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Crypto x AI - better or worse? 🧠
Is the hype around AI similar to crypto and blockchain years ago? Seeing crypto and AI as unrelated technologies is a mistake. They are complementary, each improving the other.
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AI is changing everything. Web3 promises to changed the world for better.
In one corner, we have cryptocurrency (crypto), a groundbreaking disruptor that has revolutionised the financial landscape, introducing decentralised transactions and challenging traditional systems. In the other corner, we have artificial intelligence (AI), the formidable force behind intelligent automation and data analysis, reshaping industries across the globe.
Now, picture these two titans joining forces, combining their strengths, and unlocking a realm of unimaginable potential. Let’s see how that might go in today’s deep dive.
How can AI make Web3 better?
Enhancing crypto security through AI 🔒
In the world of digital assets, security is paramount. AI-powered algorithms have the potential to fortify the security infrastructure by detecting and preventing fraudulent activities, such as hacking attempts, identity theft, and phishing attacks. With AI's ability to analyse vast amounts of data and identify patterns, it can serve as an intelligent shield against malicious actors, safeguarding users' digital assets.
But, and a big one at that.
AI could make it easier for hackers to attack smart contracts.
AI could also be used to better defend these contracts.
It's unclear which way the balance will tip in the future, and the evolving role of AI in crypto security remains a topic of ongoing debate.
Smarter trading with AI 💸
By analysing market trends, historical data, and even the vibes on social media, AI becomes your trusty trading companion. It whispers predictions in your ear, empowering you with smart strategies to navigate the volatile seas of crypto trading. Sit back, relax, and let AI be your co-pilot.
Price Predictions: By leveraging machine learning algorithms and analysing historical data, AI can make accurate price predictions. These predictions could include short-term and long-term forecasts and can help traders make informed decisions.
Risk Management: AI could be used to develop sophisticated risk management strategies. For example, it could analyse a trader's risk tolerance and then use that information to optimise a trading strategy.
Trading Bots: AI-powered trading bots could automatically execute trades based on predetermined criteria. These bots could operate 24/7, making them particularly useful in the crypto market, which operates round the clock.
Sentiment Analysis: By analysing social media posts, news articles, and other sources of public opinion, AI could predict how market sentiment will affect crypto prices.
Portfolio Management: AI could analyse the performance of different currencies and use this information to recommend portfolio adjustments.
Real-Time Analysis: AI can provide real-time analysis of the market, identifying trends and opportunities as they occur. This could give traders a significant advantage, allowing them to act on opportunities faster than humanly possible.
Smarter smart contracts?
Imagine if AI could jazz up smart contracts by making them adaptable on the fly, smart enough to make their own decisions, and even sniff out any sneaky fraud attempts. Not only that, AI could choose the best time to make things happen and even play referee if any disputes pop up. And if that wasn't cool enough, it could help us whip up complex contracts without breaking a sweat. Of course, mixing AI and smart contracts isn't a walk in the park - we've got to think about security, privacy, and all that good stuff. But hey, as AI and blockchain keep getting better, we're bound to find ways to sort those challenges out, leading to some super smart contract systems down the line.
AI-Driven personalised financial services 🤖
Who said finance couldn't be personalised? AI begs to differ. With its exceptional data-crunching abilities, AI analyses your financial history, preferences, and behaviour to offer tailor-made investment advice, budgeting tips, and even predictive lending options.
Improving blockchain scalability ⚙️
Let's face it, blockchain scalability can be a bit of a bottleneck. AI can address this issue by optimising consensus algorithms and improving network performance. AI-powered solutions can dynamically adjust network parameters, enhance data compression, and optimise resource allocation, resulting in faster, more scalable blockchain networks.
How can Web3 make AI better?
Advancing AI with crypto incentives: AI needs data like plants need sunlight. Enter crypto incentives. By leveraging blockchain's transparency and immutability, AI researchers can access a treasure trove of diverse and high-quality datasets. Crypto users, in turn, reap the benefits of AI-driven innovation. It's a win-win situation.
Decentralised AI: The concept of decentralisation is at the heart of blockchain technology. Now, imagine infusing this principle into the world of AI. We could have AI models that are decentralised, enhancing data privacy, reducing biases, and even potentially curbing the growth of centralised AI monopolies.
This concept, however, is not without its sceptics. Some argue that AI, due to its computational intensity and the expertise required, isn't a technology that easily lends itself to distributed systems. Yet, the blockchain community is eager to prove these sceptics wrong, fuelling hope for more interesting overlaps in the near future.
Data privacy and control: With Web3, users could have more control over their own data, including how it's used by AI systems. This could potentially lead to improvements in data privacy and consent. For example, users could choose to sell their data to AI developers in a controlled and consented manner.
Transparent and auditable AI: Blockchain's transparency could make it easier to audit AI systems and hold them accountable. This could lead to improvements in AI ethics and trustworthiness.
Incentivization mechanisms: Smart contracts and tokens can be used to create new ways to incentivise the development and improvement of AI. For example, users could be rewarded for contributing to the training of an AI system.
