AI In Crypto?
The burgeoning field of artificial intelligence (AI) has ignited a fervour among investors, propelling coins associated with AI-focused crypto projects to unprecedented heights. As reported by Reuters, this surge mirrors the trajectory of tech stocks like Nvidia, driven by an insatiable appetite for applications such as machine learning.
According to recent data from CoinGecko, the combined market value of these AI-linked tokens has skyrocketed from $2.7 billion last April to a staggering $26.4 billion. Over the past year, these tokens have outpaced even the meteoric rise of Bitcoin, with gains ranging from 145 per cent to 297 per cent in the last 30 days alone.
Experts speculate that this convergence of AI and blockchain technology could potentially address some of the challenges faced by the AI industry, such as privacy concerns and the need for increased computing power. As reported by Reuters, Markus Levin, co-founder of XYO Network, a blockchain data storage firm, remarked, "As both AI systems and blockchain networks continue to grow, we will see more and more use cases fusing together the two industries."
Increase In Trading
The CoinDesk Indices Computing Index, inclusive of AI-linked tokens, has surged over 165 per cent in the past year, surpassing even Bitcoin's 151 per cent rise. Trading volumes in AI tokens have witnessed a sharp increase, reaching an all-time high of $3.8 billion in late February, according to data from Kaiko Research.
"There is a significant chance that AI applications will be crypto's raison d'être," noted fund managers Matthew Sigel and Patrick Bush of VanEck, reported Reuters.
Prominent blockchain projects in this domain include the Render Network, Fetch.AI, and SingularityNET, which offer platforms for various AI applications.
"Investors are starting to realise that if you want real value, you need products that are uncorrelated to the crypto market," observed Ahmad Shadid, founder of io.net.AI, an AI-focused blockchain startup, as reported by Reuters.
AI-Linked Services
Blockchain technology has enabled a plethora of AI-linked services, ranging from payments and trading models to machine-generated non-fungible tokens and blockchain-based marketplaces for AI applications. VanEck forecasts that revenue from AI crypto projects could soar to $10.2 billion by 2030 in their base case scenario and exceed $51 billion in their bullish outlook.
Shadid emphasised the scalability afforded by offering crypto tokens as incentives. "The reason we can scale fast is because of the token we have coming out," he explained. "The token incentivises owners of physical infrastructure to bring their computers onto our network."
However, amid the excitement surrounding the AI boom, cautionary voices warn of the uncertainties inherent in picking winners and losers. Levin cautioned, "We're still in the very early stages of AI networks integrating with blockchain-based networks, and the utility of a lot of tokens is still very much uncertain."
