Is the combination of blockchain and AI setting the stage for the largest tech bubble yet?

The AI narrative was kicked off by OpenAI's launch of ChatGPT and then reinforced by the rise of Nvidia, which is driving advances in AI and data centre operations.

At the same time, we are seeing the start of the next bull cycle in crypto.

So what happens when you combine these two hype cycles?

Potentially the biggest bubble of all time.

There are 4 different categories that we can navigate through and avoid getting crushed.

• Blockchain business using AI
• AI companies using blockchain
• Blockchain businesses that will benefit from the AI revolution
• Businesses using blockchain and AI for new innovations

1?? Blockchain businesses using AI

This is the most misunderstood category at the intersection of AI and crypto.

It involves blockchain companies that use AI to improve their operations. These companies are not just about AI, they are using it in the same way that any modern business uses the internet.

Example: LimeWire

LimeWire provides creators with AI tools to create music and visuals, while also using blockchain (the $LMWR token) to share up to 90% of advertising revenue with creators.

Thanks to the AI hype, $LMWR has doubled in price since the beginning of the year.

2?? AI companies using blockchain

This part is about AI companies that are starting to use blockchain.

AI companies are using blockchain for security, crypto payments and new opportunities. Some aim to attract crypto enthusiasts for growth.

Example: Worldcoin

World aims to create a blockchain-based identity system for the AI world. $WLD is up 8x since September, with a market cap of $1.5 billion and a fully diluted market cap of $100 billion.

3?? Blockchain businesses that will benefit from the AI revolution

The greatest opportunity lies in companies with existing products that could gain popularity as a result of the AI trend.

Blockchain companies can play a key role by providing essential services for AI technologies to flourish.

Example: Ocean Protocol

Ocean Protocol is a data exchange that allows data to be shared, bought and sold in a secure and transparent way.

What's the number one thing AI needs to work? Data.

Thanks to the rise of AI, Ocean Protocol has found a whole new customer base that's able to amplify its business model.

As a result, $OCEAN has already surpassed its all-time high in market capitalisation from the last cycle, when AI wasn't really a thing.

4?? Businesses using blockchain and AI for new innovations

This is where we unleash our imagination and imagine the future.

Here are 4 innovations enabled by AI and crypto that could shape the world and the internet in the future.

Note: development may take years and market fit is uncertain.

AI-driven DAOs

Imagines a future where AI manages the treasuries of decentralised organisations and optimises financial decisions.

Example: Bittensor

You can think of Bittensor as the decentralised equivalent of OpenAI, where data is public and governed by a community rather than a handful of people.

Keep in mind that this isn't an apples-to-apples comparison, as OpenAI has a much larger pool of data to work with than Bittensor. They're also much, much further along in development.

AI running decentralised protocols (DAO's treasuries run by AI)

Imagine if AI could run the investment strategy for the treasuries of crypto protocols like MakerDAO or Uniswap, with the goal of making as much money as possible from their multi-billion dollar treasuries.

AI can crunch a lot of data, so it should come up with some ingenious moves that humans can't even think of to help these protocols grow and make more money.

It's a cool glimpse into what could be a reality if AI took over certain crypto protocols. But since no one has really done it on a large scale, we're all just guessing what could happen.

AI Agents

AI agents are advanced programs that can streamline travel planning, create content, manage finances, and more.

To be truly useful, they need payment capabilities, which is where cryptocurrency comes in.

Example: Fetch.AI

Fetch.ai is one of the companies at the forefront of this category, creating a unique digital world where AI agents can perform tasks on their own, while using crypto for payments. Fetch.ai token has also seen over 500% growth since its inception.

AI Crypto Gaming

Being a gamer myself, this is probably the most interesting area for me. AI is already changing gaming, from AI-generated maps and worlds to AI-controlled NPCs. But add a blockchain to the mix and you get something like Parallel Colony.

Example: Parallel Colony

This game is a survival simulation uniquely powered by generative AI (still in development).

You start by shaping the personalities of your own AI agents by asking questions.

As the game progresses, these agents may act in unexpected ways, following their own unique logic and decisions. You can suggest what they should do, but they decide their own actions by performing tasks such as gathering and trading resources.

These avatars have digital wallets for which you, the human player, manage the private key, ensuring a mix of autonomy and control. But ultimately they make their own decisions.

This game is part of the wider Echelon Prime ecosystem, which is powered by $PRIME, a token that's risen 1,000% in the last year thanks to the AI hype it's generated.

Final thoughts

The world of AI is still very new, and even ChatGPT isn't that great of a product. It's going to take years for AI and these companies to really crack the code and take over the world, as many of us have been told.

It's not going to happen overnight, and probably not even in this cycle.

This means that whenever this bull market ends, most of these AI crypto projects will have minimal adoption, user base and revenue, if they even have a working product by then...

Yet most of them will be valued in the billions because that's what we do in crypto.

There's no doubt that the synergy between crypto and AI will create some of the biggest new innovations and use cases we've ever seen in tech, so it's important to stay informed and do your research in the sector.

There's also no harm in playing around with these projects and investing in their tokens, as long as you know what you're doing and realise that most of it is already overvalued relative to the fundamentals.

AI and crypto are here to stay, but token prices are currently being driven by narrative and many will be wiped out when the cycle ends, so be careful and good luck!