When AI converges with crypto

When AI and Crypto Collide: The Rise of AI Tokens in the Digital Economy

8 Aug 2023

The Rise of AI Tokens in the Digital Economy

In the digital age, few technologies have shaped our world as profoundly as Artificial Intelligence (AI) and cryptocurrency. Now, imagine these titans colliding. The result? AI tokens—pioneering a fresh era of innovation. Balancing excitement with a healthy dose of caution, this article offers a brisk overview of the melding of AI and crypto assets along with the formation of AI tokens. 

Understanding the Convergence of AI and Cryptocurrency

Historically, AI and cryptocurrency walked different evolutionary paths. AI's journey began with an aspiration to replicate human intelligence, while cryptocurrency aimed to revolutionize our financial systems. But destiny had other plans. These technologies, driven by the spirit of innovation, naturally converged, ushering in a new era of digital advancements.

Decentralized tech and AI

As one of the primary drivers behind cryptocurrency development and ethos is the idea of decentralization. Putting financial power into more hands while reducing the risk of centralized data stores has led to rampant development in the crypto space. 

As AI advances at breakneck speed, decentralized technologies are a natural match to help us avoid the possibility of AI ending up in the control of potentially malevolent centralized entities.  

“Imagine a world where AI is not controlled by just one central authority.” - Blockchain Council

AI and crypto markets rise together

Launched in late November of 2022, ChatGPT’s chatbot notched 100 million monthly active users in just two months, beating out TikTok as the fastest growing application. At its core, ChatGPT has proven itself to be the closest thing to a human’s ability to reason - a machine that learns and can code a website, write a white paper, and analyze large data sets in seconds. This has led to multiple areas where crypto and AI are converging:

  • Crypto markets have been abuzz since ChatGPT’s meteoric rise. In Q4 2022, when ChatGPT started gaining traction, we saw cryptocurrencies enjoy a boost in activity, interest, and market caps.
  • The acute crypto regulatory environment finally eased up slightly as policy makers and government officials turned to the potential dangers of AI. 
  • The introduction of AI-based tokens and applications took place during this era, carving a new notch in the history of cryptocurrencies.

a robot clicking on a large digital screen showing a blockchain network

What are AI tokens?

An AI token is a crypto asset that infuses some element of AI, providing access to AI through a digital token. This can mean many things; in fact, the potential for innovation is limitless. For instance:

  1. An AI token may use AI technologies to improve aspects of its coin, such as increasing the crypto’s security or enhancing user experience. 
  2. AI applications and projects can use a crypto AI token for growth and marketing, capitalizing on the existing infrastructure of decentralized exchanges and marketplaces.
  3. Artificial Intelligence projects can use a crypto token to help increase efficiencies, such as with automated smart contracts and Machine Learning based decision-making and predictive analysis.
  4. AI tokens enable crypto and AI investors a new way to access the growth potential of tech startups in both industries.
  5. Crypto companies can infuse AI to reduce overall costs and also piggyback on the massively expanding AI market.

Exploring projects using AI tokens

A peek into the dynamic world of AI and crypto reveals a wide array of innovations:

AI-Driven Trading Platforms - Think of trading on steroids. Here, AI sharpens prediction models and trading strategies to optimize gains.

Data Marketplaces - Where AI is the merchant, trading valuable data seamlessly with tokens. 

Decentralized AI Networks - Envision a world where AI models learn, grow, and get rewarded with tokens. Intriguing, right?

Token-based AI Services - In the future, we’ll likely see many AI services that you can access only through an AI token.

Examples of AI tokens

Let’s take a look at some of the top-performing AI crypto tokens to get an idea of the massive potential of these two industries colliding.

A chart showing the top performing AI tokens by market cap

Source: CoinGecko

Render (RNDR)

The Render project offers a P2P marketplace for computational power, enabling users to earn crypto tokens by offering their excess GPU power to 3D rendering projects for motion graphics and other visual effects. Render is often seen as the developmental pathway for Metaverse projects and services. The connection with AI comes into play when Render allows people to instantly render AI-generated images with a text prompt on the Render protocol. The Render token (RNDR) is a utility token used for paying out those earning on the platform.

SingularityNet (AGIX)

Singularity has a much more direct relationship to AI. The project is essentially a decentralized marketplace where users can monetize and promote AI services. AI developers are able to publish the AI tools they have built, sell them on the marketplace, and track sales and other market analytics. Singularity’s crypto AI token, AGIX, saw explosive growth following OpenAI’s launch of ChatGPT in November 2022, increasing over 600% in January 2023 alone.

The Graph (GRT)

The Graph project directly connects AI and crypto by allowing app builders to use its GraphQL AI query system to retrieve blockchain data. As a decentralized protocol, The Graph enables developers to efficiently create and use AI automations, such as for automated decision-making, and provides easy access to rich Web2 data indexing. Its native token GRT provides access to users who participate in the protocol and is the token they receive when earning on the platform.

Benefits of AI tokens

The marvels of AI tokens aren't just theoretical. They have the potential to bring vast efficiencies into any market they touch, including digital assets:

  • Boost Efficiency: AI can fast-track tasks in blockchain like a pro.
  • Bolster Security: Detecting crypto threats? Leave it to AI to analyze onchain data and smart contracts.
  • Promote Accessibility: AI tokens, due to their global, 24/7 nature, help democratize access to Artificial Intelligence products and services.
  • Fuel Financial Innovation: Crafting new-age financial tools and strategies is now a breeze, thanks to AI.

Risks and challenges

The fusion of AI and crypto isn’t without challenges, while poised at the cusp of a digital revolution, it's also crucial to understand the potential pitfalls of this AI and crypto convergence. 

  • Technical Hiccups: Marrying two advanced techs isn't child's play. Expect teething troubles.
  • Regulatory Hurdles: Governments are still sizing up this union, and their gaze isn’t always friendly.
  • Economic Ripples: Market dynamics may wobble. Watch out for manipulations!
  • Ethical Quandaries: Navigating the maze of privacy and transparency issues requires tact.

Future prospects for AI and crypto

Looking ahead, the bond between AI and cryptocurrency will only deepen. With boundless sectors to explore and innovations to spawn, the sky's the limit.

AI and crypto create ample opportunities for enhancing the security of your crypto assets. Download Gridlock Wallet today to experience cutting edge crypto technologies in the age of AI.

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Written by Mason Winsed

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Mason Winsed simplifies blockchain for the people. With a comp-sci background and a passion for crypto safety, he's your go-to for straight-forward crypto wisdom. In his off time, he's coding or gaming. Join Mason for a no-nonsense crypto talk.

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