A recent Coinbase report suggests that the perceived value of many AI tokens has been overstated, leading to concerns about their sustainability.
David Hahn, a research analyst at Coinbase, highlighted that the recent price increases observed in these tokens may be driven more by hype than actual utility or usage.
The surge in AI-related cryptocurrency projects raises questions
Based on data from CoinGecko, AI-related cryptocurrency projects have risen to a total value of $26 billion this year. Much of this increase, about 30%, occurred in a single day, coinciding with a rise in Nvidia shares.
Since the start of the year, AI tokens like Akash and Render have seen significant increases, with gains of 146% and 99% respectively, outpacing Bitcoin's 54% rise. Despite these impressive increases, Hahn noted that the future outlook for most of these projects remains uncertain.
The report noted that AI tokens typically benefit from the overall bullish sentiment in the cryptocurrency market and the spread of AI-related news. However, Hahn stressed that current interest in AI codes may be overblown.
He expressed that the perceived value of many AI tokens may be inflated due to the widespread focus on the AI industry, and these tokens may lack sustainable demand drivers in the short to medium term.
Han also highlighted the specific challenges faced by AI tokens like the Akash Network. It works similarly to tech giants like Amazon and Google by leveraging users' computing power for pay-for-cloud computing, which has seen an increase in usage. However, there were issues such as low supply and potential demand for the Akash network.
Furthermore, he suggested that such projects should reconsider their token distribution strategies to attract more attention. He stressed that only “micro” use cases could enable these projects to compete with centralized giants like Amazon Web Services or ChatGPT.
Buterin advocates the integration of artificial intelligence
In addition to the ideas presented by Coinbase, Vitalik Buterin, co-founder of Ethereum, recently expressed optimism about incorporating artificial intelligence to address problems within Blockchain networks.
Buterin stressed the potential of AI-based audits to identify and correct problematic code within the Ethereum network, highlighting their use in mitigating the “biggest technical risks” on the network.
Meanwhile, Coinbase's analysis points to two potential paths for growth in the crypto AI sector: improving access to Blockchain data for human interpretation and analysis and decentralizing the often centralized AI infrastructure. However, Han stresses that the future of decentralized AI is uncertain, highlighting the unpredictable nature of the AI industry's direction.
