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Top 10 Artificial Intelligence (AI) Cryptocurrencies – Forbes Advisor UK
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Forbes Advisor has provided this content for educational purposes only and not to help you decide whether or not to invest in cryptocurrency. If you decide to invest in cryptocurrency or any other investment, you should always obtain appropriate financial advice and only invest what you can afford to lose.
It’s hard to imagine two technologies more current in the zeitgeist than artificial intelligence (AI) and cryptocurrency, so it’s no surprise that the two fields converge in the form of AI cryptocurrencies.
We looked at some of the largest AI-powered cryptocurrencies by market capitalization, according to CoinMarketCap*. But first, here’s an introduction to what they are.
What are cryptocurrencies?
Cryptocurrencies are a form of digital currency, known for being a high-risk investment. They can be spent or traded, but they are not issued by central banks or stored in traditional financial institutions.
Instead, they are decentralized. This means that balance and transaction records are not controlled by banks or payment service providers, but are kept by people who volunteer to keep track of everything using specialized software.
Volunteers participate because by doing so they have the opportunity to earn valuable cryptocurrency without having to pay for it.
Enormous speculation on cryptocurrency values has led to a boom in both the number and value of assets in the sector in recent years, peaking in November 2021 before collapsing in spring 2022.
What is artificial intelligence?
Artificial intelligence (AI) is a field of computer science that allows machines to make data-driven decisions, increasingly mimicking human intelligence.
Recent and popular examples include AI-generated artwork, in which a program interprets user instructions, written in natural language, to create digital artwork, and ChatGPT, an application that can “write” according to a user-submitted brief.
In both cases, the results are close enough to what a real person might create that they can be mistaken for human creation, and these applications are becoming increasingly sophisticated.
The use cases for AI are effectively limitless, and the technology has found its way into the cryptocurrency space.
What is an AI cryptocurrency?
AI cryptocurrencies are tokens that power AI blockchain platforms like The Graph. Users spend tokens to use the platforms and the benefits of their integrated artificial intelligence.
We looked at some of the top AI-powered cryptocurrency projects by their market capitalizations to see how AI is being used in the industry.
Near Protocol (NEAR)
Market capitalization: £5.9 billion
Near Protocol (NEAR) is a platform that allows developers to create decentralized apps (dApps). Being a layer 1 blockchain, Near is a rival to Ethereum, but is faster, with higher throughput. It achieves this with a unique “sharding” technique that splits the blockchain into smaller subchains, with several validators working on each.
NEAR currently trades at £5.54.
Rendering (RNDR)
Market capitalization: £3 billion
Render allows artists to harness the computing power needed to render computer graphics from cryptocurrency miners willing to rent their graphics processing units (GPUs). The project was launched in 2017.
RNDR is the native currency of the Render project, and users spend it to access miners’ GPU power. The system works on a proof-of-work consensus mechanism.
RNDR currently trades at £7.89.
The graph (GRT)
Market capitalization: £2.1 billion
The graph is a protocol for indexing and querying data from blockchains similar to how Google indexes and queries data from websites. Indexing blockchain data can be challenging, but The Graph aims to change that by organizing data into smaller “subgraphs.”
Its native, Ethereum-based cryptocurrency, GRT, was worth £0.22 at the time of writing, down from its February 2021 peak of £2.09.
The price of the chart
Bitensor (TAO)
Market capitalization: £2 billion
Bittensor aims to create a neural internet by revolutionizing the development of machine learning platforms. The project is creating a peer-to-peer marketplace for artificial intelligence where AI models can combine their intelligence, essentially creating a “digital hive mind.” This innovative and decentralized method is designed to enable rapid expansion and sharing of knowledge between AI systems.
TAO currently trades at £2.99
How can an investor buy AI cryptocurrencies?
Many AI cryptocurrencies can be purchased using some cryptocurrency exchangesjust like traditional cryptocurrencies like Bitcoin and Ethereum.
To trade, investors will need to open an account, which often involves some identity verification steps, and deposit some fiat currency. They will then be able to access the page of the AI cryptocurrency they wish to purchase within the exchange, enter the amount they wish to purchase and execute the operation.
How can an investor hold AI cryptocurrencies?
Most exchanges offer free servicecrypto walletstructure in which to store privateANDpublic keys– the credentials needed to spend or exchange crypto assets. If an investor prefers, he can store his keys offlinecold wallet.
Cold wallets are likely safer than hot wallets, as hackers cannot target them as easily. However, if an investor loses the login details for his cold wallet, he will not get the support in regaining access to his keys that he would get with a hot wallet.
Are AI Cryptocurrencies Safe?
No crypto currency is safe from market instability, and 2022 was the year cryptocurrency volatility was laid bare.
The UK’s financial regulator, the Financial Conduct Authority (FCA), has repeatedly issued warnings about investing in cryptocurrencies, saying that people should be prepared to lose all the money they invest.
And as for hackers, cryptocurrency wallets and exchanges are likely to remain a target for criminals, leaving people’s assets at the mercy of the security implemented by them and their exchanges.
Cold wallets provide protection against hacker attacks, but become vulnerable once connected to a web-connected computer.
Meanwhile, exchanges continue to be attacked. Exchanges may tighten their security measures as hackers expose weaknesses, but it’s a cat-and-mouse game that looks set to continue.
Cryptocurrency is not regulated in the UK. The UK regulator, the Financial Conduct Authority, has repeatedly warned investors that they risk losing all their money if they buy cryptocurrencies, without the possibility of compensation.