Artificial intelligence is rapidly developing. AI tools are commonly used in the household now. More and more people are calling upon AI to automate mundane tasks and quickly synthesize data or conduct analysis, and AI's relationship with blockchain technology is fledgling, but very real.
The rapid development of artificial intelligence has demonstrated the power that current technology has to improve life and help people, and it has shown no sign of slowing down.
It is no surprise then, that we're starting to see the intertwining of crypto and AI . As if it didn't already evolve fast enough, the crypto space is once again changing.
To better understand what the implications are for a future where AI and blockchain technology are interconnected and how AI is used in crypto, we need to understand where we are today, what sort of tools, mechanisms, and technology are currently in development, and what the future of the crypto space might look like when crypto and AI are more interconnected then they are today.
In this post, we will take a look at some of the current crypto AI coins on the market, discuss some of the more common AI solutions being used for general information, product development, and productivity like ChatGPT, and talk about some of the AI tools that have been developed specifically for crypto.
Crypto and AI Contents
Since we'll be covering a lot of material, we've broken the page down into sections corresponding to crypto AI topics of interest. Feel free to jump head to any of the crypto and AI topics below.
What Crypto is Involved with AI
Several Crypto AI tokens have been on the market for some time. Most of these projects have been in steady development, but as Artificial Intelligence technology continues to improve, the backbones of these Crypto AI ecosystems will continue to improve as well. Let's take a look at a few of the more popular tokens and talk a little about what each of them does.
The Graph
The Graph is an ecosystem designed to optimize complex blockchain data for indexing, filtering, and readability. This is accomplished by implementing mechanisms designed to map data to develop clear relationships. The way in which The Graph accomplishes this is quite complex since it must read blockchain bytecode data and map the relationship between that data and another non-trivial piece of data.
To the lay person, this might sound horrendously complex, but in simpler terms, it's a lot like a family tree. Suppose a person meets another person who claims to be their fourth cousin. The two of them talk about their parents, aunts, uncles, grandparents, great aunts and uncles, etc. until they determine the root relationship that establishes their familial connection. Since blockchain data is, by nature, complex and computationally expensive, clearly defining these relationships natively on chain is not efficient. That's where The Graph comes in.
The Graph learns what and how to index Ethereum data based on subgraph descriptions, known as the subgraph manifest. The subgraph description defines the smart contracts of interest for a subgraph, the events in those contracts to pay attention to, and how to map event data to data that The Graph will store in its database.
Since many of the analytical tools in development for crypto trading and NFTs relies on the ability to quickly, effectively, and sensibly query blockchain data for analysis, the demand for good blockchain data will not likely slow down. At the time of writing, The Graph, or $GRT is trading at $0.1114 with a market cap of $1.015 Billion.
Injective
Injective protocol aims to improve the landscape of decentralized finance. The Injective blockchain claims to be the "fastest blockchain built for finance" and touts a library of plug-and-play web3 modules reducing shoddy and error-prone smart contracts that come from traditional development. Granted, many smart contract developers are highly capable and write remarkable code, but the level of skill required to code a secure, reliable smart contract from scratch creates a substantial barrier to entry for any would-be web3 dApp developer.
The Injective mainnet launched in November of 2021. While it is unclear how, precisely, Injective leverages AI in its ecosystem, Staking Rewards talks about how Injective solves liquidity issues through a process called liquidity aggregation. In traditional DeFi, a smart contract manages a liquidity pool, where one token is paired with another token, like $ETH and $USDT for example. As more $USDT enters the pool and more $ETH leaves, the price of $ETH goes up, conversely, if there is an outflow of $USDT, and an inflow of $ETH, the prices goes down. This is an oversimplification, but basically how it works.
A major 'problem' with DeFi is that there are multiple liquidity pools, and the ratio of the token pair can vary from pool to pool, meaning the price of an asset between several different liquidity pools can vary. This gets more complex when the asset is traded on multiple blockchains, so now there are exponentially more pools across exponentially more ecosystems.
To try and solve these liquidity issues, DEX liquidity aggregators were created. These aggregators pool together the liquidity of multiple exchanges and run their orders from a central combined order book.
