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Lawsuits recently filed by the US Securities and Exchange Commission against Coinbase Global Inc. and Binance Holdings Ltd. have ignited concerns about the future of cryptocurrencies.
Crypto and AI: Exploring the Synergy Between Two Disruptive Technologies
Amidst the challenges posed by regulatory scrutiny and market dynamics, the world of digital assets has unintentionally paved the way for the emergence of a technological innovation: artificial intelligence (AI).
The emergence of OpenAI’s ChatGPT bot last November has captivated the attention of founders and investors, who were previously immersed in the crypto frenzy.
While AI has stolen the limelight, some crypto enthusiasts are optimistic that it can bring new opportunities to the blockchain industry. Adam Struck, the founder of investment fund Struck Crypto, suggests that AI could act as a catalyst, reigniting interest in blockchain technology.
Struck Crypto has been delving deeper into AI since the release of the ChatGPT bot, recognizing the potential for blockchain to introduce transparency and decentralization to AI.
Alex Felix, the managing partner at CoinFund, a crypto venture capital firm, supports this notion, stating that blockchain can address the opacity surrounding data used to train AI models.
CoinFund recently backed a crypto startup called Tools for Humanity, co-founded by Sam Altman of OpenAI, which secured an impressive $115 million in funding. The startup’s Worldcoin project revolves around a digital currency that generates a unique ID for individuals based on blockchain technology.
This “proof of personhood” is combined with Worldcoin to facilitate secure payments. Tiago Sada, Head of Product at Tools for Humanity, highlights the synergy between AI and crypto, emphasizing that their venture emerged from contemplating the future of AI and ultimately realizing that crypto was the solution.
Felix draws parallels between the current AI craze and the initial coin offering (ICO) boom in 2017, where investors rushed to invest in various crypto tokens, some of which turned out to be scams.
However, he suggests that this time around, vetting new AI projects is easier, given the smaller circles and the ability to assess expertise in AI more effectively.
In addition to the benefits of AI, blockchain technology can bolster the crypto industry by enhancing data sorting, information security, and user interaction. Decentralized finance has been plagued by cyberattacks, leading Struck to suggest that AI bots could play a pivotal role in curbing these threats.
By simulating attacks, AI bots can expose vulnerabilities in smart contract code that hackers exploit to siphon funds. Bots can also be employed to moderate content, filtering out spam and scams on popular messaging platforms.
This is particularly crucial in the crypto industry, where many scams originate from social media channels.
Moreover, AI has the potential to enhance the user experience and make crypto more accessible to the general public. Solana Labs, the creators of the Solana blockchain, introduced a ChatGPT plugin to guide users through blockchain transactions in a conversational manner.
By connecting their crypto wallet and engaging with the bot, customers can effortlessly browse and purchase nonfungible tokens (NFTs), simplifying an otherwise complex process.
Tal Tchwella, Head of Product at Solana Labs, expresses the belief that AI will revolutionize every sector and industry, and they are eager to embrace it.
Companies Address Potential Risks in Integration of AI with Crypto
Despite the excitement surrounding AI’s integration with crypto, some companies remain cautious, citing potential dangers. Bitget, a derivatives exchange, opted against integrating ChatGPT due to concerns about users receiving misleading information.
Tools for Humanity has faced criticism regarding the protection of sensitive biometric data collected through their eye-scanning tech.
The Graph, an indexing protocol leveraging AI for improved blockchain data searchability, has intentionally avoided labelling its GRT currency as an AI token, emphasizing its commitment to being recognized as a blockchain startup first and foremost.
Tegan Kline, CEO of Edge & Node, the startup behind The Graph, acknowledges the challenges associated with AI, including the proliferation of misinformation.
While AI and crypto forge a unique alliance, some cautionary notes are essential. As these disruptive technologies continue to evolve, it becomes imperative to navigate potential pitfalls and ensure responsible and ethical implementation.
As the crypto industry adapts to a changing landscape, the fusion of AI and blockchain could offer innovative solutions, transforming the way we interact with digital assets and paving the way for a future where both technologies thrive.
Meanwhile, here are three AI crypto projects that James Crypto Bury has covered recently. According to him, and other experts, these assets hold 10x potential.
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