Sauron, the ancient Dark Lord, and Saruman, the wizard turned rogue by the palantír’s seductive gaze, then vied for power and dominion over Middle-earth in J.R.R. Tolkien’s The Lord of the Rings.
A leaked internal memo from OpenAI CEO Sam Altman to his execs last month revealed deep concerns about the overvalued LLM house. Penned just before Google’s Gemini 3 launch on November 18, the memo invoked ‘rough vibes’ and a shift to ‘wartime footing.’ Mr. Altman acknowledged Google’s strong progress and warned that potential revenue growth could slow to single digits amid economic headwinds.
This year, OpenAI is reporting impressive hypergrowth—projected 2025 revenue of around $13 billion. But this initial surge masks structural fragility: annual cash burn exceeding $8-9 billion, cumulative losses potentially reaching $115 billion through 2029, and a valuation (recently reported at $300-500 billion) that implies sky-high multiples. OpenAI is also experiencing a slowing rate of app downloads and active usage, plus a whittling of market share.
Mr. Altman’s memo recognizes the Dark Lord’s vast resources and seamless integration with billions of users across Search, Maps, YouTube, Android, and Workplace😳—that devours our behavioral data along the way, creates closed loops, and sells us off to the highest ad bidder. Gemini 3 will integrate instantly into these powerful ecosystems—while OpenAI requires separate sign-ups, subscriptions, and marketing to build and sustain its user base. Google’s custom TPUs also deliver superior efficiency over rented GPUs, lowering costs and enabling co-design of hardware and software.
We will boldly predict that OpenAI, like Saruman, will be decisively defeated in the market and ultimately forced to sell—probably to Microsoft or SoftBank—at a price well below what its late-stage investors paid. As Sam Altman has acknowledged, ‘Someone is going to lose a phenomenal amount of money.’ Google, like Sauron, will continue to wage war on us, selling us at wholesale prices to the highest bidder, but will ultimately be permanently destroyed by the Web3 revolutionaries dedicated to helping us take back the power.
Chinese AI lab DeepSeek just released two open-source models (685B parameters each) that reportedly outperform GPT-5 and Gemini 3.0 Pro on benchmarks like AIME (93.1%), HMMT (92.5%), and earned gold-medal status in the 2025 International Mathematical Olympiad. They support 128K token contexts and are available under the MIT license, with DeepSeek V3.2-Speciale merging into the standard release by December 15.
The hobbits of Silicon Valley’s quiet DeAI rebellion
As the Big LLM war intensifies, a quieter force—ordinary users and decentralized builders—will ultimately reshape the AI age. Projects like Bittensor, Fetch.ai (part of the Artificial Superintelligence Alliance with Ocean Protocol and SingularityNET), Render, and Sahara AI are building blockchain-based ecosystems for collaborative model training, data marketplaces, autonomous agents, and on-device inference.
Decentralized AI (DeAI) refers to a paradigm that integrates artificial intelligence (AI) with blockchain and distributed ledger technologies to create open, transparent, and permissionless AI systems. Unlike centralized AI models controlled by a few large corporations (e.g., OpenAI or Google), DeAI distributes data storage, model training, computation, and governance across a network of nodes, enabling collaborative development without a single point of control.
In the end, as in Tolkien’s tale, the hobbits prevail. While the Dark Wizards exhaust themselves in unsustainable strife, everyday builders and privacy-conscious users forge a resilient, decentralized future—proving that true power emerges not from towers of domination, but from the quiet courage of those who claim ownership of their own rings.
Loading...
Meet the DeAI hobbits
We note that most of the influential Web3 hobbits have yet to be founded. But here is a solid representative list of early hobbits currently on the front lines on DeAI innovation.
Core/Established Hobbits
Artificial Superintelligence Alliance (ASI)| Founded: 2024 | Merger of Fetch.ai, Ocean Protocol, and SingularityNET—building decentralized AI agents, data marketplaces, and services for user-controlled superintelligence. | Total VC$: $83M (pre-merger total; includes 2024 strategic round) | Lead Investors: DWF Labs, Outlier Ventures, Ascensive Assets
Bittensor (TAO)| Founded: 2019 | Decentralized machine intelligence marketplace where users contribute data/models, earn TAO tokens for incentives, and maintain sovereignty through blockchain-verified privacy and peer predictions—with leading network scale and adoption. | Total VC$: Limited traditional VC (ecosystem investments via funds like dao5 and DCG) | Lead Investors: Polychain Capital, Digital Currency Group, dao5
Render Network | Founded: 2017 | Decentralized GPU rendering and compute platform enabling distributed AI training/inference on idle hardware, with users monetizing unused GPUs for privacy-preserving workloads. | Total VC$: $30M+ | Lead Investors: Multicoin Capital, Solana Foundation, Alameda Research
Calanthia Mei: Formerly from PayPal Ventures, and now Cofounder and CEO of San Francisco-based Masa Network, a leading decentralized data network working with over 70 Web3 projects like Avalanche and Polygon.