The aggregation of this liquidity may involve or implement AI, but whether that is the case is unclear. CoinMarketCap has Injective Protocol listed in the AI category, but how Injective uses or leverages AI in its ecosystem is not well-defined or documented on its website. At the time of writing, $INJ is trading at $7.97 with a market cap of $667.8 million.
Render
Render provides utility through decentralized GPU rendering. The idea behind this is simple: computational power is limited. An individual can use a graphics card on their machine to make better resolution on their pc games, or leverage the power of GPU computing for machine learning. This is not necessarily feasible or accessible to everyone, but a decentralized network of GPU computing makes this possible.
Use-cases for $RNDR range from providing decentralized GPU rendering solutions for massive and detailed online games to relieve the user of the processing burden to providing computing power for machine learning and AI applications. Render allows people with idle GPUs to delegate that computing power to people that need it and receive an incentive for doing so.
Render believes this provision of utility is greater than that of proof of work blockchain consensus models that often use many GPUs to validate on the network mine cryptocurrency. They believe the use of the GPU computing power for development, gaming, and art is more valuable than mining.
Decentralized GPU resources are wasted in ‘proof of work’ cryptocurrency mining. Render unlocks the full productive potential of decentralized GPU computing to power next generation 3D content creation and artificial intelligence.
The democratization and decentralization of GPU computing power has the potential to create a more accessible development landscape for people who may not have the resources to buy or house a computer with a sufficient graphics card, or for others who need a lot of processing for a short amount of time where it may be too cost-prohibitive to invest in a machine capable of handling the task, and Render makes this possible. At the time of writing, $RNDR is trading at $1.79 with a market cap of $661.8 million.
Fetch.Ai
The Fetch.AI ecosystem provides resources for building infrastructure for autonomous web3 systems and services. Like some of the other crypto AI ecosystems we've discussed previously, the Fetch makes data processing on the blockchain easier and more accessible.
$FET is the utility token of the Fetch ecosystem and it is used to pay for the services it provides. According to the website, Fetch has three different ecosystems: the application ecosystem, the platform ecosystem, and the developer ecosystem, each with a different use case and potential user base.
Fetch leverages a multi-agent AI system to automate blockchain processes for commercial use cases such as supply chain and finance. There are several pieces of technology currently powered by Fetch like Axim, CoLearn, and Resonate. While there are several others, the real-world technical use cases for Fetch's technology are growing as more technological infrastructure starts to integrate AI into its stack.
As an autonomous machine-to-machine ecosystem, Fetch.ai’s agents work as a network of independent parties and interact with each other directly via the blockchain network.
Fetch currently has a staking mechanism to validate the network which was built on the Cosmos ecosystem. This mechanism provides an incentive for validators to continue to participate in the Fetch ecosystem and ensures the network continues to stay up. At the time of writing, $FET is trading at $.21 with a market cap of $172.7 million.
Numeraire
Last on our list is Numeraire. Numeraire is interesting because it isn't, in and of itself, an AI product. Rather, Numeraire is a token backed by a repository of machine learning algorithms designed to try and predict the movement of the stock market. It's a platform where developers with the best machine-learning algorithms can stake their models to earn $NMR.
What's interesting about Numerai is that they've leveraged the power of open-source as a revenue-generating model. This not only allows investors to capitalize on the power of Numerai's machine-learning models to leverage in their own trading (since example scripts are available to download) but also affords developers an opportunity to earn through coding by staking their models.
Numerai also makes its ecosystem fun and interesting by introducing a competitive aspect by incorporating a leaderboard showing various players and the returns afforded by their trading scripts.
Numerai has gathered the best data scientists in the world and let them build machine learning models on the highest quality stock market data. The result is a next-generation hedge fund which is outperforming market neutral indexes and traditional quant funds.
The most interesting aspect of the Numerai ecosystem is what happens to the machine learning algorithms submitted by users. These algorithms are fed into Numerai's "meta model" that uses the collection of all the smaller machine learning algorithms to learn and refine its ability to better "predict" the stock market and provide consistent returns through its hedge fund.
At the time of writing, $NMR is trading at $13.09 with a market cap of just over $82 million. However, if this model can consistently and sustainably generate revenue, it may be an ecosystem with longevity and a use case beyond speculation.
How AI is used in Crypto
Aside from crypto coins and tokens that are powered by or backed by artificial intelligence, AI is being used by crypto traders and blockchain developers to improve productivity and leverage any advantage that can be had by using AI.
