All information in this article should be considered for educational purposes only and does not constitute or attempt to be financial advice of any kind. The author has no affiliation with any of the cryptocurrencies discussed in this article.
In the last month of 2022, a new technology finally reached mainstream attention like never before, as OpenAI’s Chat-GPT mania attracted millions of users. For years, the public had heard that artificial intelligence (AI) was about to revolutionize everything and change the world as we know it forever.
Still, for the longest time, the results remained invisible to the naked eye. From Tesla’s self-driving cars to the behind-the-curtain AIs used by major tech companies like Meta and Google, the power of AI had been largely indistinguishable from the everyday tech services they help to power. That is, until last summer.
With clickbaity AI-related news and novel applications seemingly splashed everywhere from mainstream to social media, and new offerings such as Google’s BARD playing catchup with Microsoft-partnered OpenAI, where is this paradigm-shifting new technology heading and where will it intersect with cryptocurrency technology?
The Advent of AI in 2022
With the arrival of the beta for OpenAI’s DALL-E 2 in July 2022, the masses had their first taste of a world-class AI system delivering text-to-image generations that would have been inconceivable to most people not long before. Following shortly afterward, image generators like Midjourney and Stable Diffusion caused the AI excitement to pick up even more. Finally, it all culminated in December 2022 with the release of OpenAI’s ChatGTP, a natural language bot that picked up its first million users in five days – a far-and-away record for the tech industry.
As it happens, these developments also coincided with crypto’s year of cascading bankruptcies, which has seen the market cap of the industry fall by roughly two-thirds since May 2022. There is also talk about how crypto projects may be on the losing end of VC fund-raising competition with AI companies.
However, what is less understood is that crypto and AI are already beginning to integrate, and the tokens are doing well in the new year. Indeed, a new wave of AI projects interwoven with blockchains and tokenomics may be the best hope of bringing a dose of decentralization to the highly centralized AI field. Let’s take a closer look.
What are AI cryptos?
AI cryptos are digital tokens that act as a medium of exchange on blockchain networks related to AI projects. Typically, the tokens can be used to access the AI features of the related platform. In some cases, as with SingularityNET, it’s even possible to create a hybrid AI system using constituent parts.
While AI systems require massive tranches of data that are best collected by centralized entities – in addition to the current technical impossibility of running demanding AI systems on a distributed ledger – blockchain technology can be used to help direct distributed computing assets.
Examples of this exist in non-AI crypto projects such as the Render Network, which uses blockchain and tokenomics to incentivize users to supply GPU power for graphical rendering.
The AI-crypto sector is still getting its sea legs, and most AI tokens were still considered microcaps, meaning they had a market cap under $50M, until the AI gold rush kicked off in full. The risk of going to zero is always higher in microcaps, but so are the potential rewards for investors.
Given the exponentially growing power of these systems, the heavy tendency toward centralization in the AI industry could lead to major societal dilemmas down the road. Anything that chips away at this problem should be regarded not merely in investment terms but as something of great political and economic significance.
Still, not everyone is convinced that AI and crypto are a thing. DeFi legend Andre Cronje was damning in a recent tweet, saying unequivocally that the two don’t mix.
https://twitter.com/AndreCronjeTech/status/1623328728326541315
This hasn’t stopped the markets from ballooning up the last few weeks, with AI projects now enjoying a combined market cap of over $4.5 billion and some even thousands of percent in growth. AI is suddenly one of the strongest new narratives for crypto in 2023, much like Web3 and metaverse gaming were in 2021, and it might be some time before reality brings down the hype.
Until then, here are a few of the biggest AI cryptocurrencies out there at the moment.
AI cryptos to watch in 2023
The Graph
The Graph protocol allows for the indexing and retrieval of blockchain data, much like how Google indexes and retrieves data from the web. By classifying data into smaller “subgraphs,” The Graph makes it more manageable for developers to access and use this data in building smart contracts and other blockchain projects.
The decentralized protocol enables querying on the Ethereum network, which is particularly beneficial for projects with complex smart contracts, such as Uniswap and NFT projects like Bored Ape Yacht Club.
The Graph has positioned itself as a serious player in the crypto industry as a decentralized infrastructure platform. It allows for the creation of computationally efficient and effective APIs, which can be queried using a standard GraphQL API. The protocol has its own native cryptocurrency, GRT, built on the ERC-20 framework. As of mid-February 2023, it had a market cap of $1.3 billion, compared to late January’s $818M.
SingularityNET
SingularityNET is an open-source blockchain platform that lets developers create, share and monetize AI services. Transactions are performed using its native cryptocurrency AGIX. Users can browse and purchase AI services on the platform’s marketplace. The idea is to allow for “composability” in AI, meaning a disaggregation of AIs from elsewhere recombined into innovative solutions on the platform.
The goal is to create a marketplace for AI tools that fosters innovation, sharing, and integration into programs, all while using tokenized incentives. SingularityNET also gives developers tools to build their own algorithms as well as access to a multitude of AI algorithms and data resources.
The platform’s market cap was $466M as of mid-February 2023, with AGIX up 900% in the last 3 months.
Ocean Protocol
Ocean Protocol is a blockchain-based platform facilitating the exchange and monetization of data and the services that rely on it. Built on Ethereum, the protocol acts as a marketplace to buy, sell, or trade data assets privately and securely through smart contracts.
Ocean Protocol’s open-source nature makes it simple for developers to create decentralized applications (DApps) that access data from various sources in both public and private hubs. Furthermore, it uses non-fungible tokens (NFTs) called “data NFTs” built on the ERC721 standard as well as “data tokens” built on ERC20 to interface with decentralized finance (DeFi) protocols and other blockchain entities. In a sense, the Ocean Protocol makes crypto wallets into data wallets.
As of mid-February 2023, Ocean Protocol sat at a market cap of $281M.
Fetch.ai
Fetch.ai is a decentralized platform that uses AI and blockchain tech to automate business tasks like data processing and trading. The network uses autonomous agents representing users, businesses, devices, and services. These agents collaborate together in a kind of virtual economy, optimizing a variety of functions in business and other domains. The team’s goal is to bring about a self-evolving system with agents that can learn and improve without much human input.
The network’s native FET token incentivizes stakeholders, facilitates commerce, and rewards validators for verifying new blocks on its chain. The project aims to build the infrastructure required for developing decentralized peer-to-peer (P2P) applications free from centralized rent-seeking.
As of mid-February 2023, it had a market cap of $322M with a fully diluted value of over $1.3 billion.
iExec RLC
iExec RLC is an AI blockchain platform that lets users monetize computing power and access on-demand cloud computing resources. The platform has a marketplace for users to exchange computing assets and conduct transactions using RLC, the native token of iExec.
The platform also offers a variety of products, including an Oracle factory for creating custom oracles as well as confidential computing. Additionally, the iExec SDK helps developers to get around Ethereum’s scalability issues and provides access to CLI and JS libraries for off-chain computations through the platform’s decentralized cloud.
As of mid-February 2023, iExec had a market cap of $155M.