reflect shifting societal dynamics and technological innovations. Although real-time payments (”RTP”) networks such as FedNow in the U.S., UPI in India, PIX in Brazil , and FPS in the UK offer instant, real-time settlement, they are exclusive to domestic use and are only designed to support each country’s respective fiat currency. As a result, other assets such as securities, bonds, and alternatives and countries without RTP networks must rely on fragmented and inefficient clearing and settlement infrastructure that typically requires days, rather than seconds, to settle transactions. By connecting all assets to an instant, open, global payment network, tokenization holds the potential to open up access to previously gate kept payment infrastructure and offers a generational opportunity for forward-thinking asset managers to disintermediate banks’ privileged access to official payment networks. Money Today Ultimately, people want money that is interest-bearing, safe, and sound. While bank deposits offer safety and soundness, protected by institutional guarantees such as deposit insurance that insure deposits up to $250k, they offer little to no yield. As of April 2025, the national average interest rate for checking accounts in the U.S. was ~0.07%. Comparatively, the federal funds rate currently sits at ~4.3%. With the current inflation rate at ~2.4%, bank depositors earn a negative real return on their balances. While money market funds offer interest in-line with the federal funds rate, they are not fit for payments because they are uninsured and lack connectivity to a real-time payment system. Our current monetary system fails because there is no money that simultaneously meets the criteria of being interest-bearing, safe, and sound — forcing individuals to compromise on at least one critical dimension when choosing where to store their wealth. How are banks able to get away with paying 0.07% on checking accounts when the fed funds rate is greater than 4%? Banks in the U.S. have a monopoly on payments because they are the only institutions with permitted access to the U.S. payment system (Fedwire, CHIPS, ACH, FedNow, etc). Whenever a nonbank institution wants to access the U.S. payment system, they must do so through a bank’s Federal Reserve master account — the account that provides banks with the ability to settle with other counterparties in central bank money (i.e USD). Through banks’ gatekeeping of the payment system, reinforced by deposit insurance, they are able to get away with paying near zero to depositors. While banks in the U.S. maintain a monopoly over access to America’s core payments infrastructure, blockchains represent a radically different model — an instant, open, global payments infrastructure accessible by anyone with an internet connection. Where blockchains excel as an instant, open, and global payment rail, they lack in their connectivity to the traditional system. Specifically, blockchains lack the ability to settle payments in central bank money — an institutional requirement for any payment rail aiming to compete with incumbent networks on legitimacy, trust, and reliability. Stablecoin Market Structure is Broken Official payment networks settle in central bank money because central bank money provides transaction finality, safety, and systemic stability. As a direct liability of the central bank, central bank money is considered the lowest risk form of money and eliminates the counterparty risks associated with privately-issued forms of money such as stablecoins and commercial bank deposits that carry inherent credit risk. As such, central bank money should be used to settle obligations whenever possible. While many today believe that stablecoin transfers over blockchain rails offer real-time settlement, in reality, stablecoin transfers are a real-time transfer of liability, shifting an obligation (i.e. the stablecoin) owed by the issuer from the sender to the recipient, rather than true and final settlement in central bank money. If we want stablecoins to compete with bank payments on feature parity and user experience, we need to prepare for a future in which consumers place varying degrees of trust across different stablecoin issuers — just as consumers today choose among competing banks based on perceived safety, reputation, and reliability. It’s unacceptable that today’s stablecoin market structure effectively forces consumers to hold liabilities issued by institutions they may neither know nor trust, leaving them exposed to issuer-related risks out of their control. Imagine you’re a customer of Bank of America and someone from the fictitious Fourth Bank of Kentucky sends you money. As a Bank of America customer, would you feel comfortable accepting and storing your wealth in liabilities issued by the Fourth Bank of Kentucky? Definitely not! You’re a Bank of America customer — there’s trust established between you and Bank of America because you know them, and they know you. That trusted relationship doesn’t exist between you and the Fourth Bank of Kentucky. However, this is exactly how the stablecoin market works today. When someone sends you a stablecoin, you’re forced to accept that stablecoin, even if you don’t know or trust the issuer. Just as consumers wouldn’t feel comfortable accepting liabilities from an unfamiliar bank (i.e. The Fourth Bank of Kentucky), consumers should not be comfortable accepting a stablecoin from an unfamiliar issuer. To gain legitimacy as a payment rail, stablecoins must evolve towards a model that respects consumer preferences across different issuers through the introduction of a settlement mechanism for inter-stablecoin payments. Connecting Stablecoins to the Traditional System In order for stablecoins to move towards a model that respects consumer preferences for different issuers, there needs to exist an inter-stablecoin settlement infrastructure to orchestrate and settle obligations across stablecoin issuers. This financial market infrastructure would in turn help consumers only accept stablecoins issued by institutions they know and trust and transition stablecoin payments from a real-time shift in liability system to a real-time settlement system. Real-time stablecoin settlement, however, is only achievable in practice once the stablecoin in dustry agrees upon a standard settlement instrument that can safely and securely settle obligations across issuers. But one problem remains, how do we achieve stablecoin payment settlement finality without access to central bank money? As mentioned previously, banks maintain a monopoly over access to the core payments infrastructure in the U.S., meaning they are the only institutions with the ability to settle payments in central bank money. Stablecoin issuers could