Analysts are predicting a substantial surge in the AI-related cryptocurrency sector in 2024, driven by the convergence of innovations stemming from both artificial intelligence and web3 technologies. This convergence is expected to bring about significant advancements and opportunities in the cryptocurrency space, with the potential to reshape the industry as we know it.
AI agents on the blockchain and a new frontier
One of the key areas of focus within this emerging trend is the development of AI agents, which combine elements of AI and web3. These on-chain bots are envisioned to play a pivotal role in processing transactions and facilitating value exchange on behalf of human users. Sandra Leow, an analyst at Nansen, highlighted the possibility of AI agents becoming a primary category of users on the blockchain, citing verification management applications as one example that leverages zero-knowledge learning technologies like Modulus Labs.
Unlocking the potential in the symbiosis of AI and Web3
According to Gemini’s 2024 Crypto Trend Report, the integration of AI and web3 holds immense potential in enhancing privacy, data ownership, and identifying human-generated content. This integration is also expected to provide a decentralized alternative to large-scale cloud development. The report emphasizes the symbiotic relationship between AI and blockchain, as it mitigates the weaknesses of centralized AI and ensures a safe, holistic evolution that serves humanity’s interests.
Gemini analysts further highlight the significance of web3 innovations, particularly zero-knowledge proofs, in enabling privacy-enhanced machine learning. The report envisions AI as a tool that can transcend its niche status, becoming an everyday asset for equitable and democratic participation across technology and finance sectors.
Guarding against deep fakes in provenance tracking and attestations
As generative AI becomes increasingly sophisticated, the rise of deep fakes poses a significant challenge. Distinguishing between content generated by humans and AI becomes critical. In response, there is a growing interest in projects focused on provenance tracking and digital content attributions. Serotonin CEO Amanda Cassatt noted that relying on on-chain attestations for verification will become the norm, as AI’s ability to generate content surpasses human capacity.
London Real Ventures CEO Brian Rose anticipates a substantial increase in AI-generated metaverse and web3 gaming content in 2024. Generative AI is expected to play a pivotal role in shaping this digital frontier. Rose’s venture capital firm has already invested in over 20 metaverse-based startups, many of which heavily feature strong AI components. The merging of AI and web3 is poised to revolutionize the gaming industry, potentially onboarding a billion users onto the blockchain.
Strong performance of AI project tokens
AI project tokens have displayed remarkable resilience, even during bear markets. Analyst Sandra Leow pointed out that AI project tokens experienced strong outperformance as early as the beginning of 2023. This trend underscores the growing belief and momentum in the convergence of AI and blockchain technologies. Cryptocurrencies associated with recent AI developments have posted impressive triple-digit gains throughout 2023.
One notable example is FET, the native cryptocurrency of Fetch.ai, which has gained over 590% in the past year. Fetch.ai focuses on automating business tasks, particularly in data processing and trading, leveraging AI and machine learning. Another standout is Render, a platform enabling artists to access computing power for rendering generative AI artwork. RNDR, Render’s native cryptocurrency, has witnessed an impressive 870% gain in the past year.
While the collaboration between AI and web3 promises a new era of digital innovation, it’s important to note that the market capitalization of tokens associated with this subsector is still relatively small compared to major digital assets. However, the exceptional performance of AI-related tokens suggests that investors are increasingly anticipating the transformative potential of the convergence of AI and blockchain technologies for the entire industry.
2024 is shaping up to be a pivotal year for the AI-related cryptocurrency sector. The synergy between AI and web3 technologies is unlocking new possibilities and applications, from AI agents on the blockchain to enhanced privacy and data ownership. As the market continues to evolve, AI-related tokens are gaining momentum, offering investors a glimpse into the future of blockchain and artificial intelligence integration. The merge of AI and web3 is poised to usher in a new era of digital innovation, with profound implications for technology, finance, gaming, and more.
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