Emerging Data & Privacy-Focused
Raiinmaker | Founded: 2018 | Decentralized AI training platform using Web3 to let users contribute and monetize personal data/expertise for custom models in gaming, sports, and entertainment. | Total VC$: $12.5M | Lead Investors: Jump Capital, Cypher Capital, Ripple
PIN AI | Founded: 2024 | On-device personal AI assistants aggregating user data across apps via blockchain for privacy, ownership, and monetization of personal models/insights. | Total VC$: $10M | Lead Investors: a16z CSX, Hack VC, Anagram
PublicAI | Founded: 2023 | Web3 platform for decentralized AI data labeling/training; users earn tokens by contributing knowledge to build user-owned datasets. | Total VC$: $12M | Lead Investors: IBC Group, Saudi Telecom Company, IOBC Capital
Masa Network | Founded: 2021 | Decentralized data marketplace protocol for personal data ownership—users store, share, and monetize data for personalized AI without intermediaries. | Total VC$: $9.2M | Lead Investors: Anagram, Digital Currency Group, Borderless Capital
Perle | Founded: 2024 | Web3-powered AI data training platform where users contribute/monetize personal data for privacy-preserving model development. | Total VC$: $17.5M | Lead Investors: Framework Ventures, CoinFund, Protagonist
ORO AI| Founded: 2024 | Decentralized platform for contributing private data to AI models with cryptographic privacy and ownership; users earn rewards. | Total VC$: $6.5M | Lead Investors: Delphi Ventures, a16z CSX, Orange DAO
Bluwhale | Founded: 2024 | Decentralized AI network for personalized financial health agents on blockchain, with full user data sovereignty. | Total VC$: $17M | Lead Investors: UOB Venture Management, Galaxy Digital, PAID Network
Apheris | Founded: 2019 | Federated learning platform for privacy-preserving AI collaboration on sensitive/personal data (strong in life sciences). | Total VC$: $20.8M | Lead Investors: OTB Ventures, eCAPITAL, Octopus Ventures
Sahara AI | Founded: 2023 | Decentralized AI blockchain platform for sovereignty and provenance of AI assets, enabling privacy-preserving creation, collaboration, and monetization of data, models, and agents with fair compensation. | Total VC$: $49M | Lead Investors: Pantera Capital, Binance Labs, Polychain Capital
Infrastructure & Agent Hobbits
Artela | Founded: 2023 | EVM-compatible blockchain for extensible, on-chain decentralized AI agents with user-controlled logic and data management. | Total VC$: $6M | Lead Investors: Shima Capital, Amino Capital, SevenX Ventures
Joinable Labs | Founded: 2023 | Decentralized “answer engine” with personal data wallets for private AI queries, blending on-chain and proprietary data. | Total VC$: $2M | Lead Investors: Accomplice Blockchain, Tess Ventures, VitalStage Ventures
io.net | Founded: 2022 | DePIN for GPU compute in AI inference/training; users monetize idle hardware with privacy via decentralized access. | Total VC$: $30M | Lead Investors: Hack VC, Multicoin Capital, Solana Ventures
Gensyn | Founded: 2020 | Peer-to-peer ML compute protocol for training AI models on distributed hardware, with cryptographic verification ensuring data privacy and user rewards. | Total VC$: $50.6M | Lead Investors: a16z Crypto, CoinFund, Protocol Labs
In happier days before the betrayal. YouTube cofounder Chad Hurley, Google CEO Eric Schmidt, Steve Jobs, and Google cofounder Sergey Brin chat at Macworld 2008 at the Moscone Center in San Francisco.
‘I will spend my last dying breath if I need to, and I will spend every penny of Apple’s $40 billion in the bank, to right this wrong. I’m going to destroy Android, because it’s a stolen product. I’m willing to go thermonuclear war on this. Our lawsuit is saying, ‘Google, you fucking ripped off the iPhone, wholesale! We’ve got you red-handed. I’m not interested in settling. I don’t want your money. If you offer me $5 billion, I won’t want it. I’ve got plenty of money. I want you to stop using our ideas in Android, that’s all I want.’
