Will artificial intelligence (AI) combined with blockchain bring real breakthroughs or just slang for projects to approach the trend?
Main idea
In the information technology age, most of the key industries with huge value are developed around data, including:
The Intersection of AI and Blockchain
AI is essentially about having a lot of data and processing that data efficiently, so where does that data come from and can we verify that the data is correct and safe? The above question is one of the most discussed topics about the impact of AI on life.
Blockchain is essentially a verified memory of data. Therefore, AI applications will be great if they can take advantage of the strengths of blockchain to create reliable and secure results.
It should be noted that the data economy is a huge market, any keyword such as AI, Machine Learning, Cloud Computing, Big Data… is a field that requires a large amount of human resources and financial resources to develop and research. Their applications are also very diverse as we have seen and are seeing today. In the following section, we will learn about the products being developed at the intersection of AI and Blockchain.
AI is considered the keyword of the decade and a major trend in the world. The rapid development of typical applications such as ChatGPT has created momentum for the development of AI projects or AI applications in work and production processes. Investment capital in the AI field has grown strongly accordingly.
Similar to the crypto market, investment capital is also gradually pouring into AI projects. AI tokens or projects announcing that they will integrate AI into their products have had impressive growth in the past year.
As a young market, crypto lags behind the traditional market as investment flows only become significant from 2023. By the end of 2023, $298 million had been invested in AI projects in crypto. Although the figure is modest compared to other branches, it is relatively positive considering the age of the project team.
Investment flows into AI projects in crypto are distributed across many different sectors, with most large investments concentrated in 2023 and 2024. Projects invested before 2023 mainly add AI applications to their products to capture the trend. Projects invested from 2023 tend to develop with AI as the core in addition to AI-integrated products.
With the explosion of AI, the number of projects developed around this keyword has grown rapidly, especially in the past year. Although there are many diverse applications, we can divide AI projects in crypto into 4 main groups:
The Tools & Apps branch has brought a breath of fresh air to the crypto market with a large number of projects with a variety of products from games, tools, virtual characters to ways to apply AI to products to enhance user experience.
The projects that received the most investment are mainly in the game, tools and virtual characters branches. Current AI game projects do not have products yet, while current virtual tools or characters have projects with products.
However, products in the virtual tools or characters branch have a model quite similar to traditional products. If the current development direction is maintained, the above projects will depend a lot on economic factors or in other words, focus on how to apply tokens in the project to compete with traditional products.
Some notable projects in the Tools & Apps branch include:
The Interface & Marketplaces branch has a relatively small number of products, the reason is that the products related to the AI field in crypto are still in the testing phase and have not found a breakthrough model to attract users. The projects in this branch also do not have any outstanding projects. There are a few names that have been developing for a long time, such as Ocean Protocol, which have now shifted to focus more on AI.
Infrastructure & Protocols is a branch with many breakthroughs in terms of products. Blockchain and AI are complementary in nature, so developing related infrastructure solutions will help promote the above integration process.
For example, projects like Fetch.ai, 0xScope provide frameworks to help projects develop better AI-related products. Io.net provides GPU computing power for AI projects.
There have been a number of projects launching products, however, due to the short time, the market has not yet seen the effectiveness of infrastructure projects.
Some notable projects in the Tools & Apps branch include:
Developing an ecosystem not only requires platform development but also requires the development of the above products. It is quite understandable that with a low-life branch like AI in crypto, creating an ecosystem that attracts value is very difficult.
The recent prominent name in the Blockchain & Ecosystems group is Bittensor , Bittensor is a layer 1 blockchain specializing in AI data storage. According to Bittensor, most of the AI data of businesses like OpenAI, Google... cannot be shared outside. In case a business wants to build AI, they need to invest a lot of initial resources. Therefore, Bittensor's purpose is to take advantage of the transparency and data sharing capabilities of blockchain, to support businesses to easily develop AI.
It can be seen that Bittensor's vision is very consistent with the intersection of the nature of AI and blockchain as presented above. That is also the reason why the project has received much attention and grown well in recent times.
However, Bittensor in particular and other ecosystems in general are still young and have not attracted developers and projects for the ecosystem.
Not just a short-term trend in the crypto market, AI has had many quality projects that have really developed around this topic. In fact, with the emergence of many new projects, increasing investment capital and diverse development models, AI is a branch with a fast growth rate when compared to other branches in the crypto market. However, along with that rapid development, besides the opportunities, there are also many challenges for development projects and investors.
AI projects in the crypto market are still quite young, although diverse, most are at the experimental level to find out market demand. Current products, apart from economic factors, most do not have outstanding features compared to traditional projects.
Note that focusing on the economic factor is not wrong, if you know how to apply it, projects with AI elements in crypto can completely succeed similar to what Axie Infinity did with the game segment in crypto.
Projects that know how to leverage the strengths of AI and blockchain need more time to prove their effectiveness and attract developers and value to the ecosystem.
Applying AI to optimize costs and enhance user experience
Developers with strengths in other areas can absolutely apply AI to reduce development time and optimize costs instead of just focusing on developing AI-centric products.
Applications that help optimize development time include:
On the user and investor side, knowing AI tools helps find opportunities faster and better than those who don't.
An example is the NFT value assessment tool in a Nansen collection . Users using the tool can see which NFTs are undervalued to buy.
Create products that leverage the strengths of AI and Blockchain/crypto
Blockchain technology and the use of tokens as a driving force have a big impact on the operating model of AI projects in the crypto market.
For example:
Each successful app can attract a huge amount of value as we have seen in the Depin , Game and many other branches in the past.
With the emergence of many new projects, increasing investment capital and diverse development models, AI is a branch with a fast growth rate when compared to other branches in the crypto market. This is an area that investors and projects should pay attention to, especially in the context that AI is considered a clear trend in the world
