Table of Contents
The crypto industry spent 2022 crippled by a string of insolvencies at blockchain companies. But just a few months later, blockchain is looking stronger than ever. Increasing network usage, transaction volume, and DeFi app development has proven cryptocurrency’s resilience to stress.
While crypto prices on liquid exchange markets for trading tokens haven’t recovered to their record highs in Nov 2021, they have risen steadily since Jan 2023.
Price trends are mostly following a rising channel in correlation with Bitcoin’s supply side-governed four-year market cycle. Blockchain began to rebound, after the yearlong “crypto winter,” in tandem with the big splash OpenAI’s ChatGPT made at its unveiling.
What is Artificial Intelligence?
AI has been a major topic of conversation since the public release of ChatGPT began to show off some of the latest capabilities at the cutting edge of large language model chatbots.
That was on November 30, 2022, and the event has kept journalists, software programmers, students, teachers, and social media busy chatting about AI ever since.
They’ve also been using it to write news articles, code apps, and create an utter crisis for universities reckoning with how to let students use computers to learn while keeping them from letting the computers do the work for them and actually stunt their learning.
But the crypto industry is at the vanguard of employing AI. It’s very high-tech and in a constant, urgent race. The blockchain space is quick to employ new software tools.
The enormous stakes in profits and losses in this sector also incentivize participants to find any edge they can in software and business.
Artificial intelligence is machine learning and intelligence capability so far advanced that in some important ways, it passes the classic Turing Test for intelligence.
GPT-4 designed a $77 million market cap meme coin
As if AI chatbots using English fluently and correctly while sounding almost normal wasn’t impressive enough, earlier this year, GPT-4 wrote the smart contract script for a cryptocurrency that launched to a $77 million market capitalization on crypto exchange markets.
Rhett “Mankind” Dashwood, a digital artist based in Australia led the AI chatbot to design the highly sought-after crypto. He says it took him just about a week to accomplish. Dashwood asked the chatbot how to create a popular meme cryptocurrency. The result was “TurboToad.”
A digital artist for many years, “Mankind” took to the blockchain during the NFT craze in 2021. He sold artworks at auction for thousands of dollars using smart contract technology. After 2022’s crypto winter, he was in a rut and got the idea to collaborate with AI.
Using a paltry starting budget of $20 for his ChatGPT subscription, the NFT artist asked him for the steps to create a popular cryptocurrency. Then he had the AI walk him through the steps and even write code for him. He found volunteers on Twitter to check and debug the code.
This is most likely not the last time we will hear of AI designing wildly successful crypto smart contracts or Web 3.0 applications. (More on how AI affects the crypto market.)
How AI is used to predict crypto market prices
AI is also important in helping the crypto industry predict market prices for tokens traded on crypto exchanges. The dramatically volatile price action for cryptos is an enormous source of opportunity and risk for blockchain’s participants. So getting a handle on where the price of different currencies is going next is very valuable information in the crypto industry.
Some early studies into the usefulness of ChatGPT to predict stock prices are promising. That’s very impressive considering ChatGPT is not designed to predict market movements. It’s a large language model that is trained to be informative and helpful while interacting with users conversationally. But using market sentiment as a gauge, chat AI has had some success at predicting prices.
CoinPriceForecast is one example of an AI tool for making crypto price predictions.
As the website for the tool explains:
“Self-learning technology is different than traditional programming. The system uses prediction models, a set of parameters that the computer can use to make decisions... Codes behind deep learning technology combine time series data, media news, regulator activities, coin events (like forks), and traded volumes on the exchanges and their liquidity, etc.”
While the AI crypto price prediction engine is far from perfect, it recently scored a win against human chart watchers. While many technical analysts were issuing Sell recommendations for Ripple (XRP) the weekend of May 13th, CoinPriceForecast’s AI dramatically revised its XRP outlook upward. Over the following week XRP just so happened to rally on crypto exchanges.
Just in case you’re curious, the tool recently predicted Bitcoin’s price at the end of 2023 will be $33,047. That would represent a 34% ROI over the current spot price of Bitcoin (BTC) on crypto exchanges at the $24,600 handle.