Apple’s iPhone shipments are projected to reach approximately 243 million units in 2025, surpassing Samsung’s estimated 235 million units, marking a 14-year shift in leadership for the world’s largest smartphone maker by volume. This projection gives Apple a 19.4% share of the global market, edging out Samsung’s with 18.7%, amid 3.3% year-over-year growth with about 1.25 billion total smartphones shipped.
Introducing dApps that cover 90% of the Google stack
The good news: An emerging flock of privacy-centric alternatives to Google’s ecosystem now offer battle-tested options for email, storage, messaging, search, and more. Many of these upstarts are backed by major VC firms or by self-sustaining models that respect user privacy and ownership, and offer lower costs (often free). Here follows our curated list of viable replacements. Join us by deleting your Google accounts and going full sovereign!
Rocket.Chat CEO and founder Gabriel Engel with Nextcloud CEO and founder Frank Karlitschek
Proton: Provides end-to-end encrypted email, calendar, drive, and docs; top investors: CRV, Fongit, European Innovation Council (EIC Fund—€15M in 2023, ~$40M total funding).
SimpleLogin (Proton-owned): Offers unlimited masked/alias emails forwarding to your real inbox; top investors: Acquired by Proton for $5M in 2022, no independent VC.
Tutanota: Delivers end-to-end encrypted email, calendar, and secure contacts with zero-knowledge architecture; top investors: Bootstrapped (no VC; profitable since 2020 with €10M+ ARR).
Nextcloud: Delivers self-hosted private cloud storage, office suite, and photo sync; top investors: Employee-funded (no VC; dominant open-source player with 200K+ enterprise installs and ~$3.9M revenue).
Signal: Enables encrypted messaging without phone number requirements; top investors: Brian Acton (WhatsApp co-founder; $50M+ personal funding), Signal Technology Foundation, no traditional VC (market dominant with 40M+ MAU).
Element (Matrix) cofounders Matthew Hodgson and Amandine Le Pape.
Element (Matrix): Powers decentralized encrypted chat, voice/video, and communities; top investors: Protocol Labs ($30M Series B in 2021), Metaplanet, Notion Capital (over 35M users).
Brave: Builds an independent, no-tracking search and ad-blocking browser; top investors: Founders Fund, Foundation Capital, Pantera Capital ($42M Series A in 2023; 36M users).
Filecoin: Supports permanent decentralized file and website hosting; top investors: a16z ($250M+ total), Sequoia Capital, Union Square Ventures (via Protocol Labs; $257M ICO in 2017; dominant in DePIN storage).
Mastodon: Runs decentralized censorship-resistant social networking; top investors: Non-profit, Crowdfunding/grants; 10M+ users; ActivityPub standard leader, no VC.
Bitwarden: Provides open-source, end-to-end encrypted password management and secure sharing; top investors: PSG ($100M Series B in 2022), Battery Ventures, Redpoint Ventures.
Presearch: Offers decentralized, privacy-first search with token rewards for users/nodes; top investors: Psalion, Alpha Sigma Capital, Outlier Ventures (~$852K seed in 2018; Web3 search market leader).
Speaking of Eric Schmidt (Google’s CEO from 2001 to 2011), he was always viewed in Silicon Valley as the classic nerd who never got any action with the opposite sex until he made his billions. And the story gets darker after that, but we leave that stuff for Page Six.
The filings assert that Mr. Schmidt turned this trick on the defendant by rifling through her Gmail, texts, and Google Drive accounts, and surveilling her movements and communications over several years. Mr. Schmidt’s legal team, for their part, is dismissing the claims as ‘fabricated’ and a ‘transparent hit piece.’
#DeleteGoogle is not a mere slogan but prudent self-defense
For the sake of educating and protecting the rest of us, we hope the defendant keeps this a matter of open court. She will still make the big money, and might do us all a service by exposing the dark side of Big Tech. We need to be reminded that our data is not safe in anyone’s hands except our own, and turning to the solutions that guarantee our privacy by scattering personal data across resilient, permissionless blockchain networks is urgent.
