Applied AI technologies like ChatGPT, MidJourney, or Jasper represent cutting-edge innovations that have the potential to revolutionize various industries. These services are spreading faster than Covid did in 2020, leading many crypto enthusiasts to believe that the fusion of AI and blockchain could improve the cryptocurrency market significantly, bringing about mass adoption, while AI platforms themselves could benefit from advanced, tokenized business models and decentralization.
Some of the blockchain-AI directions that are already being explored or researched for their potential include:
- Data Management: Neural networks require data for training and can themselves serve as the foundation for systems for automatic data administration and indexing. Blockchain enables the construction of such systems in a trustless manner, preserving the original data with its owners or rewarding them for providing information to AI.
- Financial AI: Automated investing, risk management, low-slippage swaps, and trading automation are just some of the benefits that AI can offer to DeFi and CeFi platforms. While many services already have these functions, neural networks can enhance their efficiency.
- Metaverses: AI can create visual and audio content and even write scripts for gaming scenarios. They can also manage non-playable characters, the environment, and various other elements of the metaverse, providing a unique and personalized user experience. Neural networks can significantly accelerate content creation for metaverses and reduce the cost of developing gaming projects.
These are just some obvious use cases. In addition to them, technically complex projects are being realized, such as AI infrastructure on the blockchain, decentralized neural network markets, or automated on-chain analytics. We’ll discuss specific examples a bit later.
However, not everyone in the crypto space is optimistic about AI. For instance, Andre Cronje recently stated that AI and blockchain are currently incompatible because AI requires high bandwidth, is opaque, and largely unexplored.
According to Cronje, even if these technologies were successfully combined, blockchain has nothing to offer neural networks, and neural networks cannot improve blockchain. All projects that use the AI prefix are simply dead and rely on hype to return to the market.
By the way, his statement coincided with a local decline in major AI tokens. This serves as a vivid demonstration of the influence of influencers and the cryptocurrency market’s sensitivity to the media landscape.
Time will tell whether AI turns out to be a short-term trend like M2E or gains widespread acceptance and integration with developed DeFi/NFT infrastructure and other market sectors. For now, AI tokens demonstrate sustainable growth, outperforming both Bitcoin and most altcoins in terms of performance.
According to zycrypto, the market capitalization of this sector grew to $5.1 billion just in the last week. Although the peak of productivity occurred in January-early February, which generally corresponds to the latest mini-bull run.
The increase in market capitalization is also related to the emergence of new projects amid the hype. Most of them will likely die out with the trend, but when has that stopped crypto enthusiasts from earning? Below, we’ll discuss how to get your lifeline in AI.
ChatGPT and Dalle-2 Triggered an AI Chain Reaction, Unveiling a New Trend for Both Traditional and Cryptocurrency Markets. While Microsoft Pours Billions into OpenAI and Google Tests Bard, Crypto Projects Ride the AI Hype Wave, Bringing Artificial Intelligence to the Blockchain. Today, We’ll Explore What Came Out of This and How to Profit from the New Trend
Cryptocurrency Projects Utilizing AI
Some blockchain startups are just now exploring the possibilities of AI, while others have been working with this technology for several years, already having ready-made products and native tokens.
Fetch.ai
Fetch.ai is a platform that provides AI infrastructure in an accessible form for integration into various solutions. It is essentially a decentralized network of autonomous AI agents operating on the blockchain, capable of automating various processes from smart home management to building logistics chains.
Fetch.ai offers several AI solutions, along with its native token $FET, which is used for staking and payment for services.
SingularityNET
This project also aims to connect AI solution developers with companies interested in integrating them but operates differently from Fetch.
SingularityNET is a marketplace where AI developers can publish their algorithms, and users can test and purchase them for use in their projects/purposes.
In addition to the marketplace, Singularity offers tools and monetization options for developers, as well as data protection solutions. The project’s native token $AGIX is used to purchase AI algorithms on the marketplace, for staking, and reward programs.
Ocean Protocol
Neural networks wouldn’t be able to function without data, and obtaining it in a convenient format, especially on the blockchain, is not always possible. Ocean Protocol solves this problem by allowing the tokenization and exchange of information while keeping control on the data provider’s side. For example, on the Ocean marketplace, you can purchase a token with information about cryptocurrency fundraisers since 2014.
Essentially, Ocean Protocol makes databases necessary for blockchain-AI training or operation accessible. The native token $OCEAN is used for buying and selling data.
