AI

The Truth About AI Crypto Tokens

The Truth About AI Crypto Tokens
In: AI, Crypto

Recently YouTube has been saturated with videos shilling the latest trend of AI Crypto. These influencers claim that AI crypto tokens are the future and that they by purchasing them you’ll become super rich. Incredibly, despite so many people discussing the topic, I couldn't find a single video that was critical of any of these so-called AI crypto projects. Therefore, I’m going to swim against the tide by explaining why this is merely a passing fad and these tokens are destined to fail.

To begin, we’ll start by looking at the reason for the hype. It really all came about because of ChatGPT, the chatbot launched by OpenAI in November 2022. Due to the success of this product, everyone is talking about AI and it has spurred huge investment in companies in this field. Microsoft for example just invested 10 billion dollars in OpenAI, which is in addition to the 1 billion dollars they invested in years prior. This has resulted in opportunists leveraging the hype generated by ChatGPT for their own benefit. Companies that were dead in the water, after exhausting the funding they had swindled from investors, are now suddenly pivoting to AI in order to secure new investment and keep the gravy train going. To achieve this, all they needed to do was attach the buzzword “AI” to the name of their product and then get ChatGPT to update the landing page of their website to reflect their new AI focus. We saw this same opportunistic behavior when metaverse was being hyped up in 2021. This hype largely stemmed from Facebook rebranding to Meta and investing big in the metaverse. But after all that we were sold, today Metaverse is barely on anybody’s radar and most people who bought into metaverse crypto projects are left holding a worthless bag. The AI trend will be no different in that regard.

So are there really any benefits when combining AI with blockchain? In short, the answer is no. Suggesting that AI and blockchain could be used in tandem is absurd and indicates that the person advocating for this concept lacks a fundamental understanding of the underlying technologies. Using blockchain in any AI product would be extremely inefficient because blockchains are not designed to handle the high throughput required for neural networks. Even if that were to change in the future, the question of “why” would still linger. AI does not bring any benefits to blockchain, and blockchain does not bring any benefits to AI. Therefore, attempting to force them together is completely unnecessary. For now, the only thing AI does well in the blockchain space is pumping bags, as evidenced by the substantial gains experienced by some of these so-called AI crypto tokens. This is why YouTubers are trying their best to sell you on these tokens. Chances are that they are holding a nice bag of them, whether they bought it themselves or it was given to them in exchange for promotion. You the viewer, are being used to propel prices higher and provide exit liquidity.

When one looks critically at the projects being touted as a guaranteed 100x, there is no fundamental value that would make a person want to invest in the absence of hype. In most cases, the token only exists to be used as a method of payment to access some AI service, which likely isn’t even real AI. So, in other words, it exists only to enrich the founders of the project who issued the token and who undoubtedly whole a large majority of its total supply. They could have used existing cryptocurrencies that are widely used for payments such as Bitcoin or Ethereum. But by issuing their own “AI Crypto”, the founders can get rich quick and then quietly disappear without delivering on any of their wild promises. I've repeatedly heard proponents of these projects argue that they're making AI more accessible to the masses, yet they fail to provide any concrete explanation of how they're achieving this goal. Since ChatGPT is a free service, any alternative product that is locked behind a paywall and requires users to purchase the company's token represents a significant barrier to entry. There is no way these products will gain significant adoption and they are not intended to.

In conclusion, the hype around AI crypto tokens has no substance. That’s not to say that they won’t pump, as they already have and likely will continue to as more people are suckered in. But these gains will likely be erased just as fast as they appeared. If you choose to invest just be sure you aren’t the one left holding the bag. If you enjoyed this video, you may also be interested in hearing about the hacker who was arrested for stealing 50,000 Bitcoins from the Silk Road. Click the video on screen to find out how a simple mistake led to this Bitcoin billionaire’s downfall.

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