The AI growth has had a significant impact on the bitcoin sector as coins associated with AI-focused crypto projects have climbed alongside tech shares such as Nvidia (NVDA.O), driven by strong investor demand for applications such as machine learning.
Coins related to AI-focused crypto projects have risen with tech equities such as Nvidia (NVDA.O), driven by voracious investor demand for applications such as machine learning.
The artificial intelligence boom has impacted the cryptocurrency industry dramatically. Over the last year, the rise of numerous AI crypto tokens has exceeded that of bitcoin, the world’s largest cryptocurrency, which has reached record highs.
According to CoinGecko data, their aggregate market value has risen from $2.7 billion in April to $26.4 billion today. Tokens related to these projects have increased by 145% to 297% in the last 30 days.
If the more optimistic industry projections come true, there may be more potential for growth, as some market experts believe crypto and blockchain technology can help alleviate some of the AI sector’s early difficulties, such as privacy and the need for computing capacity.
“As both AI systems and blockchain networks grow, we will see more and more use cases that combine the two industries,” said Markus Levin, co-founder of blockchain data storage business XYO Network.
The CoinDesk Indices Computing Index, which includes AI-linked tokens, has risen by more than 165% in the last year, beating even bitcoin’s 151% increase to record levels.
According to Kaiko Research data, trading volumes in AI tokens have surged dramatically this year, reaching an all-time high of $3.8.
“There is a significant chance that… AI applications will be crypto’s raison d’être,” fund manager VanEck’s Matthew Sigel and Patrick Bush wrote.
Some of the biggest blockchain projects right now include the Render Network, a blockchain platform for peer-to-peer sharing of AI-generated images; Fetch.AI, a platform for developing AI apps; and SingularityNET, an AI services marketplace.
“Investors are starting to realize that if you want real value, you need products that are uncorrelated to the crypto market,” said Ahmad Shadid, CEO of AI-focused blockchain firm io.net.
AI-linked blockchain goods encompass a wide range of services such as payments, trading models, machine-generated non-fungible tokens, and blockchain-based AI application marketplaces in which customers pay developers in bitcoin.
According to VanEck, revenue from AI crypto projects might reach $10.2 billion by 2030 in the base case and more than $51 billion in the bullish scenario.
VanEck identified the usage of cryptocurrency tokens as rewards, the building of physical processing infrastructure, data verification, and transparency in establishing digital ownership as key areas where blockchain technology adds real-world value to AI development.
Offering crypto tokens as incentives enables rapid scalability, according to Io’s Shadid. His company intends to introduce a token later this year.
“The reason we can scale fast is because of the token we have coming out,” he said. “The token incentivizes owners of physical infrastructure to bring their computers onto our network,” he said.
However, with the AI boom, predicting winners and losers could be dangerous.
“We’re still in the very early stages of AI networks integrating with blockchain-based networks, and the utility of a lot of tokens is still very uncertain,” he said.
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