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At the end of 2022, the ChatGPT chatbot appeared, which became the fastest growing service in history. Just two months after the launch, the number of users of the hype tool reached 100 million.
The hype around web applications based on neural networks could not but affect the crypto industry – a lot of tokens appeared, in one way or another connected with artificial intelligence (at least according to the assurances of the developers).
- At the beginning of 2023, the prices of most AI tokens showed impressive growth. In January-February, “X” even made half-forgotten and low-capitalized coins that appeared on the market a few years ago.
- Many experts associate the hype in the new segment of the crypto market with the hype around tools like ChatGPT and DALL-E 2.
- Some well-known representatives of the community doubt the possibilities of integrating the blockchain with AI, considering the newfangled coins as “meme tokens”.
Chronicles of hype around AI tokens
Interest in artificial intelligence has increased significantly in recent years. Many perceive AI-based solutions as disruptive, capable of drastically changing many industries, including the crypto industry.
Enthusiasts see technology as a key component of next-generation ecosystems. Therefore, it is not surprising that many projects in the digital finance world position themselves as closely related to AI.
Similar tokens showed an impressive rise in early 2023. For example, on January 8, the Artificial Liquid Intelligence (ALI) crypto asset was trading around $0.009955. A month later, on February 8, the quotes of the token reached $0.084 – an increase of ~ 744%.
Ahead of the launch of ChatGPT in November 2022, Fetch.ai (FET) was trading at $0.06. On February 8, 2023, the token reached a local peak at $0.549, promising an almost tenfold return on timely invested funds.
In early March, as Bitcoin tested below $20,000, the hype around AI tokens subsided. However, the segment’s combined asset capitalization is in excess of $1.4 billion at the time of writing, according to CoinGecko And CryptoRank.
The ratings of the above-mentioned analytical services are headed by SingularityNET (AGIX). Total value of platform coins circulating on the market approaching $400 million (as of 03/10/2023).
SingularityNET is the leading decentralized AI marketplace powered by blockchain. Online.
The platform allows developers to host, share and monetize their algorithms. The goal of the project is to create an open, transparent and accessible artificial intelligence market for all.
British blockchain startup Fetch.ai develops the technology of autonomous economic agents (Autonomous Economic Agent, AEA).
AEAs are autonomous systems based on machine learning algorithms that act on behalf of their owners in various economic activities. For example, agents can look for profitable deals in the cryptocurrency market, buy concert tickets or book hotel rooms.
The product line includes: Mettalex decentralized exchange, Resonate social network, MOBIX micromobility ecosystem and Fetch Wallet.
The FET crypto asset is used to pay for the services and resources of the Fetch.AI network.
Artificial Liquid Intelligence (ALI) — utility token of the AI Protocol and decentralized applications built on its basis. The ecosystem is backed by research and development studio Alethea AI, which raised $16 million in 2021 to “build a scalable infrastructure for the AI-powered non-fungible token (NFT) marketplace.”
“Alethea AI has succeeded in creating AI-based avatars with NFT protection. This is a whole platform for interactive entertainment,” commented Mark Cuban, who participated in the token sale.
Prospects for AI tokens and opinions of market participants
In the first months of 2023, the hype was so great that many community members saw in the new segment a powerful driver for the next rally in the cryptocurrency market.
In addition to the aforementioned “blue chips”, the prices of even half-forgotten tokens of past years, such as Big Data Protocol (BDP) And Measurable Data (MDT). Both projects specialize in technologies for commercialization and secure data exchange.
“While true, there is some hype around AI intrusion into the crypto space. We are seeing the emergence of innovative and compelling use cases.” expressed optimism Frontier founder Ravindra Kumar.
Dragonfly venture fund managing partner Hasib Qureshi also full of hope. He is convinced that artificial intelligence and cryptocurrencies will become more closely interconnected over time, and that it is time to “fasten your seat belts”.
AI and crypto will be intertwined in a way that will become more clear over the next decade.
For now, buckle in.
The future is going to get weird.
— Haseeb ＞|＜ (@hosseeb) January 9, 2023
However, not all members of the crypto community are inspired by the new trend – many are skeptical about most AI tokens.
“I’m sure the current trend is still quite speculative. It led to a jump in prices for tokens like OCEAN, ALI, AGIX,” noted head of marketing at Biconomy Aditya Handuri.
According to him, some of these crypto assets are “devoid of real technology”, and there are many unresolved problems in the segment itself.
“Suppose an AI tool attracts 250 million users. Then what will its infrastructure look like? How will people use it? How will the training take place? [интерпретации данных]? Where can the token be used?” Khanduri asks.
Many people are completely apprehensive about what is happening.
“Once the market starts to bounce back a little, new trends come out of nowhere. And not all of them are as convincing as we would like, ”- noted financial market consultant Valentina Drofa in a conversation with CoinDesk.
In her opinion, there is a risk that the trend may actually turn out to be “empty hype” – many speculators will use newfangled coins for short-term schemes like Pump & Dump.
“An entire industry will face the long-term consequences of another blow to its image. Such cycles become quite tedious and sad, they are observed again and again, ”Drofa shared her forecast.
Fantom Foundation co-founder Andre Cronje has a negative opinion about the new trend. He believes that AI and blockchain cannot complement each other.
Please stop asking Fantom about AI.
AI and Blockchains don’t mix.
— Andre Cronje (@AndreCronjeTech) February 8, 2023
Bankless podcast host David Hoffman is of a similar opinion.
Let’s make something clear
There is no material integration between AI and Crypto.
You cannot put AI ‘into a blockchain’.
AI tokens are meme tokens.
— DavidHoffman.bedrock 🏴🦇🔊🔴_🔴 (@TrustlessState) February 8, 2023
“There is no significant integration between artificial intelligence and cryptocurrencies. You cannot put artificial intelligence “on the blockchain”. AI tokens are meme tokens,” he stressed.
Former CEO of Securitize Capital Wilfred Dai directly tied up the current hype around new coins with the hype around ChatGPT.
“This phenomenon can continue as long as such sentiments persist,” he said.
Founder of the CryptoSavingExpert project under the nickname That Martini Guy thinksthat most AI-related projects in the crypto industry are “useless garbage.”
“Speculators will leave when the hype subsides and prices fall. If you made money, take profits,” he wrote.
Regulatory uncertainty around the cryptocurrency market can serve as a significant obstacle to the development of a new trend. In addition, some AI projects may be too complex for many community members.
Recently, the US Federal Trade Commission urged entrepreneurs to “keep AI claims under control.”
According to the agency, in the description of the company’s products, the phrase “powered by artificial intelligence” and other variations of it are often used unreasonably.
“One thing is certain: it’s a marketing term. […] Some advertisers will not be able to resist overusing and abusing them,” the commission said.
The department warned that such claims could be considered “false or unsubstantiated.”
conclusions
In a short time, the capitalization of the AI tokens segment has crossed the threshold of $1 billion, which is quite significant. On the wave of hype, even half-forgotten coins rose from the ashes.
New Segment Responds Sensitively to Broader Market – Newfangled Token Price Correction well visible against the backdrop of Bitcoin balancing around the important $20,000 level and problems with the USDC stablecoin due to the Silicon Valley Bank closed by the US authorities.
You can imagine quite a few use cases related to blockchain and artificial intelligence. For example: secure and confidential exchange of tokens between various smart devices, monetization of algorithms, generation of images for NFT or creation of strategies for trading on non-custodial platforms.
However, it is better for investors to remain prudent, realizing that many AI tokens lack fundamental value, are fueled by marketing efforts, and do not bring anything particularly innovative to the industry.
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