Artificial intelligence (AI) known for its huge growth in recent years and entering mainstream use this year has also found its place in the blockchain realm. With many various use cases that we are discussing in detail below, AI and blockchain merge together perfectly.
There are many uses for AI together with crypto. Starting from AI agents that could help in creating, auditing, and analyzing as well as AI that could be built with blockchain principles and in a decentralized, permissionless manner. Let’s take a look at how AI intersects with crypto.
Table of Contents
What Are AI Agents?
AI agents are advanced software programs designed to efficiently perform specific tasks by analyzing real-time data. These agents are more than simple tools as they actively engage in decision-making processes by planning and executing tasks based on the data they were given or extracted.
AI agents have various applications and have their roles in the Web3 ecosystem:
Artificial Intelligence and Securing Smart Contracts
The first role of artificial intelligence could be in having the ability to generate code and even write smart contracts. In this day and age, more people have access to private coding tools, making writing code easier than before.
By integrating AI, even smart contracts can become “intelligent,” meaning they can adapt to complex contract terms and conditions that reflect real-world nuances, making them more effective and reliable.
Although there is more than meets the eye, because when a chatbot or AI program generates a completely new code for smart contracts, we see that the code produced by AI often contains vulnerabilities that should not be used in a copy-paste manner, definitely not without extensive checking by experts.
AI-Generated Art
As most of the general population already knows and perhaps even has used, there are the chatbots or image generators. It is just plain and simple to use AI for content creation or helping generate what you had in mind. Whether this is of high quality depends on the one using it, but with the rapid advancement of AI, online content may need more than just one community note or disclaimer to establish trust and authenticity.
Much like how online communications moved from insecure HTTP to encrypted HTTPS for trust, the content we consume online, be it a blog post, article, or video, needs a way to be validated for quality. This is where blockchain’s cryptographic primitives can help by validating the originality and reputation of content (creators) across the internet.
AI models can generate content in the blink of an eye, but could also verify the authenticity and association of reputable sources.
AI-Managed Capital
AI can manage capital with higher efficiency and more alignment of the user’s financial goals than the emotional user himself. It can execute transactions across different domains swiftly.
AI agents can predict market fluctuations and suggest timely adjustments to a user’s investment portfolio. They could play a significant role in prediction markets by providing forecasts and analyses.
The crypto world is notorious for its many events, talks, and side-shows that could lead to an overwhelming fragmentation, only manageable by extreme degens or AI.
Proof of Humanity
It sounds contradictory, but artificial intelligence could help us combat fake news and fake identities. We need a way to verify that someone interacting online is in fact a ‘unique’ human being, which gave rise to the concept of “proof of humanity” or “proof of personhood”.
A value proposition that is interesting, where digital identity technologies and some cryptographically consensus indicate a person is human. Some of the big AI-centered cryptocurrency projects and startups, such as WorldCoin, are pioneers of this sub-niche, and there will definitely be more soon.
Artificial DAOs and AI Governance
Finally, as we enter an era of increasingly powerful AI systems, key questions arise around ownership, control, and governance of these systems at a collective level (we get to this later on). On the flip side, the integration of AI into Decentralized Autonomous Organizations (DAOs) also could potentially help address some of these challenges, where even web3 companies had their struggles.
Blockchains and DAOs have been a grand experiment, as has decentralized governance. And while the underlying principles are sound, DAOs have struggled with effective human coordination and execution. Could AI improve this?
What Is Permissionless & Decentralized AI?
You may also have heard of decentralized and permissionless AI, which refers to the development and use of AI systems that do not require authorization from a central authority, similar to the crypto “cutting out the middleman” ethos.
And the fact that centralized entities can unilaterally make changes to pricing, content guidelines, and decide what gets prioritized and what is not. It gives them the power to control narratives in an unprecedented way. Decentralized storage can act as a counterbalance and safety valve to these risks.
A model that supports open innovation and allows developers to create and even modify AI without restrictions. The primary advantage of this approach is the democratization of AI and the promotion of open-source software, where developers can access and modify code.
Historically, open infrastructure like Linux and MySQL has proven resilient because it undergoes extensive peer review and continuous improvement by a global community.
Although many AI researchers express their reservations about deploying AI systems in a permissionless manner due to the unpredictable nature of their probabilistic approach that could lead to unexpected errors, particularly when encountering unfamiliar data or scenarios.
Decentralized Storage for AI Data & GPUs
So now we know that AI can help us, maybe we can help it as well. The need for decentralized storage is another good argument in its own accord, and knowing that centralized storage companies may not be the most secure, as we’ve seen with data breaches and collection scandals in the Web 2.0 era.
This means some projects focus on offering decentralized computing power or offer GPUs, as they are the backbone of AI, particularly for training machine learning models. These projects also fall under the category of DePin, as it is necessary for these AI models to require vast datasets and computational power to learn and process tens of thousands of data points like images.
That being said, the promise of user privacy and decentralization is appealing, but the actual user preference often leans toward more cost-effective and efficient solutions, regardless of the underlying technology. But still…
Read Our Detailed Reports on AI Crypto Projects
What Are the Investment Opportunities in AI Through Crypto?
Currently, the options for investing directly into AI through crypto are limited. Most investors looking to engage with AI technologies must either directly fund early-stage AI projects or invest in stocks related to AI. However, there is potential for a new paradigm where AI assets, such as datasets and models, are tokenized.
What Does Tokenization of AI Assets Involve?
Tokenizing AI assets involves creating digital tokens that represent ownership or stakes in AI-related resources. It is a way that leads to an initial offering of these assets and allows investors to buy into the value of AI datasets and models early on.
But determining the value of AI assets is complex, especially since many powerful AI models, like those used in stable diffusion techniques, are open-source and lack direct monetization paths.
Therefore, we must establish a valuation framework that requires setting benchmarks for AI performance that is recognized by the community and involves assessing the business utility, potential revenue generation, and overall impact of the AI blockchain models.
Why Could AI Centered Crypto Projects Boom?
Though we can say with confidence that the AI industry is experiencing more than significant growth, as evidenced by the rapid user adoption of platforms like ChatGPT, Google Bard, Grok, and all integrations of AI into products millions of people use daily.
The global AI market saw significant funding in 2023, and according to PitchBook, the total funding for AI-related startups surpassed $68.7 billion for the year.
The total market value of all crypto projects focused on AI sits at just $8.5 billion. That’s less than some market caps of ‘mid’ coins. Considering how central AI has become to technology roadmaps of even the largest companies, crypto’s collective investment in AI is small.
Meanwhile, companies like Meta are reorienting their entire business models and tech strategies around AI. They’re investing tens of billions annually and aim to have hundreds of thousands of cutting-edge AI processors within two years.
Compared to mainstream tech giants, the crypto industry is barely testing the potential of AI. But early projects prove it could be hugely impactful—let’s see how it goes…
Discover Our Latest AI Research
🎁 Festive Offer: Crypto Narrative Bundle – Unwrap Top Market Picks! 🎁
Holiday Exclusive for Crypto Claus Enthusiasts! 🎅 Unlock our ultimate bundle: all three comprehensive guides for just €99.99—saving you €30.
An expertly curated package that is ideal for anyone seeking to sleigh the crypto markets.🌟🎄
