One of the technological and financial trends of the year is the integration of artificial intelligence (AI) with the cryptocurrency sector.
According to investment firm a16z crypto, “the crossover between AI and cryptocurrency is set to strengthen in the coming years.”
This is highlighted by a company reportwhich notes that AI is not only transforming technology in general, but is leaving its mark in the world of cryptocurrencies.
One of the most striking points of the a16z crypto report is that there is “a large overlap between visitors to chatgpt.com and major cryptocurrency websites.” This data suggests that cryptocurrency users have a strong connection with AI.
But not only users are connected; Cryptocurrency developers are also taking advantage of artificial intelligence significantly.
According to a16z, approximately a third of cryptocurrency projects (34%) say they are using AI, regardless of the category they are developing in, as seen in the graph below.
The most popular category in which this technology is applied is the cryptocurrency network infrastructurewhich highlights the importance of AI in fundamental aspects for that sector.
Cryptocurrencies with artificial intelligence are platforms or networks that integrate AI technology to improve their functions and offer innovative solutions. Unlike traditional cryptocurrency networks, they use advanced algorithms to analyze data, predict trends, and optimize transactions autonomously.
Besides, can improve security by detecting suspicious activity and fraud protection.
Centralization and decentralization: a technological dilemma
As demand for cutting-edge AI models grows, so do the associated costs.
These costs have quadrupled per year over the last decade, leading to a16z crypto to warn about a potential risk of centralization in AI.
«We believe that AI could trend towards greater centralization of power on the Internet. “If left unchecked, only the largest tech companies would have the resources to train the latest models.”
a16z, investment company.
This centralization challenge is in direct contrast to the opportunities offered by cryptocurrency networks, which advocate decentralization and transparency.
Criptonoticias reported that Grayscale, another recognized firm in the world of cryptocurrencies, has also issued warnings about the danger of extreme centralization of AIpointing out the potential lack of transparency and potential abuse of power.
In this sense, cryptocurrency networks, with their properties of decentralization and transparency, offer possible solutions to these problems, says the company.
Furthermore, he highlights that decentralized AI can “democratize access to investment.”
At the moment, this access is limited to a small portion of venture capitalists and accredited investors.
Several projects based on digital assets are facing these problems, says a16z. These include Gensyn, which seeks to democratize access to AI computing, Story, which tracks intellectual property to compensate creators, Near, which runs AI on open protocols owned by users, and Starling Labs, which verifies authenticity. of digital media.
AI-powered cryptocurrency investments
The relationship between AI and cryptocurrencies is still in an early phase of development, but a report Galaxy Digital’s recent report details that AI projects are one of the top five sectors that venture capital firms focus on.
In Q3 2024, the majority of investment capital went to Layer 1, enterprise blockchains, and decentralized finance, as seen in the chart below.
Most of these AI investments are in seed and early-stage funding rounds.
This indicates that the fusion between AI and cryptocurrencies is just beginning and its growth promises more robust development in the near future.
The union of the cryptocurrency industry and companies dedicated to the development of artificial intelligence could add 20 billion dollars to global GDP by 2030, according to Bitwise senior cryptocurrency research analyst Juan León.
Bitcoin mining and its convergence with AI
Artificial intelligence has revealed its versatility by having a connection with Bitcoin mining.
This is generated by the growing demand for computing power to train and power AI modelswhich is reshaping the Bitcoin mining landscape.
Data centers for AI need a lot of power just like Bitcoin mining centers. Having that in common, AI companies partner with Bitcoin miners to use their facilities already existing.
That is, use all the infrastructure, networks, labor and cooling of Bitcoin mining to reconvert them with AI servers. This brings benefits to both industries.
Market Rewards Bitcoin Mining That Joins AI
The companies that have known how to take advantage of their infrastructures to enter the world of AI are being rewarded with a higher market valuation.
Shares of three BTC mining companies pioneering the transition to AI have benefited, as seen in the chart below published by VanEck Head of Digital Asset Research Matthew Sigel.
This is Core Scientific (CORZ) which sealed an alliance with AI cloud provider CoreWeave in June this year and grew in the market by 254%. Other companies such as Tera Wulf (WULF) increased their value by 83% and Iris Energy (IREN) with 23%, during the last 12 months.
On the other hand, in that same period, the shares of BTC mining companies that have not yet announced or mobilized their insertion into the AI industry have been in decline.
One of those is Marathon Digital Holdings (MARA), the largest Bitcoin mining company in the world, since its shares on the stock market have fallen 37% since last Juneas shown in the graph TradingView.
This whole scenario positions both industries as key drivers of global growthas long as a balance is achieved between decentralization and technological innovation.
The relationship between AI and cryptocurrencies It seems that it is not only here to stay, but will continue to evolve in the coming yearswith economic and technological implications that could redefine the future of the internet and finance.
