Artificial intelligence (AI) is a branch of computer science that enables machines to perform tasks that typically require human intelligence, such as understanding natural language, recognising patterns, solving problems, and making decisions. AI uses techniques like machine learning (ML), neural networks, and deep learning to analyse large datasets and learn from them, often improving its performance over time.
AI’s increasing integration with blockchain and cryptocurrency enhances various aspects of these technologies. AI models analyse vast amounts of market data, and can help identify patterns and provide insights into market behaviour.
AI can also process social media, news, and other data sources to gauge public sentiment. Many decentralised applications (dapps) use AI for functions like automated lending, fraud detection, and investment management.
For instance, AI can analyse transactional data and user behaviour to detect patterns associated with fraud or malicious activity, enhancing security on blockchain networks. Machine learning algorithms are particularly useful in identifying unusual behaviours in real time, which can trigger alerts or preventative measures.
Additionally, AI systems can continuously monitor data being added to blockchains to ensure accuracy and integrity, reducing the chances of incorrect or outdated data entries, as well as fraudulent information. It can also be used to create AI agents, which can autonomously operate or perform tasks on behalf of a user or another programme.
Web3 provides a working environment for AI agents, where blockchain eliminates intermediaries from transactions through automatic execution of smart contracts, enabling AI agents to process transactions on behalf of users.
