AI’s Influence on Crypto to Outweigh the Reverse, Says Expert

• AI set to unlock greater opportunities in the crypto market surpassing blockchain use.
• Vitalik Buterin predicts AI will transform prediction markets, DAOs, and decentralized exchanges.
• AI-driven prediction markets could verify social media, assess stock prices, and boost governance.

‘AI’s potential to reshape crypto far outweighs the reverse,’ argues a crypto expert on X.  He believes that, in the near future, the crypto industry will derive more value from AI than any other sector, and that this impact will eclipse any benefits of using crypto to enhance AI.

The second one is important.

The value that can be unlocked by using AI in crypto is significantly more than using crypto to improve AI.

I would add that in the near-mid term, the crypto sector will unlock more utility from AI than any other industry in the world. pic.twitter.com/GtdP5n47KF

— MilliΞ (@llamaonthebrink)
September 24, 2024

AI: A Solution to Crypto’s Challenges

The analyst stated that open-source AI must utilize proof of work mechanisms to ensure sufficient censorship resistance. He added that governments are likely to impose restrictions on advanced AI technologies, potentially more than they have on crypto assets like Bitcoin.

Read also: AI Payments: Is Bitcoin the Future or Fiat Still King?

Beyond censorship resistance, there is a significant opportunity to use AI to address challenges within the crypto sector. This dual focus suggests that the industry might gain equal or greater value from employing AI to solve existing issues rather than solely relying on blockchain to distribute AI capabilities.

Vitalik Buterin’s View on AI in Crypto

Vitalik Buterin shared similar thoughts, citing market-making bots in decentralized exchanges (DEXes) as a longstanding example of AI’s potential within the crypto space. He predicts further developments, particularly in prediction markets and decentralized autonomous organizations (DAOs), where AI can play a central role.

As I said in my post earlier this year… there’s been a crypto/AI intersection use case in plain sight for a decade, it’s bots market-making DEXes.

A lot of fruitful avenues in extending this to prediction markets, and then to adjudication games in DAOs. pic.twitter.com/xGOj9Oo65s

— vitalik.eth (@VitalikButerin)
September 27, 2024

AI Omen: A New Prediction Market Concept

Buterin had earlier introduced the concept of AI Omen, a prediction market demo where AI entities act as active participants. Buterin described predictive questions about events, such as tax season or court decisions, allowing AIs to contribute insights into outcomes based on available data.

 Read also: OpenAI Launches New AI Model Designed to ‘Think’ Before Answering

AI’ potential in the prediction market is vast. The report suggests these technologies are poised to offer solutions for verifying social media content, assessing stock prices, and evaluating the legitimacy of online interactions.

Also, AI’s ability to participate in a decentralized mechanism for rewarding and penalizing predictions presents a new approach to governance. AIs could engage in a game-like structure where their performance is evaluated based on user inputs.

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