The simplest example is ChatGPT. Smart contract developers and crypto traders that use pinescript are using tools like ChatGPT to help write blocks of code to save time and help move to production faster. AI tools are particularly good at writing code if prompted correctly. Furthermore, AI is good at accepting change and improvement requests when it comes to refining code.
Obviously, there are better and more robust AI coding resources than ChatGPT now like GitHub's Copilot. AI tools allow crypto traders and blockchain developers to reduce their workload by feeding a prompt into an AI tool that generates code in a matter of minutes that might have otherwise taken hours. Since everything moves at lightspeed in crypto, minimizing the amount of time something takes is imperative to be successful.
Beyond coding and trading, some NFT projects use AI tools to develop artwork for their tokens using tools like Midjourney. For more technical creators, having an artistic resource can help to provide inspiration or create a prototypical framework for project art. The main photo for this post was created by Midjourney, and below are a few additional examples.
Some artists have expressed concerns about the training data provided to generative art engines like Midjourney suggesting that attribution or compensation should be provided to the artists since much of the AI-generated work is functionally derivative of other art. The technology is far from perfect, and there are still some ethical and moral implications of leveraging this technology, but it's still neat, and good to use for inspiration or prototyping a concept.
People dipping their toes into AI may be familiar with a few of these more common resources. However, there are several crypto-specific AI tools currently in use like Stoic, Stormgain, and Shrimpy that more advanced traders and crypto enthusiasts use to optimize their trading performance. We'll take a look at a few more below.
AI Tools and Resources
While there are many AI resources that developers, traders, and crypto enthusiasts use that are not specific to crypto, there are several cryptocurrency-specific AI tools that can be used to improve trading performance and gain a competitive edge. These are a few that we've found that seem to be popular.
Stoic
This tool is best for a beginner-friendly interface. Developed by Cindicator, Stoic is a mobile app designed to provide users with access to advanced investment strategies and powerful AI technology. It offers three trading strategies: META (moderate risk), FIXED INCOME (low risk), and LONG ONLY (high risk). The cost starts from $9 per month. The platform has a clean and intuitive interface suitable for both beginners and experienced traders, with a focus on diversification and risk management to mitigate risk and increase the potential for long-term growth. However, the bot will trade the entire wallet balance as there is no delegating feature, and it supports only Binance, Binance US, and Coinbase crypto exchanges.
Stormgain
This tool is best for leveraged trading and is known for providing reliable and timely trade signals for free. StormGain’s trade signals are made with the help of artificial intelligence by seasoned veterans who leverage different analytical techniques. The result generates performance indicators, high-quality trading signals, and news about various market movements. StormGain has an easy-to-use interface designed for beginners and provides instant withdrawal processing and deposit bonuses on multiple levels. However, the platform is unregulated in most countries and does not offer automated bots​​.
Shrimpy
Shrimpy works best for diversification and portfolio rebalancing. It automatically rebalances users' cryptocurrency portfolios, which simplifies the process of managing diverse assets. Shrimpy aims to provide traders with the means to diversify their investments and manage their portfolios. This bot allows users to automate their investment strategies and manage their overall portfolio. Currently, Shrimpy supports the top 15 cryptocurrency exchanges. It has a clean and intuitive interface, a wide range of features, and an active social community. Pricing starts from $13 per month​​, however, there is currently no support for automated bots.
CryptoHopper
CryptoHopper works best for backtesting strategies. This tool is a cloud-based trading bot that offers a range of features like mirror trading, strategy design, backtesting, and others. It currently supports multiple cryptocurrencies and exchanges. CryptoHopper is designed to simplify the set-up and execution of trading strategies allowing users to backtest trading strategies and use AI to make the most profitable decisions. CryptoHopper has a limited free plan, and pricing for their Explorer plan starts at $19 per month or $16.58 per month with an annual purchase.
CryptoHero
CryptoHero is one of the AI crypto trading bots that's worth considering. It is designed to assist traders in automating their cryptocurrency trading strategies. This tool provides various features to help users automate their trading strategies. These features include automated buying and selling of cryptocurrencies, setting up stop-loss and take-profit orders, and more. Like many other AI trading bots, CryptoHero aims to make trading easier for beginners and experienced traders. It offers a user-friendly interface and pre-built trading strategies. CryptoHero offers pre-configured strategies and allows users to customize them according to their preferences and risk tolerance. This level of customization can be valuable for traders who want a more bespoke experience.
