AI Agents Take Center Stage in Blockchain

Amidst the backdrop of a crypto market grappling with falling prices and escalating global interest rates, investors have redirected their gaze toward the realm of artificial intelligence (AI) this year. While Bitcoin remains a steadfast focal point for the future, experts posit that AI is poised to seize the spotlight.

Nansen’s latest prognostication foresees a transformative juncture in 2024, wherein artificial intelligence takes the forefront in shaping forthcoming possibilities, promising a more secure and streamlined ecosystem within the blockchain.

The Forecast for AI Ascendancy

Nansen’s 2024 forecast anticipates a watershed moment in technology, envisioning artificial intelligence as the driving force behind future developments. Despite uncertainties surrounding the seamless integration of AI and blockchain, the analytics platform notes the emergence of promising use cases.

AI agents, with their proficiency in handling transactions, securely managing assets, and facilitating value exchange on behalf of users, are emerging as pivotal components. This foresight paints a picture of a future where AI agents evolve into a primary category of users within the blockchain landscape.

The report underscores the significance of verification and risk management through cryptography to differentiate between human and AI interactions within the blockchain. While AI brings specific applications to the blockchain, cryptographic methods for identification verification play a crucial role. Blockchains provide authentication mechanisms through cryptographic proof via digital signatures, IPFS & Merkle Trees, and zkML (zero-knowledge machine learning).

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However, persistent challenges exist. The Nansen analyst points out, “Some of these cryptographic models will be trained and optimized (off-chain) using AI. If AI cryptographic models become performant enough in the future, will AI be able to manipulate ZK or other proofs?”

Incentivizing AI Through Tokens

Nansen asserts that incentivizing AI models through token-based rewards is imperative for enabling their autonomous functionality. By offering tokens as incentives, AI agents/models can be rewarded for achieving desired performance.

In the crypto market, tokens associated with AI projects like Bittensor (TAO) and Autonolas (OLAS), along with others linked to AI, are poised to sustain momentum. The resilience of AI project tokens, even in bearish market conditions since early 2023, signals significant confidence and momentum in the nascent stages of AI and blockchain. Established tokens like FET and AGIX stand out in the higher-cap AI coin category.

While the current emphasis is on expanding the infrastructure of AI, Nansen predicts a shift toward prioritizing consumer-oriented applications leveraging the existing technological framework. It becomes evident that the challenge extends beyond infrastructure to identifying the intended beneficiaries and end-users of these applications.