The terrain of the world of technology is constantly shifting, with one trend fading away as another surge forward. As artificial intelligence (AI) assumes center stage and captivates entrepreneurs and investors, the crypto industry has recently found itself in a peculiar position. Despite the shift in emphasis, some proponents of cryptocurrencies argue that the recent surge in interest in artificial intelligence could provide new opportunities for the development of blockchain technology.
The US Securities and Exchange Commission’s legal actions against significant players such as Coinbase Global Inc. and Binance Holdings Ltd. have generated uncertainty regarding the future of cryptocurrencies. Nonetheless, as regulatory pressures and other market factors have eroded interest in digital assets, the spotlight has shifted to AI, thanks partly to the introduction of OpenAI’s ChatGPT bot. This has marked the beginning of practical AI applications, attracting the same audience that fueled the cryptocurrency boom.
Adam Struck, founder and managing partner of investment firm Struck Crypto, posits that artificial intelligence could serve as a catalyst to revive interest in blockchain. The inherent transparency and decentralization of blockchain technology can bring clarity to the often opaque world of artificial intelligence, particularly regarding the data utilized for training models. Alex Felix, managing partner and chief investment officer at crypto VC firm CoinFund, shares this viewpoint.
Sam Altman of OpenAI founded Tools for Humanity, a cryptocurrency startup recently backed by CoinFund. The startup, which created the digital currency Worldcoin, offers a novel application for cryptocurrency in artificial intelligence. It has developed an orb that analyzes people’s irises to generate a unique blockchain-based ID for each individual, thereby providing digital evidence of personhood. Combined with Worldcoin, this technology enables secure payments, demonstrating the convergence of artificial intelligence and cryptocurrency.
Nonetheless, the current AI craze recalls the 2017 initial coin offering (ICO) boom, when investors rushed to purchase various fraudulent crypto tokens. Felix observes that the capacity to evaluate new projects and determine an individual’s AI proficiency has improved.
Similar to Blockchain’s potential to increase AI’s transparency, AI can improve crypto. AI programs can reduce the risk of cyberattacks on decentralized finance and enhance how digital-asset platforms manage data, secure information, and interact with users. For instance, these algorithms could simulate attacks to identify flaws in smart contract codes that hackers could exploit to siphon off funds.
AI may also moderate content and filter out spam and hoaxes on popular messaging platforms frequently used to facilitate crypto scams. This is a significant benefit for an industry where social media fraud is prevalent.
AI is not only capable of enhancing security; it also has the potential to enhance user interaction with crypto. The developer of the Solana blockchain, Solana Labs, has launched a ChatGPT extension to improve the user experience. The plugin simplifies the often convoluted process of dealing with crypto by guiding users through blockchain transactions in a conversational manner.
Despite the positive outlook, not all crypto companies are anxious to incorporate AI fully, citing potential risks. The derivatives exchange Bitget abandoned a ChatGPT integration out of concern for users receiving misleading or deceptive information. Concerns have been expressed regarding the security of the sensitive biometric information that Tools for Humanity collects using its iris-scanning technology.
Tegan Kline, the chief executive officer of Edge & Node, the company responsible for the indexing protocol The Graph, emphasizes the company’s principal identity as a blockchain startup. While they have been utilizing AI and machine learning for over two years to facilitate blockchain data access and utilization, they have avoided the hype of labeling their GRT token as an AI token, citing AI’s difficulties in discerning online truths as an example.
As AI continues to permeate various sectors and industries, a slew of crypto companies have quickly shifted their business models to capitalize on this trend. Others, such as Edge & Node, prefer to keep their original blockchain-centric identities due to ongoing AI-related concerns, such as its potential to obscure online truth lines.
Despite these reservations, the growing interest in artificial intelligence is undeniable, and many companies are incorporating AI into their investment proposals to attract venture capital funding. This development has the potential to rekindle interest in blockchain and foster further innovation in the cryptocurrency industry.
Thus, the intersection of AI and blockchain is a dynamic, evolving space with opportunities and challenges. The potential for innovative applications and solutions will continue to increase as these two technological domains converge and interact. It remains to be seen how these developments will shape the future tech landscape, but one thing is certain: the marriage of AI and blockchain is destined to have far-reaching effects across a variety of industries.