The Graph
Similar to Ocean Protocol, The Graph provides developers with data to create products. However, The Graph allows for aggregating and packaging information only on the Ethereum network and only deals with on-chain data. While the service itself is not directly related to AI, it provides databases from the largest blockchain market, based on which AI systems are built and trained.
The native token $GRT, used for buying and selling data, has become one of the most productive in its sector.
Cortex
Cortex is a blockchain specifically created for deploying AI and building decentralized applications based on AI algorithms. Recently, it deployed L2 solutions based on ZkMatrix rollups to increase throughput. The network’s native token $CTXC gained hype in the AI wave.
DeepBrain Chain
DeepBrain Chain is a decentralized computing platform for AI based on blockchain technology. The project entered the crypto market through an ICO in 2017 but gained renewed attention during the AI hype wave. DeepBrain Chain allows developers to purchase computing power for deploying and training their cloud AI services. The native token used for service payments is $DBC.
These projects are direct evidence that AI on the blockchain is real, it works, and can provide useful use cases for cryptocurrency. There are not enough ready-made products yet to speak of a full-fledged market segment, but we are at the very beginning, which means pioneers who can reap all the benefits of being early adopters in their niches.
How to Profit from AI in Crypto
Alright, in essence, AI projects currently provide only a foundation rather than a ready-to-monetize product and require launching a full-fledged startup with their integration, which can be challenging for most crypto enthusiasts. However, the crypto market wouldn’t be the crypto market if it didn’t offer opportunities for users with varying levels of education, experience, and financial capabilities to earn money. Let’s look at a few of the most accessible options:
Trading and Investments:
As mentioned earlier, we’ve described projects that have launched native tokens. Some of these tokens have shown significant results, creating opportunities for speculation and narrative trading.
If you feel like you’ve missed the boat on already launched projects, look for AI startups that are still in the early stages of development and haven’t yet released native tokens/products. Here are a few examples:
- CryptoGPT: The latest hype in AI startups. Positioned as an L2 solution for integrating AI into decentralized applications, it has nothing to do with ChatGPT. The blockchain should provide dApp developers with a convenient set of tools + AI-based data for developing new applications based on CryptoGPT. The platform aims to become a convenient ecosystem for gaming and other blockchain applications through neural network integration. The hype is fueled by the fact that the IDO will be conducted on DAOmaker.
- Plai Labs: Plans to use artificial intelligence to build next-generation social platforms that enable communication, entertainment, and gaming. They raised $32 million from a16z. The only product so far is the gaming blockchain project Champions Ascension.
- Kosen Labs: Another developer planning to integrate AI to create blockchain products. There are no details yet, but the team seems to be forming, having already raised $5 million from a16z and other investors.
- bitsCrunch: An AI-based NFT analysis service. The tool allows identifying wash trading, scam collections, or NFTs, as well as analyzing token prices. They raised $3.6 million from Animoca Brands, Coinbase Ventures, and several other investors. The useful product already exists, and the launch of a native token is planned for the future.
Experienced crypto enthusiasts know how to provide value to early projects, but let’s highlight CryptoGPT once again. In fact, it’s currently the only project with a rewards program and high chances of a drop, so starting your journey in AI with it might be a good idea.
Using Financial AI
Financial AI allows for increased efficiency in investment, risk management, and other aspects of capital management in the crypto market. While there are still relatively few of them, you can already pay attention to:
- HeraFinance: A DeFi platform and liquidity aggregator that utilizes AI algorithms to execute swaps with minimal slippage and conduct cross-chain exchanges. It’s very similar to 1Inch but with AI. The project also has a native token, $HERA.
- Numer.ai: It’s somewhat like an automated hedge fund that uses neural networks to analyze market data and provide forecasts and signals for 5000 global stock market stocks. The platform has a token, $NMR, which also caught the AI trend wave.
It is expected that in the near future, more neural networks oriented towards DeFi will appear, helping to solve problems with liquidity, fake tokens, rug pulls, MEV attacks, and eliminate other risks in decentralized finance. This segment is currently very dynamic, so we recommend periodically tracking the emergence of new solutions.
Near-Crypto AI
And the simplest way to earn in crypto with AI is to integrate already available neural networks into your everyday activities to increase efficiency and speed. Here are a few examples of how to do it:
- ChatGPT for Ambassador Programs: The main tasks of any ambassador are to popularize the brand through social networks. This means writing articles and reviews, creating infographics, tweeting, filming videos, and other content. Adding a multiplier in the form of several accounts, an ambassador on 10+ accounts can take several hours a day. ChatGPT will reduce the time to generate primary content to just a few minutes. This AI can write a post, a brief review, a script for a video, and also expand, make unique, and refine existing text.