DAOs and AI: These are organisations that are run by code on a blockchain. DAOs could be used to govern AI systems in a decentralised and democratic way. Think of a DAO as a democratic club, but online and super transparent, thanks to the magic of blockchain. It lets everyone in the club have a say about how an AI system works, like a big team project! It's not just about making the AI smart but also about making it fair and trustworthy. Plus, people can get rewarded for helping out, like sharing their data to make the AI even smarter. But don't forget, it's still pretty new tech, so there might be some speed bumps along the way!
Real-Life Examples of AI x Crypto
How can crypto and AI tag team to pump up real-world application.
CipherTrace: a leading blockchain security company, employs AI to detect and prevent cryptocurrency fraud, aiding in the fight against money laundering and illicit activities.
Numerai: a crowdsourced hedge fund, combines crypto and AI to create a platform where data scientists can build AI models and compete to earn cryptocurrency rewards based on their performance.
SingularityNET: a decentralised AI marketplace that enables AI developers to share and monetise their algorithms using blockchain technology, fostering collaboration and innovation in the AI community.
Fetch.ai: a decentralised machine learning platform that leverages blockchain and AI to create autonomous economic agents that can negotiate and trade services in a decentralised manner, optimising resource allocation.
Ocean Protocol: a blockchain-based data-sharing platform that allows individuals to securely share and monetise their data using AI algorithms, empowering data owners and fuelling AI advancements.
AI, Metaverse, and NFTs: Cosmic Triple Threat!
Can AI spice up the Metaverse and NFTs?
You bet it can!
And those NPCs you interact with?
They're not your run-of-the-mill programmed bots anymore.
AI's got them chatting, acting, and reacting like real people.
AI is going to be a big player in the Metaverse, and it'll do some cool stuff like:
AIOps: Basically, this means AI will help manage all the complicated infrastructure that supports the Metaverse, like hardware, software, and communication systems.
Inclusive User Interfaces: AI can help create a more inclusive Metaverse. We're talking things like image recognition for folks with visual impairments, automatic translation, and even brain-computer interfaces!
Enhanced Smart Contracts: AI could help make transactions in the Metaverse more fair and democratic by preventing things like a single person buying up all the NFTs.
AI for Immersive Digital Worlds: Think of creating super realistic digital spaces where people can interact. NVIDIA’s Omniverse is already doing stuff like this.
AI as a Creative Partner: We've already got AI that can write creative stuff or generate realistic images based on text descriptions. So, imagine using AI to help create stuff in the Metaverse.
Intelligent Networking: The Metaverse aims to make online social networking better, and AI can help make these experiences more inclusive and safe.
Now, let's talk NFTs.
AI can do a whole lot more than just making NFTs look pretty. It can verify if they're the real deal, or even craft them to suit your style.
But it's not all rainbows and sunshine. With great power comes... well, a whole lot of questions! When does the physical medium become redundant? What does creativity mean in this brave new world? Is this an art revolution or a scary AI takeover?
And it doesn't stop at art. Imagine writing a paragraph about a virtual space, and voila! - it springs to life in the Metaverse, all thanks to AI. And we're not just talking about basic stuff. We're talking about rich, detailed, customisable worlds that are as real as it gets.
The Devils's advocate
Crypto and AI: Save Us From the Hype - Noelle Acheson
The hype we’re hearing around AI now is reminiscent of the hype we heard around crypto and blockchain years ago. That exuberance was misplaced, as is today’s. The impact of crypto and blockchain is real and will continue to evolve; it’s just not what some tried to sell the public in the early days. The same will happen with AI – the impact will be considerable, but the hype is setting the field up for disappointment.
Why Web3 and the AI-Internet Belong Together - Michael J. Casey
A tweet this week from Chris Frantz, the founder of email platform Loops, irked me. Frantz said “90% of the people I know in web3 have pivoted their company to AI.”
What got to me was not that founders are so obsessed with securing venture capital that they’ll glob onto the next “in” thing. (Let’s save that problem of Silicon Valley fickleness for another time.) It was that people see the various elements of the complex new digital economy forming around us – artificial intelligence, blockchain, the metaverse, programmable money, digital identity, cryptographic proofs, quantum computing, IoT and so forth – as unrelated, exchangeable pieces, when they’re really intertwined and complementary.
TTD Week That Was 📆
The week of lawsuits, SEC and the regulators push for crypto as securities.
Saturday: Will Bitcoin drive whole of crypto? 🤗
Thursday: Bitcoin ETF storm has arrived🌪
Wednesday: Finance giants coming for crypto 🌀
Tuesday: Vitalik's vision 🕶️
TTD Week in Funding 💰
Poko $4.5 Million. Virtual cards on Visa/Mastercard rails from wallets and developing a cash savings product for users to earn a yield on stablecoins.
Dtcpay $16.5 Million. Bridging traditional and digital currencies through its integrated payment platform.
Kaito $5.5 Million. Crypto search engine combines real-time data with large language models like ChatGPT.
TaxNodes $1.6 Million. Simplify crypto tax computation and filing in India.
Maverick Protocol $9 Million. Decentralised finance (DeFi) infrastructure provider focused on increasing industry efficiency.
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