Exploring the Intersection of AI and Crypto

Exploring the Intersection of AI and Crypto

Jan 31, 2024


At Imperii Partners, we are a crypto-native investment bank that delivers optimal outcomes for clients through services like M&A advisory, strategic capital raising, partnerships, and financial advice. As pioneers in this space, we pride ourselves on forging long-term partnerships and connecting our clients to resources that can accelerate their success.

Staying at the forefront of innovative technologies like artificial intelligence (AI) and blockchain is key to how we maintain this leadership position. As these two powerful technologies continue advancing, new opportunities for synergies between crypto and AI arise.

Understanding the Crypto+AI Landscape

We categorized crypto+AI applications into four main groups:

  1. Verifying AI Training Data via Blockchain
  2. AI as a player in blockchain games and mechanisms
  3. AI as an interface to understand and safely participate in crypto
  4. AI as part of the rules and governance of crypto networks
  5. Using crypto techniques to create decentralized AI models for general purposes

Let’s explore each category in turn and the key challenges involved.

Verifying AI Training Data via Blockchain

One promising use case is leveraging blockchain to verify and validate the training data used for AI models. Recording the training data on tamper-proof ledgers enables developers to audit inputs and track the provenance of information.

If bias or inaccuracies are discovered in a model, the training data ledger on blockchain could help identify the root cause. The model could then be retrained or rolled back to a previous unbiased state.

This application of blockchain would mitigate significant risks associated with AI training data today. It provides transparency and accountability regarding the inputs that influence AI behavior.

Building trustworthy AI relies heavily on curating high-quality training data. A blockchain-verified data pipeline could give both developers and users greater confidence in AI integrity. However, full benefits would require wide adoption from major AI providers.

AI Participating in Crypto Protocols

The most immediately viable synergy is AI agents participating in crypto economic games and mechanisms. For example, arbitrage bots already play a major role in decentralized exchanges. Prediction markets could be powered by AI players contributing liquidity and predictions at a micro scale unsuitable for humans.

Potential use cases abound:

  • AI oracles providing real-time data for prediction markets
  • AI agents contributing to credibility scoring and anti-scam signaling
  • Automated smart contract negotiation and fulfillment between AI agents

By rewarding or penalizing AI players algorithmically via crypto protocols, their incentives can be aligned without centralized governance. However, care must be taken to limit adversarial exploits.

AI Interfaces for Crypto Users

Another promising category is AI assistants that help users safely navigate the crypto landscape. For example, MetaMask’s scam warning feature and Rabby wallet’s transaction simulation aid users by explaining potential risks.

AI could offer significant advantages in:

  • Summarizing complex dapps and transactions in plain language
  • Flagging risks from suspicious tokens, urls, and contract interactions
  • Detailing the credibility of data sources and front-running threats

However, adversarial machine learning remains a concern. Malicious actors may optimize scams against known AI limitations. A diversity of constantly evolving AI helpers built on crypto protocols may provide more robust protection.

The Dangers of On-Chain AI Governance

Perhaps most intriguing but risky is incorporating AI directly into blockchain governance and smart contracts for subjective decisions. This raises multiple issues:

  • The computational overhead of privacy-preserving techniques
  • Vulnerability to black box adversarial attacks
  • Challenges decentralizing training data

Steps like limiting model queries, publishing vulnerabilities after delays, and decentralized data governance via DAOs may help. But on-chain AI judges remain challenging today. More incremental improvements like social media transparency may be preferable near-term goals.

Building General-Purpose AI via Crypto

Finally, some projects like NEAR envision using crypto techniques to build decentralized general AI models for broader use. The motivations are two-fold:

  1. To enable democratic control over powerful AI
  2. To create AIs with built-in transparency and shutdown controls

This is an ambitious long-term vision. Time will tell if the technical hurdles around privacy and decentralization can be fully overcome. But crypto-aligned approaches may yield safety advantages over closed mainstream alternatives.

Key Takeaways

As summarized, the most robust intersections to explore likely involve AI agents participating in crypto protocols, with crypto-based techniques enabling beneficial AI applications as a longer-term possibility. AI interfaces also show significant potential to improve user security.

But we must thoughtfully assess the challenges and limitations involved with each category. At Imperii Partners, we stay on top of innovations like these at the frontier of AI, crypto, and blockchain technology. As pioneers in this space, we’re committed to advancing its most constructive use cases while mitigating emerging risks.

Connect With Our Experts

Looking for strategic guidance in the world of crypto? The experts at Imperii Partners have the insights to help guide you forward. With decades of experience across M&A, capital raising, blockchain technology, and all aspects of web3, we are eager to share our institutional knowledge. Don’t go at it alone – leverage our expertise to support your success. Reach out any time at info@imperii8.com – let’s explore how we can partner to accelerate your growth.