Artificial intelligence (AI) and blockchain technology are two of the most significant technological advancements of the modern era. AI has been revolutionising various industries, while blockchain technology has been shaking up the financial sector with the introduction of cryptocurrencies. Now, a new wave of innovation is taking shape, as the two technologies merge to form AI cryptos.
AI cryptos aim to blend the power of artificial intelligence with the transparency and security of blockchain technology. The combination of the two technologies opens up a world of new possibilities, from finance to gaming and everything in between. In this article, we will explore why AI cryptos are a promising investment opportunity and what you can expect from them in the future.
What are AI cryptos?
AI cryptos are a relatively new class of cryptocurrencies that are built on blockchain technology and integrate AI in some way. The extent to which each project relies on AI varies greatly, and the areas of application are diverse, ranging from finance to gaming.
How is AI improving cryptocurrencies?
AI has the power to make existing processes more efficient and accurate. Here are a few examples of how AI is improving cryptocurrencies:
Automation: AI can simplify and accelerate many large and small processes, from analysing investment opportunities to automatically compiling data.
Fraud detection: AI can recognise unusual patterns that can warn users of suspicious wallet addresses or a high likelihood of scams with certain crypto projects.
Autonomous processes: Smart contracts allow the execution of complex processes on blockchains. AI can take this to the next level by automatically adapting or creating new smart contracts based on specific criteria.
Improved user experience: AI can recognise user behaviour and usage patterns and offer or optimise certain functions and services based on that information. An example is the automatic filling of transaction forms.
The drawbacks of AI in crypto
While AI is powerful, it also comes with some downsides, including:
Data collection: AI relies on vast amounts of data. Users are required to provide sensitive personal and financial information to the algorithm, which can be used to their disadvantage.
Mistakes can happen: AI is based on programming, which can contain mistakes. Although AI technology has come a long way, it is not yet fully mature, leaving various risks when it is used.
Increased dependency: When you rely on an AI-powered automatic helper to execute certain processes, you become dependent on it.
The best AI crypto projects
Assessing crypto projects that use AI is challenging, but here are five of the most promising projects:
SingularityNET: This project allows developers to publish their services on a decentralised platform, earning the native AGIX token in return.
Fetch: Fetch is developing AI platforms and services to allow anyone to build and deploy AI services at scale.
Ocean Protocol: This project allows anyone to publish, discover and consume data in a decentralised manner.
iExec RLC: iExec RLC aims to create a decentralised marketplace for computing assets such as computing power, applications and datasets.
Numerai: Numerai is building a decentralised data science platform on Ethereum that allows developers to compete in creating effective machine learning prediction models.
How many AI crypto projects are there?
There are currently around 60 cryptocurrencies that use AI in some way. With the current popularity of AI, it is likely that many more crypto projects using AI are in active development.
AI crypto investment potential in the current crypto market
AI cryptos have been performing exceptionally well since the sudden explosion in popularity of ChatGPT in December last year. The largest AI cryptos by market capitalisation have outperformed Bitcoin in the last 30 days.