Artificial intelligence (AI) and cryptocurrencies are two burgeoning technologies that could revolutionize the way we think about finance. In this article, we explore the connections between these two fields and how AI is being used to enhance the functionality of cryptocurrencies.
The combination of two important technologies that are AI and blockchain offers new perspectives in the field of finance and financial market prediction. Indeed, cryptos are taking advantage of the great data analysis and prediction capabilities that AI offers, to improve security and user experience. This article will present how AI is used in the blockchain field, as well as 5 cryptos that use AI in their services.
AI tokens : what are they?
AI is a revolutionary technology that has the potential to transform many industries, including the cryptocurrency sector. AI tokens are crypto-currencies that use AI to improve security,user experience,scalability or other factors. They can also power AI-based applications or projects, such as marketplaces, decentralized exchanges, image or text generation services, and AI-based investment protocols.
What is a blockchain?
A blockchain is a distributed digital list that records data such as transactions made in cryptocurrency. What makes it different from other databases is that it is decentralized, meaning that many identical copies of the blockchain database are kept on many different computers spread across a network.
How does the blockchain work ?
The blockchain can be described as a chain of successive blocks of data. This means that when new data is added to the network, a new block is created and added to the chain. Transactions are secured using cryptography, which means that nodes must solve complex mathematical equations before processing a transaction.
What does AI bring to a cryptocurrency?
A cryptocurrency is a decentralized digital currency. It is not issued by central banks, and is not stored in traditional financial institutions. The asset value of cryptocurrencies has exploded over the past few years before crashing in 2022.
Cryptocurrencies are increasingly making use of AI’s analytics and machine learning capabilities. Among the many benefits that the use of AI brings to cryptocurrencies are:
- Analyze data and make predictions;
- Improving DEX (decentralized exchanges) through AI sentiment analysis;
- Personalizing the interface to improve the user experience;
- Enhancing security.
What are the characteristics of a crypto AI?
The fact that cryptos operate in a decentralized manner makes them more compatible with the use of AI. With the large amount of data to process in the blockchain, there is a risk of loss or hacking. Therefore, AI is very important in analyzing this large amount of data.
What makes AI tokens unique is that they have the following characteristics:
- Cryptocurrencies are specific to each use case;
- They offer a smaller sensitivity to the general market downturn;
- Tokens (crypto-currencies) are used to develop the system with better data ;
- Crypto AI enables access to real-world services;
- AI’ s powerful threat detection capability decreases the risk of hacking.
List of 5 cryptocurrencies that use AI
Artificial intelligence is increasingly being used in crypto-currencies. The use of AI in cryptos helps to improve security and user experience. The following sections present 5 cryptos that use artificial intelligence.
The Graph
The Graph uses AI to give users and developers the ability to collect and store data accessible to a large number of users. It uses blockchain technology and its cryptocurrency is GRT. The graph allows an AI application using the blockchain to be fed with data from other blockchains.
The Graph is a protocol that does indexing to query networks that take care of making the data accessible, thanks to decentralized APIs. The Graph allows anyone to create and publish APIs in the network.
Since 2023, The Graph only supports the Ethereum blockchain. However, the addition of other blockchains is in the works. The Graph currently hosts the following services:
- Gnosis;
- NEAR;
- Polygon;
- BNB.
In terms of market capitalization, The Graph is the leading AI cryptocurrency. It has a market cap of $1.5 billion and a daily trading volume of $588 million according to CoinGecko data.
The Graph is useful in the following use cases:
- Decentralized and secure data access;
- Preparing data for machine learning AI models;
- Facilitating the development of AI-powered DApps (decentralized applications).
SingularityNET
SingularityNET is a blockchain platform for building, sharing and monetizing AI services. It uses the AGIX cryptocurrency. SingularityNET has its own internal marketplace where all users can pay for AI services using the AGIX cryptocurrency.
This platform gives developers the opportunity to make money fromAI without building applications entirely. Developers can also purchase AI solutions for use in their applications.
Some of the benefits SingularityNET offers include:
- Data privacy;
- A marketplace for AI services;
- Monetization ofAI models;
- Guidance on usingAI for decentralized development;
- Improved access toAI.
Fetch
Fetch is a platform that enables the development, deployment and management ofblockchain-based AI systems. It’s a kind ofblockchain-specific AI lab that makes AI toolkits available to everyone. Fetch helps automate tasks such as data processing and trading. It uses its FET crypto-currency as a payment method.
This platform helps in data analysis, decision making and several other blockchain-based services. Fetch users have the ability to deploy autonomous software agents, which provide various digital services with an emphasis on decentralization and permissionlessness.
Among the multiple benefits Fetch offers are:
- Out-of-the-box machine learning models;
- Support for low-latency transactions;
- Secure infrastructure.
Ocean Protocol
Ocean Protocol is a decentralized data sharing platform based on the Ethereum blockchain. Ocean Protocol allows data providers to sell their data on a decentralized blockchain-based marketplace. It uses the OCEAN crypto-currency for its various financial transactions.
It uses artificial intelligence to process data in a completely anonymous, privacy-friendly way. Its market capitalization is estimated at 230 million dollars.
Ocean Protocol offers the following features:
- Decentralized and secure access to data through the blockchain;
- Predictive data analysis;
- Image recognition.
Numeraire
Numeraire is an Ethereum blockchain network that uses AI to make investments in the stock market. The crypto-currency used by Numeraire for various transactions is NMR. It usesAI to improve financial predictions on hedge fund markets.
Numeraire allows data scientists and developers to create machine learning AI models for the financial markets. AI developers and data scientists are rewarded in MNR for each successful prediction. In return, Numeraire uses these predictions to build its stock market investment strategy.
It enables decentralization in the field of data science, which allows investors to have accurate and efficient prediction models for the stock market.
Its current market capitalization is estimated at $128 million, with a daily trading volume of $22 million.
Among the multiple benefits Numeraire offers are:
- Decentralized AI and data science modeling;
- A hedge fund that leverages AI to develop investment strategies;
- Continuous improvement of AI models through data scientist rewards.
Conclusion
There are many projects currently underway touse AI in the blockchain space. It is a big market that keeps growing.AI models do data analysis and allow investors to make better investments in the financial markets.
AI crypto-currencies have great security against cyber attacks. But like all crypto-currencies, they are still very vulnerable to market instability. That’s why they experienced a sharp drop in 2022. Their security depends on the way they are stored and the risk management policy in place.
With the current rapid development ofAI, it is certain that new areas of application of artificial intelligence in blockchain will soon emerge.
