Key facts: “We are still in the early stages of this intersection,” Grayscale says. The firm launched an AI cryptocurrency investment fund. Artificial intelligence (AI) is one of the emerging technologies that has been conjugated with cryptocurrency networks in recent times, with the potential to support each other in their growth. As AI technology is becoming more and more powerful, this industry has become extremely centralized“concentrating power in the hands of a few companies.” This has raised concerns about the potential for abuse of power and lack of transparency, says a report by Grayscale, a digital asset investment management firm. Cryptocurrencies, with their properties of decentralization and transparency, offer possible solutions to these problemsBy using cryptocurrency networks, AI can be decentralized and democratized, allowing more people to participate in its development and governance.
We believe this could help improve innovation and competition in AI in general, as well as provide a balance with models developed by tech giants Grayscale, a digital asset management company.
Grayscale’s report highlights that decentralized AI can “democratize access to investment.” Currently, this access is limited to a small portion of venture capitalists and accredited investors. In contrast, AI-based cryptocurrencies, available to everyone, allow anyone to access and develop AI, it suggests. The combination of cryptocurrencies and AI is still in its early stages. Despite this, the market has responded positively. From the beginning of 2024 to May, the AI-related cryptoasset universe has seen a 20% return. This can be seen in the following graph.
The AI universe has outperformed almost all crypto sectors so far this year. Source: Grayscale. Additionally, AI occupies a large part of the current narrative, outperforming other areas such as decentralized finance (DeFi), Layer 2s, and real-world assets (RWA).
Which AI cryptocurrencies stand out?
Grayscale classifies the intersection of cryptocurrencies and AI into three subcategories. The first is the category related to infrastructure layers. This includes networks that offer platforms for AI development, such as NEAR, TAO, and FET. These They provide an open and permissionless architecture specifically designed for the general development of AI services. Among the notable cryptocurrencies is Near, founded by the co-creator of the “Transformer” architecture, which powers AI systems like ChatGPT. The Transformer architecture is a tool for natural language processing (NLP) that has revolutionized tasks such as machine translation, text summarization, and question answering. The second category focuses on the resources needed for AI, including assets that provide the critical resources necessary for development such as computing, storage, and data. With the rise of AI, there has been a demand for computing resources in the form of graphics processing units (GPUs). GPUs are designed to process large amounts of data in parallel, making them ideal for tasks such as rendering 3D graphics, applying image filters, and processing video.
Graphics processing unit (GPU). Source: hodim/ stock.adobe.com Specifically, cryptoassets such as Render (RNDR), Akash (AKT) and Livepeer (LPT) Offering access to idle GPU supply to developers in need of computational resources to perform multiple functions. The third category covers assets that attempt to solve AI-related problemssuch as the rise of bots, deepfakes, and model verification. Deepfakes are fake digital content, typically video or audio, that use artificial intelligence and deep learning to create highly realistic images and sounds of people that look authentic. Digital assets such as worldcoin (WLD)) seek to solve problems related to deepfakes by establishing verifiable provenance of content. Worldcoin also attempts to solve the bot problem by proving a person's humanity through unique biometric identifiers. Worldcoin is an identity verification protocol through scanning biometric data. Those who voluntarily submit to an iris scan They are periodically given a “basic income” paid in the WLD tokenThis protocol has been surrounded by controversy and criticism, mainly related to the privacy and security of biometric data.
AI is part of the future and Grayscale is diving into it
Grayscale says AI is poised to have a profound impact, both positive and negative. The firm believes these AI-related cryptocurrency use cases will become increasingly important. That's why the firm, which already has a U.S.-based bitcoin spot ETF, announced the launch of a new fund focused on artificial intelligence decentralized, as reported by BitcoinDynamic. The Grayscale Decentralized AI Fund seeks to provide investors with Exposure to AI industry protocols within the crypto ecosystem. Crypto asset allocations will be rebalanced quarterly according to those deemed to have the most potential. Currently, it includes exposure to Near (NEAR), Filecoin (FIL), Render (RNDR), Livepeer (LPT), and Bittensor (TAO).