For investors, artificial intelligence (AI) was one of the top crypto narratives of 2023. The sudden arrival of ChatGPT seemingly out of nowhere got everyone talking about artificial intelligence and the emergence of new AI crypto tokens.
However, if you look at a list of the top AI crypto tokens right now, there are few options. Only a few are among the top 200 cryptocurrencies by market cap, and only two have market caps over $1 billion. The cryptocurrency market needs the equivalent of a ChatGPT token with broad investor appeal and, so far, has found none.
The Search for Exclusive AI Crypto Tokens
One problem, simply put, is that some AI crypto tokens are not actually AI crypto tokens. For example, consider Lend (RNDR 5.51%) and Red Akash (AKT -1.53%)which rank as two of the top AI crypto tokens by market capitalization, according to CoinGecko.
Render is a token for distributed computing, while Akash Network is a token for cloud computing. Yes, AI can make the computing process more efficient or more powerful in both cases, but the concepts of distributed computing and cloud computing have been around for a long time. As a result, I wouldn't consider them exclusively AI cryptocurrencies.
Image source: Getty Images.
In terms of a pure AI crypto token, two of the most intriguing options are Fetch.ai (FET -7.16%) and SingularityNET (CRYPT: AGIX). Fetch.ai is a decentralized machine learning network, while SingularityNET is a blockchain-powered artificial intelligence marketplace. But both were released before the current one. generative AI trend powered by ChatGPT took off. And with the recent launch of the new ChatGPT store, I'm not as bullish on these two tokens as I was last year.
Where are the multi-billion dollar market opportunities?
There are certainly many big ideas for the future intersection of AI and blockchain technology, and that means the potential for new multi-billion dollar market opportunities to emerge. For example, the decentralized blockchain oracle network Link of the chain (LINK 6.51%) is looking at potential AI use cases that can harness the power of block chain technology. A recent Chainlink developer conference included a discussion on artificial intelligence and featured Eric Schmidt, former CEO of Google's parent company. Alphabet (and now Chainlink strategic advisor).
In late 2023, Silicon Valley venture capital firm Andreessen Horowitz revealed a list of potential blockchain use cases for AI. In theory, any of these use cases could become the basis of a new crypto token with real-world utility and broad popular appeal. For example, let's consider blockchain games, where generative AI could be used to create new digital assets within a game environment. Or, the AI โโcould become the creator of the game itself. Conceptually, an AI crypto token created for a specific blockchain game would be similar to a metaverse crypto token created for a particular metaverse world.
Additionally, at the World Economic Forum's annual summit held in Switzerland this year, participants discussed possible ways blockchain technology could be used to store AI training data. Since blockchains are decentralized and permissionless, that would, in theory, prevent any one company from having a monopoly on the future of AI. Basically, you would pay for the AI โโtraining data with a crypto token, and the providers of the AI โโtraining data would also be compensated with those crypto tokens.
Can some AI crypto tokens be purchased right now?
From my point of view, there are two main reasons to invest in an AI crypto token. The first is that it is an exclusive AI crypto token created specifically to harness the power of generative AI. The second is that it offers obvious utility and has a clear multi-billion dollar market opportunity. Right now, there are AI crypto tokens that meet one of these conditions, but not both.
So buyer beware. There are many crypto tokens trying to win over investors by including โAIโ or โGPTโ in their names. That approach might have worked in 2023, but now the search is for an AI crypto token with real-world utility.
Despite the rapid pace of innovation within the generative AI sector, it is unlikely that we will see the first multi-billion dollar crypto token by the end of this year. It takes time to develop these things, especially in a field as new as generative AI. That said, I will certainly keep an eye on new developments at the intersection of AI and cryptocurrencies.
Dominic Basulto has no position in any of the stocks mentioned. The Motley Fool has positions and recommends Chainlink, Fetch and Render Token. The Motley Fool recommends Akash Network. The Motley Fool has a disclosure policy.
