New lawsuits filed by the US Securities and Exchange Commission against Coinbase Global Inc. and Binance Holdings Ltd. have raised serious questions about the future of cryptocurrencies.
As digital assets face increasing regulatory pressure and other market hurdles, they have also been dethroned as the latest tech fad. When OpenAI released its ChatGPT bot in November, it paved the way for practical uses of artificial intelligence. Since then, AI has captured the attention of founders and investors, the same people who fueled the rise of cryptocurrencies.
AI may have stolen the spotlight, but some cryptocurrency enthusiasts say it can bring new opportunities to the blockchain industry.
โYou can actually see a situation where AI is sort of the catalyst to quickly get back on the blockchain,โ said Adam Struck, founder and managing partner of investment fund Struck Crypto, which has become more immersed in blockchain. AI since the launch of the ChatGPT bot.
block chain the technology can bring greater transparency and decentralization to AI, which can be extremely opaque in terms of what data is used to train models, according to Alex Felix, managing partner and chief investment officer at crypto firm VC CoinFund.
CoinFund recently endorsed Tools for Humanity. The cryptocurrency startup co-founded by OpenAI's Sam Altman, which raised $115 million, shows a real use case for cryptocurrency in AI, Felix said.
Tools for Humanity, which developed a digital currency called Worldcoin, created a small orb that scans people's eyeballs to generate a unique blockchain-based ID for that individual, giving them a digital "proof of personality," which when combined with Worldcoin can also be used to facilitate secure payments.
"For us, started with where is the world going with AI? And the way to solve that was crypto,โ said Tiago Sada, head of product at Tools for Humanity.
Felix compares the current AI craze to the crypto coin initial offering boom in 2017, when investors rushed to pick up crypto tokens at random, many of which were scams. But he said this time, it's easier to look at new projects and determine if someone has enough AI experience.
โIt's harder to fake credibility because the circles are so small,โ Felix said.
Just as blockchain can bring more transparency to AI, the technology can strengthen cryptography by improving the ways digital asset platforms classify data, protect information and interact with users, according to some crypto supporters. .
Hackers have been able to drain millions of dollars from blockchain protocols. AI robots it can reduce the swath of cyberattacks plaguing decentralized finance, according to Struck.
"Essentially, you could do very, very large amounts of what's called penetration testing or penetration testing just by having these bots simulate attacks," he said, adding that this test could detect vulnerabilities in smart contract code that hackers hackers can manipulate to divert cash.
Bots can also be used to moderate content to filter out spam and scams on messaging platforms like Telegramdiscord, Sign, wechat and WhatsAppsaid Blow. While this type of benefit is not limited to cryptocurrencies, it is important for an industry where many scams originate in social media.
โA lot of the users are focused on these messaging apps,โ he said.
In addition to protecting investors from being scammed, many in the industry see other ways that AI makes it easier for users to interact with cryptocurrencies.
Solana Labs, which developed the Solana blockchain, released a ChatGPT plugin in May "to improve the user experience, simpler for people to understand what's going on on the blockchain," said Tal Tchwella, head of Solana Labs product.
Crypto has been criticized for being too unwieldy for regular consumers, but the ChatGPT plugin guides users through blockchain transactions in a conversational way.
In a virtual demo, Tchwella showed how a customer can connect their crypto wallet and ask the bot to show them non-fungible tokens they can pay for or a specific collection. After scrolling through the options, customers can ask the bot to help them purchase an NFT. The bot then generates a QR code that customers can scan to complete the sale.
โAI will have an impact in every area, every sector, every industry, and we're just trying to embrace it,โ Tchwella said.
Still, other crypto companies have been hesitant to fully jump on the AI โโbandwagon, citing its potential dangers. Derivatives exchange Bitget rejected a ChatGPT integration due to concerns that users will get misleading information and false data in their queries.
Tools for Humanity has been lampooned for its eye-scanning technology and called into question whether the sensitive biometric data it collects is actually protected.
While The Graph, an indexing protocol, has been leveraging AI and machine learning for over two years to make blockchain data easier to find and use, it doesn't want its GRT coin to be classified as a AI token, according to Tegan Kline, CEO of Edge & Node, the startup that created the platform.
Unlike other cryptocurrency companies that have moved quickly to AI to cash in on the hype, he said Edge & Node prefers to be known first and foremost as a blockchain startup because there are still "difficulties" around AI, including the way technology makes it harder to tell what's true online.
Meanwhile, "a lot of people are putting AI into their presentations to attract more VC funding," Kline said.
