Is Decentralized AI Crypto’s Next Big Trend?

Why AI Tokens Probably Don’t Have Anything to Do With ChatGPT

The current craze for AI is vaguely reminiscent of when blockchain and cryptocurrency first burst into the mainstream in 2017. This was a time when, for example, Long Island Iced Tea Corp. changed its name to Long Island Blockchain Corp., sending its stock price skyrocketing in the process. Of course, the company had very little to do with blockchain, with three of its executives ultimately being charged with insider trading related to the name change.

Fast forward to 2023, and the fervor for ChatGPT has helped create an environment where pretty much any cryptocurrency related to AI can hope to post above-average gains, at least some of the time.

Indeed, the “Artificial Intelligence (AI)” tokens category on CoinGecko has gone from not existing as recently as January of this year to being the 32nd-biggest category by market cap (out of 101). As of writing, it has also witnessed market-beating gains in the past few weeks, with certain coins in the category enjoying double-digit returns.

Here’s a rundown of some of the biggest winners:

• SingularityNET (AGIX): up by 28% in the past month and by 473% in the past year.

• Fetch.ai (FET): up by 327% since the start of 2023.

• Ocean Protocol (OCEAN): up by 125.4% since the start of 2023.

• Artificial Liquid Intelligence (ALI): up by 337% since the start of 2023.

• inSure DeFi (SURE): up by 39% in a week and by 63% since the start of 2023.

This is just the tip of a very big and still-growing iceberg. However, it needs to be said that very few of the cryptocurrencies and platforms listed under CoinGecko’s artificial intelligence category have much in common with ChatGPT or any LLM-based AI. Instead, many make almost tangential use of AI, harnessing algorithms and/or machine learning in order to supplement or support their fundamental operations. Conversely, others provide a service that supports AI applications.

For example, Ocean Protocol is a blockchain-based marketplace for data that could conceivably be used by developers building their own chatbots and AIs. Similarly, inSure DeFi is a decentralized insurance platform that uses machine learning to help it process claims. Such a use of artificial intelligence is becoming increasingly common in our increasingly digitalized world, with everyone from JPMorgan to Walmart already having track records of using AI in some capacity or another.

In other words, many so-called AI tokens are doing nothing out of the ordinary and that many other non-crypto businesses haven’t already done. Yet for some experts and observers, it gets even worse, because some newer, post-ChatGPT AI tokens are likely to be opportunistic ploys to exploit the market for profit.

Source: Twitter

As a general rule of thumb, it’s worth thinking and researching very carefully before investing in any cryptocurrency with ‘GPT’ as a suffix. There is no shortage of such projects, and while a small percentage of tokens with ‘GPT’ in their names may actually have genuine use cases, others are either out for a fast buck or are just way too ambitious to ever be fully realized.

Some Developers Are Serious About Combining Crypto and AI

Despite the fact that there are many, many dubious new AI-themed cryptocurrencies out there, some projects do appear to be genuinely serious about marrying blockchain and artificial intelligence. This includes some of the projects covered by CoinGecko’s AI category, with most of these long pre-existing the arrival of ChatGPT.

For example, the aforementioned SingularityNET is a blockchain-based platform that aims to pool together various separate AIs and algorithms in a decentralized way. This is with the aim to develop artificial general intelligence (AGI), which is considered the Holy Grail of AI.

Source: Twitter

Likewise, Fetch.ai is a decentralized marketplace for AI-based services and products. It enables users to use native token FET to pay for the automation of various tasks, from peer-to-peer communication to controlling energy consumption. As the tweet above implies, it can use smart contracts to execute actions on behalf of AIs, something which could make it key in integrating ChatGPT-style bots with blockchain and crypto.

And beyond existing crypto-AI platforms, more developers within crypto are choosing to focus their work on AI-related applications. Most recently, Drexel University computer scientist (and Terra Luna Classic developer) Edward Kim published a blog in which he revealed that he’d been working on a “machine learning application specific chain that decentralizes the power of AI.” This application fits validator nodes with high powered GPUs so that they can provide access to machine learning models for anyone interacting with its blockchain, something which would widen access to AI tools.

As Kim sums up in his blog, “there is no guarantee of success” for this new venture of his, which would provide Terra Luna Classic with a considerable amount of utility if it were to bear fruit. The same could be said for other attempts to combine artificial intelligence and blockchain, yet given just how central to our lives AI is likely to become in the not-too distant future, there’s little doubt that crypto will have to find a way of integrating with AI if it’s to have a similar impact.