Donald Trump Jr., Eric Trump, and even 19-year-old Barron Trump are listed as co-founders, with the former president as ‘CoFounder Emeritus.’ Barron is dubbed the ‘DeFi visionary,’ but at 19 has no proven track record in crypto engineering or governance, and this reeks of nepotism over expertise. The platform, built on Ethereum with integrations like Aave and a USD1 stablecoin, aims to ‘keep the dollar digital.’
When WLFI went public with massive hype on September 1st, the company raised $550 million during the sale, with the Trumpsters pocketing 75% of those token revenues (~$390–$412.5 million), a blatant self-enrichment plan fueled by pay-to-play. As of December 3, 2025, WLFI is down ~41% YTD and more than 50% from its all-time high.
‘Crooked Nancy Pelosi, and her very ‘interesting’ husband, beat every Hedge Fund in 2024. In other words, these two very average ‘minds’ beat ALL of the Super Geniuses on Wall Street, thousands of them. It’s all INSIDE INFORMATION! Is anybody looking into this??? She is a disgusting degenerate, who Impeached me twice, on NO GROUNDS, and LOST! How are you feeling now, Nancy???’
This amateur act is already spreading to their partners. In August, WLFI inked a $1.5 billion token deal with Nasdaq-listed Alt5 Sigma (ALTS). Since then, Alt5 has burned through two CEOs in six weeks, suspended its first one without explanation, fired the acting CEO ‘without cause,’ missed SEC filings, received a Nasdaq non-compliance notice, and now faces a threatened whistleblower complaint over alleged disclosure fraud. Its stock has collapsed more than 80% from its Trump-pumped highs.
The only thing that has proven thus far is that the Trump brand is a powerful short-term asset, and the First Family will shamelessly exploit it to add to their billions. These greedy moves are not good for their loyal investors, the crypto industry, nor the image of US leadership.
Mr. President, thank you for your attention to this matter.
“Our work and collaboration with the Trump administration has been very effective and dramatically reduced flows, and yielded unprecedented results in security along the border within the framework of respect for our respective sovereignties.”
💡 We’re a community-supported site, with the goal to keep our content free for thousands of young readers worldwide. Subscribe now at a 33%-discount for just $6/month—the price of a medium cup of designer coffee—and help power Cryptonite. 🚀
🔒 Paid members also unlock perks, like early access to our next-generation Web3 company research, reporting, and analytics, special event invites, and discounts.
Your subscription fuels the decentralization of power movement—and proof that independent, transparent voices, with whom you might not always agree, but trust, have the power to own their voice and content.
Thank you for being part of the journey. — The Cryptonite Team. Huff Puff 😅
Special offer: Act now and get 33% off our regular rate, plus receive 300 Cryptonite PRO (CPRO) coins and a ‘Cryptonite Original’ NFT badge.💎
A UC San Diego report helps us understand why GenZ is such a confused group and why the current education system needs to be completely dismantled. It should be no surprise to any attentive GenZ parent that enrollment trends from 2020 to 2025 show an increasing number of unprepared students showing up on campus.
The study found a 30-fold surge in students below Middle School math proficiency.😳 Further, the percentage of domestic first-year students failing the ‘UC Entry Level Writing Requirement’ climbed from 12% in 2020 to 18% in 2025, with 40% of remedial math students also needing writing remediation.
Sadly, the warnings in Charlotte Thomson Iserbyt’s 1999 book The Deliberate Dumbing Down of America—which highlighted shifts in teaching methods and curricula that prioritized process over rigorous academic outcomes—and the 2010 documentary Waiting for “Superman”—which exposed systemic failures like failing schools and barriers to reform—appear largely affirmed.
The ‘worm in your head’ is an obsessive, self-destructive thought loop that gnaws at your sanity like a parasite, symbolizing surrendering to inner fascism, paranoia, and mental collapse.
In our last issue of The Rap, we posted a similar survey as below, and, while the response was small, it showed that 35% of our readers say political violence may be necessary to ‘set the country on the right track,’ which is 5% above the national average. Let’s try this again.
Loading...
Driving this rising acceptance of violent political protest amongst the youth is what appears to be a new acceptance of hate as well. This trend both surprises and alarms us. The adage that ‘hate hurts you more than them’ is one of the most recurring findings in psychoneuroimmunology and stress research of the last 50 years.
Chronic hostility/hatred triggers the same chronic stress response as fear or anger: elevated cortisol, inflammation, faster cellular aging (via shortened telomeres), and weakened immune function. As strong a risk for cardiovascular disease and depression as smoking or high cholesterol.
