When AI intersects with Blockchain | Real breakthrough or just theory?

Will artificial intelligence (AI) combined with blockchain bring real breakthroughs or is it just slang for projects to approach trends?

AI and Blockchain are potential areas of a data-driven economy
AI and Blockchain can essentially complement each other well
With the emergence of many new projects, increasing investment capital flows and diverse development models, AI is a fast-growing branch when compared to other branches in the crypto market.
AI projects in crypto are still quite young, although diverse, most are at the experimental level to find market needs. Most current products, other than economic factors, do not have any outstanding features compared to traditional projects.

The role of AI and Blockchain in a data-driven economy
The economy runs on data
Data is information collected through various activities such as observation, measurement,... and stored in some memory. This memory can be the human brain, machines or more modern information systems.
Separate data is often not very important, but when gathered enough, they can be used to verify each other, analyze and serve as a premise for further actions.
Enough working data for the whole month to make payroll for employees
Data exists in every aspect of life. From the most primitive form, data is learned through the evolutionary process of animals, including humans. In today's economy, data is used to automate many different processes, simplifying work and increasing productivity.

Data serves life
In the age of information technology, key industries with huge value are mostly developed around data, including:
·      Server: Memory capable of holding more data
·      Big Data: A data set that is large to a certain extent
·      Artificial Intelligence (AI) and Machine Learning (ML): The process of acquiring and processing data
·      Cloud memory: Download data to another party's memory for storage
·      Cloud computing: Using another party's memory to process your data
·      Blockchain: Storage operated and validated by multiple parties. The data thereby does not belong to any party. This is the reason why blockchain has characteristics such as transparency, decentralization or dispersion.
Data plays an important role in today's economy, they are the "oil source" that provides energy for the activities of individuals and organizations. Data breakthroughs help eliminate geographical gaps. principles, bringing the world to an unprecedented era of integration.
The intersection between AI and Blockchain
AI by its nature has a lot of data and that data is processed effectively, so where does that data come from and can we verify that data is correct and safe? The above question is one of the most discussed topics about the effects of AI on life.

Blockchain is essentially a memory with verified data. Therefore, AI applications will be great if they can take advantage of the strengths of blockchain to help create reliable and safe 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 and financial resources to develop. development and research. Their applications are also very diverse as we have seen today. Below we will learn about products being developed at the intersection of AI and Blockchain.

Outstanding parameters

AI is considered the keyword of the decade and a major trend of the world. The rapid development of typical applications such as ChatGPT has created a driving force for the development of AI projects or AI applications in work and production processes. The investment capital flow into the AI field accordingly grew strongly.
Similar to the crypto market, investment capital is also gradually pouring into AI projects. AI tokens or projects announcing they will integrate AI into their products have had impressive growth in the past year.

With the nature of a young market, crypto has a lag compared to the traditional market when the investment cash flow will only be truly significant from 2023. By the end of 2023, there were 298 million USD invested in projects. AI project in crypto. Although the above number is still modest when compared to other branches, it is relatively positive considering the age of the project team.

Cash flow invested in AI projects in crypto is distributed in many different areas, most of the large investments are concentrated in 2023 and 2024. Projects invested before 2023 mainly add more money. Applying AI to your products to capture trends. Projects invested from 2023 tend to develop with AI as the focus in addition to AI-integrated products.

Overview of the AI ecosystem in the crypto market

With the explosion of AI, the number of projects developed around this keyword has grown very quickly, especially in the past year. Although there are many diverse applications, we can divide AI projects in crypto into 4 main groups:
·      Tools & Apps: Tools or applications that integrate AI
·      Interfaces & Marketplaces: Is an interface for users to use, buy and sell AI-related products
·      Infrastructure & Protocols: Infrastructure and platform for developing AI-related products
·      Blockchains & Ecosystems: An AI-centered ecosystem.
Tools & Apps
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 increase the experience. user.

The projects receiving the most investment mainly belong to the game branch, virtual tools and characters. Current AI application game projects still do not have products, virtual tools or characters currently have projects with products.

