a16z: 3 Ways Cryptocurrency Technology Will Surpass Encryption Itself by 2026

Author: a16z crypto

Translation: Felix, PANews

1. Larger market size, broader coverage, and higher intelligence

— Andy Hall, a16z Cryptocurrency Research Advisor, Professor of Political Economy at Stanford University

Prediction markets have become mainstream. By 2026, as they integrate with cryptocurrencies and AI, their scale, coverage, and intelligence will only continue to grow, bringing new and significant challenges for builders.

First, more contracts will be listed this year. This means access not only to real-time odds for major elections or geopolitical events but also to detailed results and real-time odds for complex intertwined events. As these new contracts disclose more information and incorporate news (which is already happening), they will raise important social issues, such as how to balance the value of this information and how to design them better to be more transparent and auditable—and cryptocurrencies can help achieve this.

To handle the vast number of contracts, new consensus methods are needed to resolve issues within contracts. Centralized platforms addressing whether an event truly occurred (how to verify) are important, but controversial cases like Zelensky’s “suit incident” and Venezuela’s election markets highlight their limitations. To address these extreme cases and help prediction markets expand into more practical applications, new decentralized governance and LLM-based oracle systems can assist in determining the truth of disputed outcomes.

AI opens up more possibilities for oracles beyond LLMs. For example, AI agents trading on these platforms can search global signals to gain short-term trading advantages, revealing new worldviews and ways to predict future events. Besides serving as complex political analysts that can provide insights, these agents can also uncover new information about the fundamental predictors of complex social events when researching emerging strategies.

Will prediction markets replace polls? No; they will improve polls (and poll data can feed into prediction markets). As a political scientist, I am most excited about how prediction markets can work in tandem with rich and vibrant polling systems—but this also relies on new technologies like AI, which can improve survey experiences; and cryptography, which can provide new ways to verify that poll respondents are real people and not bots.

2. This year, cryptographic technology will provide a new foundational tool for industries beyond blockchain

— Justin Thaler, a16z Crypto Research Team Member, Associate Professor of Computer Science at Georgetown University

SNARKs (cryptographic proofs that allow verification of computations without re-executing them) have primarily been used in blockchain for years. Their overhead is enormous: verifying a single computation can cost up to 1 million times more work than running it directly. This might be worthwhile when thousands of verifiers share the cost, but in other cases, it’s impractical.

However, this is about to change. This year, the overhead of zkVM provers will drop to about 10,000 times, with memory usage only a few hundred megabytes—fast enough to run on a phone, and cheap enough to run anywhere.

The 10,000x figure is perhaps magical because high-end GPUs have about 10,000 times the parallel throughput of laptop CPUs. By the end of 2026, a single GPU will be able to generate proofs of CPU execution in real time.

This could realize a long-held vision from early research papers: verifiable cloud computing. If you run CPU workloads in the cloud—because your computational needs are too small for GPU, or you lack expertise, or for historical reasons—you will be able to obtain cryptographic proofs of correctness at a reasonable cost. The provers are optimized for GPUs; your code doesn’t need to be optimized.

3. Witnessing the rise of “Staked Media”

— Robert Hackett, a16z Cryptocurrency Editorial Team

Traditional media models (and their so-called objectivity) have long shown cracks. The internet has empowered everyone to speak out, and more operators, practitioners, and builders are directly engaging with the public. Their viewpoints reflect their interests in the real world, and surprisingly, audiences often do not dismiss them because of conflicts of interest, but rather respect them because of these relationships.

The new change is not just the rise of social media, but the emergence of cryptographic tools that allow people to make publicly verifiable commitments. With AI making the generation of infinite content cheap and easy (regardless of whether the viewpoints or identities are real or fictional, anyone can claim anything), relying solely on public (or bot) statements is no longer sufficient. Tokenized assets, programmable escrow, prediction markets, and on-chain history provide a more solid foundation for trust: commentators can express opinions and prove their consistency. Podcast hosts can lock tokens to demonstrate they are not engaging in speculative hype or “pump and dump.” Analysts can link predictions to publicly settled markets, establishing auditable performance records.

This is the embryonic form of what I call “Staked Media”: a media that not only aligns with vested interests but also provides proof of such alignment. In this model, credibility is neither derived from “word of mouth” nor unfounded assertions; instead, it comes from staking that makes transparent and verifiable commitments. “Staked media” will not replace other media forms but will complement existing ones. It offers a new signal: not just “trust me, I am neutral,” but “this is the risk I am willing to bear, and you can verify whether what I say is true.”

Related reading: a16z’s 2026 Crypto Industry 8 Major Trends Forecast: Rise of Privacy Chains, Platform Transformation, and more