Neuroimaging shows hatred literally hijacks the same circuits used for physical pain and threat detection, and also deactivates areas involved in empathy and complex reasoning. In plain language: hate makes you physiologically sick and cognitively dumber over time.
Mental and emotional damage
Psychologists distinguish ‘episodic anger’ (healthy, short-lived) from ‘chronic dispositional hatred.’ The latter becomes an identity: ‘I am the kind of person who hates X.’ Once it’s part of identity, the brain starts seeking evidence to justify and intensify the hate—confirmation bias on steroids!
Hostility is one of the strongest predictors of clinical depression and anxiety disorders. People who score high on hostility scales have dramatically lower life satisfaction and higher rates of anxiety disorders and psychiatric breakdowns.
Cognitive damage
Chronic hatred narrows attention and reduces activity in the prefrontal cortex (reasoning, nuance, empathy). You literally get dumber the longer you marinate in it
Long-term studies (e.g., longitudinal research on intergroup hatred) show that people who maintain high levels of hate toward an out-group have significantly lower life satisfaction, and even shortened telomeres (a biological marker of accelerated aging).
Spiritual/relationship damage
Hatred is the single best predictor of social isolation and broken relationships over time. It becomes a self-fulfilling prophecy: the more you hate, the more people pull away, the more ‘proof’ you have that the world is against you.
Science shows the best ways to reduce hate are: 1) sustained humanizing contact with the hated person/group, 2) perspective-taking exercises, 3) mindfulness or cognitive reappraisal training, and 4, in severe cases, therapy (especially CBT or ACT), and 5) regular prayer and meditation.
Never hating the person—while still rejecting evil—is absolutely a central tenet in the Judeo-Christian and American Republic traditions we have lived by for 250 years. The Hebrew scriptures say ‘Hate the evil, and love the good,’ Amos 5:15. Jesus was even more emphatic, ‘Everyone who hates his brother is a murderer, and you know that no murderer has eternal life abiding in him.’ 1 John 3:15. In President Lincoln’s Second Inaugural: ‘With malice toward none, with charity for all…’
However we each find our inspiration, science overwhelmingly supports this reality: Hate is a slow-acting poison that inflicts terrible damage to your body, mind, and soul. May peace✌️ be with us.
Watch the Beatles’ John Lennon rock with The Stones circa 1968
Recorded before a live audience in London in 1968, it centers on the original line-up of The Rolling Stones—Mick Jagger, Keith Richards, Brian Jones, Charlie Watts, and Bill Wyman, who performed six Stones classics. The program also includes performances by The Who, Jethro Tull, Taj Mahal, Marianne Faithfull, Yoko Ono, and The Dirty Mac— a ‘supergroup’ that comprised Eric Clapton, Keith Richards (bass), Mitch Mitchell of The Jimi Hendrix Experience (drums), and John Lennon on guitar and vocals.
Loading...
Loading...
Dear Readers,
💡 Cryptonite is powered by a community like you, dedicated to keeping our insightful content free for thousands of curious young minds around the world. Join now with a 33% discount—just $6 a month, about what you’d spend on a fancy coffee—and help us keep the momentum going. 🚀
🔒 As a paid member, you’ll gain exclusive perks: early access to cutting-edge Web3 research, in-depth reports and analytics, invitations to special events, plus member-only discounts.
Your support drives the decentralization of power and proves that independent, transparent voices—voices you can trust even when you disagree—can still own their message and content.
Thanks for being part of Cryptonite’s journey. — The Cryptonite Team. Huff Puff 😅
Special offer: Act now and get 33% off our regular rate, plus receive 300 Cryptonite PRO (CPRO) coins and a ‘Cryptonite Original’ NFT badge.💎
Strong case for the DeAI thesis, especially the Bittensor and Render examples showing how compute marketplaces can actually scale. The analogy to hobbits defeating Sauron is kinda perfect when you consider how centralized AI giants are burning billions while decentralied networks like io.net let users monetize idle GPUs at a fraction of the cost. What's underappreciated is how blockchain verification solves the trust problem in distributed training that's plagued peer-to-peer compute for decades.
Strong case for the DeAI thesis, especially the Bittensor and Render examples showing how compute marketplaces can actually scale. The analogy to hobbits defeating Sauron is kinda perfect when you consider how centralized AI giants are burning billions while decentralied networks like io.net let users monetize idle GPUs at a fraction of the cost. What's underappreciated is how blockchain verification solves the trust problem in distributed training that's plagued peer-to-peer compute for decades.
Exactly