The intricate world of cryptocurrencies, much like the real-world order, classifies its offerings under distinctive categories like utility coins, payment coins, and stablecoins to keep things simple for the investors. In recent times however, a new class of cryptocurrencies, called AI crypto coins, has triggered quite the intrigue on social media. Powered by Artificial Intelligence (AI), these AI crypto coins are usually related to projects that aim to bring AI and blockchain together, along with elements of Machine Learning (ML).
Like all usual cryptocurrencies, AI crypto tokens are also built on blockchain networks. Unlike other cryptocurrencies, however, these tokens are loaded with AI capabilities that promise better security, functionality, as well as the general performance.
AI crypto coins are capable of recording and maintaining market trends, in addition to predicting the upcoming fluctuations in prices.
Using the natural language processing (NLP) technology, AI cryptocurrencies could also comb social networking platforms to scan for crypto-related keywords and help investors make informed decisions.
Examples of some popular AI coins
As per a recent report by Go Banking Rates, there are currently a big bunch of existing AI coins, with an estimated collective valuation of $3.2 billion (roughly Rs. 26,436 crore).
The Graph (GRT), Render Token (RNDR), Injective (INJ), SingularityNET (AGIX), and Oasis Network (ROSE) are named as the top five AI cryptocurrencies on CoinMarketCap, with valuations ranging between 301.73 million (roughly Rs. 2,492 crore) to $1 billion (roughly Rs. 8,260 crore).
Like usual cryptocurrencies, investors can use traditional exchanges like Crypto.com or Coinbase to purchase these AI tokens.
Why do investors choose AI coins
Traditional cryptocurrencies like Bitcoin and Ether are subject to market volatility and could, hence, be perceived as financial risks. In order to stay ahead of the curve, AI crypto coins attract investors who prefer taking an algorithmically calculated approach in terms of suggesting investments.
As per LCX, the Liechtenstein-based crypto exchange, AI cryptocurrencies also offer better security measures like, facial recognition technology, deployed to prevent fraud.
These are among top reasons why experimental investors give AI-backed cryptocurrencies a shot.
Drawbacks and opinions
Despite the otherwise glowing growth trajectory of AI coins, some from the industry are not fully convinced that these cryptocurrencies are any better than the other classes of these digital assets.
Speaking to Gadgets 360, Indian blockchain architect and Web3 author Rohas Nagpal said investors must do their due diligence before investing funds into “all hype” altcoins.
“AI is a great disruptive force that will change a lot of things. But the so-called AI cryptocurrencies are all hype, no substance,” Nagpal said.
In addition, there is the glaring issue of data collection. Since AI tokens need to access holders’ market habits to suggest investment advice, it would collect the data around the investors’ investment patterns.