- Dalle|Midjorney for NFT Collections: PFP remains the dominant category of NFT in the market, practically without carrying any value other than aesthetic. If you’ve long wanted to launch your own PFP collection but don’t know how to draw, services like Dalle or Midjorney can eliminate this barrier. They can generate references/concepts for designers or JPEGs that can be sold as digital art. Additionally, they will help create visual content for ambassadors/art contests.
- Tools for Research and Learning: It’s difficult for newcomers to the market to search for information or systematically digest it. You can buy courses to gain these skills or use auxiliary AI services. For example, the Andi search engine based on AI helps quickly find the necessary information, displays it in a convenient format, and even summarizes data from the website into a short description. Tutor.ai can create a course for studying a specific topic based on open data on the internet. Moreover, information is presented in a structured way, and for knowledge control, AI even generates quizzes. You can create more helper neural networks tailored to your activities and work to save time and increase productivity. You can find useful AI services of various types, as well as AI startups (non-crypto), here.
Top 15 cryptocurrencies with artificial intelligence to watch in 2024
Using artificial intelligence in cryptocurrencies enhances their security, scalability, usability, and efficiency.
Such tokens allow the application of AI technologies and services in various cryptocurrency ecosystems.
The use of AI has become extremely important in the cryptocurrency space as it has helped improve and enhance various aspects of blockchain technology.
Future developments are expected to further the partnership between AI and blockchain, leading to the increased popularity of AI-based cryptocurrency tokens.
When trading AI-based tokens, caution is required due to the risks inherent in the cryptocurrency market as a whole.
- Fetch.ai (FET)
Market capitalization (February 2024): $917 million
- Ocean Protocol (OCEAN)
Market capitalization (February 2024): $416 million
- Render Token (RNDR)
Market capitalization (February 2024): $2.7 billion
- SingularityNET (AGIX)
Market capitalization (February 2024): $915 million
- The Graph (GRT)
Market capitalization (February 2024): $2.6 billion
- Oasis Network (ROSE)
Market capitalization (February 2024): $950 million
- iExec RLC (RLC)
Market capitalization (February 2024): $286 million
- Artificial Liquid Intelligence (ALI)
Market capitalization (February 2024): $146 million
- Hera Finance (HERA)
Market Capitalization (February 2024): $19 million
Ranked ninth is Hera Finance, or simply Hera. It is a project associated with the Pathfinder algorithm, which assists users in the DeFi space. It allows users to select the most profitable and efficient trading routes on decentralized exchanges. The project uses machine learning to analyze prices, volumes, liquidity, and other cryptocurrency-related data. Additionally, the native cryptocurrency token HERA enables participation in project governance. The token is also used to distribute protocol revenue among HERA holders.
- Cortex (CTXC)
Market Capitalization (February 2024): $134 million
Cortex is the smallest project in terms of market capitalization on the list. It is a blockchain platform that enables the upload and execution of AI models. It was developed to integrate artificial intelligence into DApps and smart contracts. The project is a peer-to-peer decentralized platform with open-source code that democratizes AI. Its participants can create AI-supported applications using blockchain technology. The project team claims that before its launch, there was no way to run machine learning models on-chain. DApps with machine learning models had to rely on off-chain data, which overall defeats the purpose of smart contracts.
- dKargo (DKA)
Market Capitalization (February 2024): $127 million
Next is dKargo, a project utilizing blockchain technology to address trust issues among participants in the logistics industry. It helps organizations scattered across the logistics sector create an efficient collaborative logistics network. dKargo enables the acquisition of reliable information, resolution of trust issues, and strengthening of ties among participants. Additionally, the project establishes a logistics network in collaboration with Web3 services. While dKargo is a relatively small project, it has the potential to revolutionize the logistics sector.
- Phala Network (PHA)
Market Capitalization (February 2024): $98 million
Closing the list is Phala Network, a blockchain-based platform augmented with artificial intelligence aimed at improving cloud computing with a focus on privacy. It is positioned as a decentralized alternative to modern centralized cloud computing services such as Google Cloud or Amazon AWS. Phala Network enables true privacy and maintains ownership rights over user data. Users can even deploy confidential smart contracts within TEE enclave processors.
- Covalent (CQT)
Market Capitalization (February 2024): $208 million
Next is the data aggregator Covalent. Covalent retrieves data from multiple blockchains, including Avalanche, Ethereum, and Polygon. Developers can use this information to create DApps that address existing issues in various industries. However, the project’s main goal is to solve problems in the retail and finance sectors.