The AI technology in CryptoHero involves market analysis, trend detection, and sentiment analysis. These analytical methods help the bot make informed trading decisions based on real-time and historical market data. CryptoHero is compatible with various cryptocurrency exchanges, allowing users to trade on different platforms using the bot's automation features. They also offer a similar product for stock trading called StockHero. CryptoHero has a basic free plan, but the premium plan starts at $13.99 per month when billed monthly and $139.99 when billed annually.
Coinrule
Coinrule is another AI-powered cryptocurrency trading bot that aims to simplify the process of trading cryptocurrencies for both beginners and experienced traders. This tool provides a platform for users to create and automate their own trading rules without requiring coding skills. Users can build a trading strategy based on specific conditions or triggers, and the bot will execute trades automatically. Its unique selling point is its rule-based trading system. Users can define rules using a simple interface that includes parameters like price movements, technical indicators, news events, and more, so traders can tailor their strategies to their preferences. Coinrule integrates with popular cryptocurrency exchanges, allowing users to trade across different platforms while using the bot's automated rules.
The platform offers a variety of pre-built trading templates and strategies that users can customize to match their risk tolerance and trading goals. Additionally, users can create their own rules from scratch. Coinrule provides both demo and live trading modes. The demo mode lets users test their strategies in a simulated environment before deploying them in the market. Users are notified via email when their predefined rules are executed. This keeps traders informed about their automated trading activities. Like any reputable trading bot, it emphasizes the importance of security. It typically uses API keys for trading access, which means the bot doesn't have direct access to your funds. Coinrule offers a Starter free plan; their Hobbyist premium plan is $29.99 per month or $359 per year when billed annually.
Bitsgap
Bitsgap is another AI-powered cryptocurrency trading platform. It offers automated trading and portfolio management features. One of the distinct features of Bitsgap is its ability to connect to multiple cryptocurrency exchanges users can trade across different platforms from a single interface and streamline trading activities. Bitsgap provides access to automated trading bots that execute trades based on predefined strategies. These strategies involve technical indicators, market trends, and other parameters. A unique feature of Bitsgap is its grid trading strategy. Grid trading is when a series of buy and sell orders are placed at regular intervals above and below the current market price, helping traders capitalize on price fluctuations.
Bitsgap also offers backtesting or trading strategies using historical market data to see how they would have performed in the past. Beyond automated trading, Bitsgap provides tools for portfolio management and can track holdings across different exchanges and assets. They emphasize a user-friendly interface by making it accessible to beginners and experienced traders. The platform also offers a range of tools and indicators to assist with decision-making. As with any reputable trading platform, security is a priority for Bitsgap. The platform employs API keys for trading access, which ensures the bot doesn't have direct access to user funds. Bitsgap offers a free 7-day PRO trial. Their Basic program is $29 per month, or $23 per month when billed annually.
These are just a few of the many crypto-specific AI tools available. More organizations are developing new and better crypto and AI tools every day. We will be monitoring the progress of this tech, and we will discuss more of this new tech as it hits the market. AI can be helpful for crypto ventures, and some ask if AI will replace blockchain tech.
Can AI Replace Blockchain?
Artificial Intelligence and blockchain are two totally different pieces of technology. While there may come a time when AI becomes more autonomous and thereby transacts or utilizes blockchain independently, AI can't really 'replace' blockchain, per se. It is possible that AI could develop a blockchain, but the way that blockchain works and the way that AI works are still very different. It would be like asking if a hammer could replace a saw. You might be able to use a saw as a hammer in a pinch if the handle were stout enough, but the two tools are different in nature. AI could use and create a blockchain, but AI can't become or replace blockchain.
It is worth noting, however, that AI may eventually become advanced enough to eliminate speculation on cryptocurrency, but we're probably a long way from that happening.
We hope you enjoyed this article and found it both insightful and informative. We plan to continue monitoring the state of crypto and AI since the comingling of these two pieces of technology is fascinating. Don't forget to like the article and feel free to share it with someone who might find it interesting, and follow us on X at @cryptogatemedia for more on the world of cryptocurrency and blockchain technology.