Artificial Intelligence (AI) and cryptocurrencies are two distinct technologies that have emerged relatively recently.

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As Binance CEO Changpeng Zhao mentioned in one of his AMA sessions, the key parameter for listing tokens is the community’s interest and engagement—such as the number of social media followers. While code audits and the token’s prospects are important, they take a back seat without an active audience. Following the release of ChatGPT and the subsequent surge of interest in AI, numerous projects related to AI, such as image generation programs, began to emerge one after another.
In addition to projects that release their tokens based on existing platforms, entire ecosystems with their own blockchains have emerged, using proprietary consensus algorithms. As we know, a consensus algorithm is a mechanism that allows all participants in a blockchain to have a unified source of truth about it. Bitcoin, for instance, uses the Proof-of-Work mechanism, while a less energy-intensive alternative, Proof-of-Stake, was developed later. In the case of cryptocurrency ecosystems based on AI, another consensus algorithm, Proof-of-Intelligence, has been created. Instead of solving mathematical problems to perform transactions, this algorithm allows for operations involving machine learning tasks. One such algorithm is used in the Bittensor blockchain and its internal token, TAO. This is one of the largest AI-based ecosystems, where users can create their own projects for machine learning tasks using the system’s internal programming language and unified token.
The benefits of using AI-based products also extend to regular users who hold tokens. Networks formed on similar consensus algorithms accept tokens for “staking” to facilitate network transactions. Additionally, users can rent out their computational power to perform AI tasks, earning rewards in the form of project tokens—a new form of “mining.”
The integration of a technology capable of processing vast amounts of data, learning from it, and making future predictions has naturally found its place in another aspect of the cryptocurrency world: trading.
Large institutional financial companies leverage artificial intelligence for these purposes. AI can analyze past market behaviors following certain fundamental events and project this analysis onto potential future behavior in similar situations. There are also numerous indicators based on technical analysis that can generate forecasts.
It is important to note that such predictions do not account for fundamental causes that might occur. In the highly volatile world of cryptocurrencies, even a single statement from a significant influencer can trigger a cascade of events that no technical analysis tool can predict or prepare for.
Regarding trading bots that claim to use AI elements in their algorithms, it should be noted that most of them contain very little actual AI. Bots operate according to their programmed algorithms, which is the responsibility of the trader, not the automated program.
Furthermore, the heightened interest in artificial intelligence has led to an increase in fraudulent projects that present AI as a miraculous solution capable of guaranteeing profits and predicting future prices. Under this guise, indicators, signals, and investment management services are sold, often claiming to be exclusively AI-driven. It is crucial to understand that, given the current state of technology, AI can become a valuable assistant to an experienced trader but cannot replace the trader’s experience and functions.
In our trading product, Burvix Traders, we also use AI as an assistant for analyzing past events and strengthening our strategies to withstand so-called “black swan” events.
Artificial intelligence and cryptocurrencies have become integral parts of the modern world and continue to actively integrate into our daily lives. Exchanges will offer new tokens for investment and trading, and new projects will emerge, providing users with opportunities to profit. However, alongside these developments, unscrupulous companies may use these terms to deceive potential victims, promising services and guarantees they cannot deliver. Therefore, when exploring new opportunities, it is essential to maintain critical thinking and thoroughly evaluate each offer. It is crucial to remember that artificial intelligence is merely a tool, not a miracle cure.