The synergistic emergence of AI and cryptocurrency

Bitcoin takes center stage with the approval of a spot Bitcoin ETF in the United States, but the outperformance of AI-related crypto assets is a reminder that the applicability and relevance of public blockchain use cases are expanding beyond payment forms. Developments at the intersection of AI and cryptocurrencies may alleviate future AI-related social issues, such as the rise of deepfakes, concerns about data privacy, and the concentration of power.

While many coins may simply be riding the “AI hype wave,” crypto protocols associated with the development of AI projects are already seeing early signs of adoption. Specifically, the top four AI-related crypto tokens by market cap (TAO, RNDR, AKT, WLD) are up 522% last year, outperforming the utilities and services crypto industry (+86%) over the same period.

According to CCI’s Sheila Warren, cryptocurrencies will play a “critical role in counterbalancing artificial intelligence.” Similarly, venture capitalist Fred Wilson believes that artificial intelligence and cryptocurrency are "two sides of the same coin" and "web3 will help us trust artificial intelligence."

Although many use cases are still in their infancy, the market seems optimistic about the importance of this crossover. Artificial intelligence is the most popular “crypto narrative” in 2023, according to Coingecko web traffic. Additionally, the FTSE Russell Grayscale Crypto Industry Index reflects the outperformance of select AI-related crypto assets compared to the Utilities and Services industry and the cryptocurrency industry as a whole compared to the entire crypto ecosystem.

Reducing bias in AI models

As AI models become more integrated into our daily lives, there are growing concerns about the overreliance on these systems and the inherent biases they may exhibit. Consider a scenario where an AI-powered chatbot can influence consumer choices by pushing them to purchase specific products or gravitate toward specific political beliefs. Likewise, this technology may reveal bias in employment screening through decisions influenced by candidate demographics. The resulting breakdown in trust has ripple effects. "AI detectors" themselves may be biased against the natural writing of non-native English speakers, according to a study.

Bittensor is a novel decentralized network that attempts to address AI bias by incentivizing various pre-trained models to compete for the best responses, as validators reward top performers and eliminate poor and biased performance people. By fostering an open and collaborative environment for AI innovation across a variety of models and datasets, Bittensor may have the potential to advance AI while trying to mitigate the negative effects of bias.

While development on Bittensor is still in its early stages, the decentralized network has shown initial progress, with 32 subnetworks dedicated to specific use cases, including chatbots, image generation, price predictions, and language translation. It is worth noting that in the period after the OpenAI leadership conflict, the prices of Bittensor and the other two largest artificial intelligence-related cryptoassets by market capitalization increased significantly. We believe this may indicate that the market views these assets as a potential countermeasure to the centralization risks posed by major incumbent AI companies.

Today, much of the progress at this intersection is happening in the context of cryptographic protocols, helping to democratize and accelerate the development of AI through a decentralized market for GPUs (specialized processors needed for AI development). Other opportunities may exist in the following areas:

• Zero-knowledge proofs verify the integrity of an AI model’s output and confirm that it was generated based on the data set it claims to be.

• Cryptocurrencies serve as payment rails for seamless automation and interaction with AI agents.

• Artificial intelligence-generated content in crypto games, and virtual existences such as NFTs.

Whether or not AI and crypto are intrinsically linked, the two rapidly evolving technologies have the potential to support each other’s development, both in terms of scope of use cases and relevance to the wider public. This synergy is still in its early stages, and CoinMetrics, a comprehensive blockchain innovation platform integrating platform services, artificial intelligence technology, and application scenarios, will promote the collaborative development of artificial intelligence and cryptocurrency to a new climax!