However, products in the virtual tools or character branch have models that are quite similar to traditional products. If the current development direction is maintained, the above projects will depend heavily on economic factors, or in other words, focus on how to apply tokens in the project to compete with traditional products.
Some outstanding projects in the Tools & Apps branch include:
·      Parallel: The game project announced that it will integrate AI into upcoming game products.
·      Space and Time: Tool to help create SQL code from the prompt, which is extremely useful for doing data analysis in the crypto market.
·      bitsCrunch: Use AI to analyze data and provide insights
·      MyShell: Create AI bots
·      AI Arena: Create and train AIs to compete against other AIs
Interfaces & Marketplaces
The Interface & Marketplaces branch has a relatively small number of products, because the product side related to the field of AI in crypto is still in the testing phase and has not found a breakthrough model to attract users. Projects in this branch also do not have outstanding projects. There are a few long-standing names like Ocean Protocol that have now shifted to focus more on AI.

Infrastructure & Protocols
Infrastructure & Protocols is a branch with many product breakthroughs. Blockchain and AI can essentially complement each other, so the development of related infrastructure solutions will help promote the above integration process.
For example, projects like Fetch.ai and 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 product launch projects, but due to the short period of time, the market has not yet seen the effectiveness that infrastructure projects bring.

Some outstanding projects in the Tools & Apps branch include:
·      Fetch.ai: Provides a framework to develop AI services
·      Io.net: Provides GPU computing power.
·      0xScope: Provides a framework for projects to develop AI-related functions.
Blockchains & Ecosystems
Developing an ecosystem requires not only the development of the platform but also the development of the products above. It is quite understandable that with a young 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, the purpose of Bittensor is to leverage the transparency and data sharing capabilities of blockchain, to support businesses in easily developing 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 a lot of attention and good growth in recent times.

However, Bittensor in particular and other ecosystems in general are still young and have not yet attracted developers and projects to the ecosystem.

When AI intersects with Blockchain | Real breakthrough or just theory?

Not just a short-term trend in the crypto market, AI has had many real quality projects developing around this topic. In fact, with the emergence of many new projects, increasing investment capital flows and diverse development models, AI is a fast-growing branch when compared to other branches in the crypto market. However, along with that rapid development, besides opportunities, there are also many challenges for development projects and investors.

Challenges when combining AI with Blockchain

AI projects in the crypto market are still quite young, although diverse, most are at the experimental level to find market needs. Most current products, other than economic factors, do not have any 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 be successful similar to how Axie Infinity did with the game segment in crypto.

Projects that know how to optimize the strengths of AI and blockchain need more time to prove their effectiveness as well as attract developers and value to the ecosystem.

What to expect when AI combines with Blockchain?

Apply AI to optimize costs and increase user experience

Developers with strengths in other areas can completely apply AI to reduce development time and optimize costs instead of only focusing on developing products around AI.

Applications that help optimize development time include:
·      Chatbots on Solana and other ecosystems help developers access the ecosystem faster.
·      Products that help create images to support the development of NFT collections.
·      On the user and investor side, knowing AI tools helps find opportunities faster and better than those who don't.

An example can be mentioned as the NFT value assessment tool in a Nansen collection. Users using the tool can see which NFTs are undervalued to purchase.
Create products that take advantage of the strengths of AI and Blockchain/crypto
Blockchain technology and the use of tokens as a driving force have a major impact on the operating model of AI projects in the crypto market.

For example:
·      AI x Depin: Io.net uses tokens as incentives for providing GPU computing power. MBD uses tokens as incentives to attract data, and operators process data.
·      AI x Game: Parallel, a crypto game project that will use AI to supplement gameplay. Sleepless AI, a virtual character game that uses tokens and NFTs instead of traditional game items, thereby promoting the flow of money.
·      AI x Analytics: Use AI to enhance data analysis to find market insights.
·      And there are many other applications that can be mentioned such as using AI to create bots to automatically trade in DeFi, portfolio management, content creation,...
Each application, if successful, can attract a large amount of value as we have seen in Depin, Game and many other branches in the past.

summary

With the emergence of many new projects, increasing investment capital flows and diverse development models, AI is a fast-growing branch 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.