rely on banks to provide them access to the U.S. payment system, but doing so could be dangerous with many banks preparing to launch competitive stablecoin or tokenized deposit products once regulation permits it. While there are rumors swirling that some stablecoin issuers such as Circle and BitGo are applying for bank charters, it is unclear whether Federal Reserve master accounts would be granted with acceptance of their respective charter applications. Given the Federal Reserve’s historical reluctance to grant nonbanks with master accounts, it is safe to assume that precedent won’t change any time soon. How, then, should the stablecoin industry go about achieving settlement finality on blockchain rails? In order to facilitate 24/7, real-time settlement for stablecoin payments, the settlement instrument used to facilitate settlement should also move 24/7 and real-time. Since any tokenized asset has direct connectivity to an instant, open, and global payments network, enabling seamless real-time transfers 24/7, a tokenized asset would make a strong candidate for a stablecoin payment settlement instrument. The largest USD-pegged, fiat-collateralized stablecoins USDT (Tether) and USDC (Circle) primarily maintain their reserves in cash and high-quality, short-duration instruments such as U.S. Treausry bills and money market funds to preserve liquidity, stability, and confidence. The reserve compositions of USDT and USDC alike are heavily skewed towards U.S. Treasury bills and money market funds, with ~99% of USDT’s reserves concentrated in U.S. Treasury bills, repurchase agreements, and money market funds, and ~88% of USDC’s reserves concentrated in the Circle Reserve Fund, an SEC-registered government money market fund managed by BlackRock. Since the reserves of major stablecoins are heavily concentrated in money market funds (”MMFs”), MMFs emerge as an ideal payment settlement instrument for stablecoins. While MMFs appear to be an ideal candidate for stablecoin settlement due to their liquidity, stability, and interest-bearing profile, as well as their ubiquity as a collateral asset for stablecoins, MMFs are securities and therefore live on inefficient securities settlement systems that are slow and cumbersome in comparison to modern RTP networks that can process and settle transactions instantly. As a result, traditional MMFs are ill-suited as payment settlement instruments for stablecoins because they rely on outdated securities infrastructure, which lack real-time settlement capabilities; however, tokenized MMFs offer a compelling solution by imbuing traditional MMFs with real-time payments capabilities. Tokenized MMFs are already beginning to gain traction as a settlement instrument within the digital asset economy. Last month, Tassat, Arca, and tZERO announced a joint venture called Lynq — an institutional-grade digital asset settlement network that leverages Arca’s tokenized MMF $TFND as a settlement instrument. Also last month, the DTCC, the post-trade market infrastructure utility, announced a tokenized collateral management platform that allows for collateral to be settled instantly across financial market participants. The CME , CFTC , and ICE (the owner of the New York Stock Exchange) are also in the midst of piloting and exploring tokenized collateral for margin purposes. While tokenized MMFs do not offer the same safety, soundness, and counterparty risk guarantees that central bank money nor commercial bank deposits do, they currently represent the closest tokenized liability available to central bank money due to their high liquidity, stability, and minimal credit risk. As the financial system increasingly moves toward “ tokenizing every asset ,” I expect that other forms of regulated liabilities such as commercial bank deposits and even direct liabilities of the central bank become tokenized. When that time comes, it’s possible that tokenized MMFs get displaced as the de facto payment settlement instrument for USD-denominated stablecoin payments in favor of something that is closer in nature to central bank money. In the meanwhile, asset managers, through the issuance of tokenized MMFs, have a once in a generation opportunity at disintermediating banks by collectively becoming the access point by which the regulated USD-denominated stablecoin economy accesses the U.S. payments system. However, because money is a social invention, it will take collective human agreement and belief that tokenized MMFs are a suitable settlement instrument alternative to central bank money for this bold vision to play out. Conclusion Although robust regulatory safeguards, such as strict liquidity requirements, diversification mandates, and stress testing, are already in place to prevent MMFs from breaking the buck, their adoption as tokenized payment settlement instruments faces one significant barrier — the lack of deposit-like insurance or protection mechanisms. Unlike bank deposits, which benefit from FDIC insurance, MMF investors bear credit and market risks, creating uncertainty in settlement finality. This lack of absolute protection reduces consumer and institutional confidence, limiting MMFs’ viability as a universally trusted settlement instrument. However, the history of U.S. banking prior to the establishment of the Federal Reserve offers a potential roadmap for addressing this issue. Before federal deposit insurance was introduced, banks managed deposit risk through mutualized, privately administered systems such as state-level insurance funds and clearinghouse associations that pooled resources to act as the lender of last resort during financial panics. By adapting this historical precedent, the tokenized MMF market could similarly self organize a consortium-based mutualized insurance fund or clearinghouse to spread risk and create a collective guarantee on deposits, thereby increasing confidence in tokenized MMFs as a secure and trustworthy payment settlement instrument for blockchain rails. Tokenization is quickly changing the future of money. If tokenized MMFs emerge as the primary settlement instrument for USD-denominated blockchain payments, it could effectively open up access to the U.S. payment system to anyone with an internet connection, breaking the current bank-held monopoly over U.S. payment rails. This democratization of payment infrastructure would stimulate competition, reduce costs, and accelerate innovation, empowering underserved communities globally to participate, benefit from, and build on top of the U.S. financial system, transforming the United States into the largest layer 1 (“L1”) blockchain in the world. If you found this piece interesting or want to discuss anything in further depth, feel free to shoot me an email at josh@sentinelglobal.xyz .