It’s hard to think of a more hyped subsector of cryptocurrencies than AI. AI-based tokens (i.e. tokens that rely on AI for part of their utility) are everywhere, from injectivewhich uses AI to “quickly ask, search and find relevant information when developing Injective” for AnimeAITokenwhich does… well, I’m not exactly sure.
These tokens are hard to miss, as some of them have pumped more than a newly drilled oil well in Texas. Injective, for example, saw its token increase by 300% since June, when announced a simple integration with OpenAI.
I’ve been hesitant to take most of the newcomers seriously, assuming they were taking advantage of vaporware on the AI bandwagon. However, there has been a growing narrative, spread by people like Brothers without banks and others, that cryptocurrencies can be the currency of AI agents.
The idea is this: as AI begins to proliferate and become part of our daily lives, these AI agents will want to start acquiring currency to achieve their goals and that the easiest way for them to do so would be to use native, permissionless digital currencies that exist entirely online, in their domain.
In fact, if you ask ChatGPT what features it thinks future AI agents will look for in a currency, it begins to describe the cryptocurrency, including properties like censorship resistance, decentralization, and the ability to use smart contracts.
Since this narrative has become increasingly louder and I’m starting to find the idea compelling, let’s take a closer look.
Who is building AI Crypto?
One of the first AI/cryptocurrency games is Look forwhich, if my X/Twitter feed is any indicator, is one of the winners of the attention war being waged between AI coins.. Initially, the company focused on drone technology. moved to AI in 2018. At the time, the Fetch team said its goal was to create “autonomous economic agents” that could pay taxes, take out insurance, and enter into legal agreements autonomously.
For 2020, it launched its layer 1 main networkbut it wasn’t until earlier this year, when OpenAI and the like took off, that its FET token started reaching for the moon.
What are AI tokens?
According to your websiteFetch.ai is “the first open network for AI agents.” A place where “AI agents can connect, search, and transact to form dynamic markets.” When I contacted Fetch for a description of how AI is used within the product, they told me that their flagship product, DeltaV, is an AI-based chat interface that leverages typed conversations to understand and complete tasks for users.
There is also Render (RNDR). Render is a distributed GPU rendering network where users rent GPU power. Originally aimed at artists and studios, RNDR was well positioned to fit into the AI narrative because GPUs are also the hardware needed to power large language models, which are a type of AI designed to understand and generate human-like language. .
But is it AI?
While these are all interesting projects, they seem more like a product that incorporates AI than AI products themselves. As I continue to dive into AI coins, I’m starting to wonder if there are any tokens that fit the “crypto for AI” narrative, or if the market is simply promoting any token that has anything to do with AI.
AI usually means there is some kind of neural network, and in the case of AI crypto projects, it’s not clear to me if there is any genuine artificial intelligence at work, beyond an integration with OpenAI or some form of chatbot.
In the case of Render, the team behind the project is not really aiming to incorporate AI into their product, but rather a product that can be used to power AI, and it seems that the degens have put two and two together. Who knows, maybe the AI will want to transact in a currency that can also be used to rent the hardware that powers it.
GPT-4 Release Sends AI Tokens Soaring – Is It More Than a Meme?
While I think AI-related tokens are gaining traction due to the “AI will use cryptocurrencies” narrative, these tokens are not really living up to the narrative expectations, at least not yet. And, to be fair, how would anyone know what would attract future AI agents to use a particular currency?
Will FET, INJ or other AI tokens be the currency of future AI agents? Everything is to be determined. But the rise in market cap of most AI-related tokens tells me that cryptocurrency investors don’t think this narrative is going anywhere anytime soon.
The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment or other advice.