- Injective (INJ)
Market Capitalization (February 2024): $3.59 billion
The Injective project team refers to it as a blockchain created for finance. It enables the development of finance-focused DApps in the Web3 sphere on an open and interoperable Layer 1 blockchain. A distinguishing feature of the Injective protocol is the use of plug-in modules, which give developers unprecedented flexibility in choosing functional capabilities. This capability significantly accelerates the assembly process, making Injective a preferred base for building innovative decentralized exchanges. INJ is the native token of Injective, used for community governance and transaction confirmation through staking. Additionally, developers creating DApps on Injective receive rewards in the form of INJ tokens.
- Numeraire (NMR)
Market Capitalization (February 2024): $197 million
Introduced in October 2015, the Numerai project became the first hedge fund based on artificial intelligence. This Ethereum-based platform utilizes predictions from developers and data analysis specialists based on artificial intelligence to create trading models. Thousands of individual models are combined into a meta-model, which helps predict stock market movements. This includes data obtained from Numerai Signals, a tournament for data analysis specialists who gather their own information. The native token of the Numerai project (NMR) was introduced in 2017 and serves as the staking currency in the ecosystem. Users stake NMR for accurate predictions and receive tokens as rewards.
These projects utilize artificial intelligence for various purposes such as autonomous machine-to-machine interaction, data exchange and monetization, creation of decentralized applications, blockchain scalability, and more. They offer different innovative approaches to using AI in cryptocurrency ecosystems and are worth closely monitoring.
Are AI-based cryptocurrencies the future?
Artificial intelligence has found broad application in all industries, including the cryptocurrency market. Digital currencies seamlessly combine blockchain technology with other emerging technologies. With AI, many functions of cryptocurrencies and blockchain can be enhanced, further expanding their utility. Therefore, there is no reason to believe that AI and blockchain will ever diverge. Instead, they are likely to become even closer over time.
This could mean that cryptocurrencies with AI integration will be the next breakthrough. However, if you intend to trade them, it is essential to study them carefully first. In the case of cryptocurrencies, there is always risk, regardless of their use cases and technologies. Remember this and always exercise caution before investing money.
Conclusion:
The growing interest in artificial intelligence has influenced cryptocurrencies significantly: projects based on AI demonstrate significant growth. AI tokens help enhance security, scalability, and usability in the cryptocurrency market, while also providing access to AI technologies and services across various ecosystems.
Many industry observers anticipate even deeper integration of AI and blockchain, which could increase demand for AI-based cryptocurrency tokens. It is essential to exercise caution when trading these tokens, as the cryptocurrency market is associated with inevitable risks.
FAQs (Frequently Asked Questions)
What is the significance of AI in the cryptocurrency market?
- AI technologies enhance security, scalability, and usability in the cryptocurrency market. They also provide access to advanced AI technologies and services across various cryptocurrency ecosystems, leading to significant growth in AI-based cryptocurrency projects.
What are some blockchain-AI directions currently explored in the cryptocurrency market?
- Some blockchain-AI directions include data management, financial AI for automated investing and trading, and the integration of AI in metaverses for personalized user experiences. These directions leverage the strengths of both AI and blockchain technologies.
Are AI and blockchain compatible technologies?
- While some experts believe in the compatibility and potential synergy between AI and blockchain, others like Andre Cronje express skepticism, citing challenges such as high bandwidth requirements for AI and the opacity of AI systems. However, ongoing research and development aim to address these challenges and explore the integration of AI and blockchain further.
How can investors profit from AI in the cryptocurrency market?
- Investors can profit from AI in the cryptocurrency market through trading and investments in AI-based cryptocurrency tokens. Additionally, they can explore financial AI platforms for improved efficiency in investment and risk management. Integrating available AI tools into everyday activities can also enhance productivity and efficiency.
What are some notable AI-based cryptocurrency projects?
- Some notable AI-based cryptocurrency projects include Fetch.ai, SingularityNET, Ocean Protocol, The Graph, Cortex, and DeepBrain Chain. These projects utilize AI technologies for various purposes such as decentralized AI infrastructure, AI marketplace, data exchange, and creation of AI-powered decentralized applications.
Are AI-based cryptocurrencies the future?
- AI has found broad application in various industries, including the cryptocurrency market. The integration of AI and blockchain technologies is expected to deepen over time, leading to increased demand for AI-based cryptocurrency tokens. However, investors should exercise caution and conduct thorough research before trading AI-based cryptocurrencies due to the inherent risks associated with the cryptocurrency market.
