Ethereum (CRYPTO: ETH) co-founder, Vitalik Buterin, on Tuesday shed light on the potential integration of artificial intelligence (AI) with cryptocurrency. 

What Happened: Comparing AI’s role to that of a participant in a video game, Buterin sees trading bots on blockchain-based exchanges as an established example of AI’s involvement in the crypto space.

He wrote in a blog post, “This use case has existed for a long time, even with much simpler AIs than what we have today, but ultimately it is a very real AI + crypto intersection.”

Buterin envisions an array of future applications, such as AI participants in prediction markets like AIOmen, which could energize these markets with much-needed liquidity. He credits AI’s expansive knowledge and ability to take risks where others may not for this potential.

Beyond trading, AI could serve as a guide for the uncharted territories of crypto, aiding users in understanding the space. Drawing from the example of the MetaMask crypto wallet, which provides warnings on shady websites and dapps. 

 “AI could give a much richer human-friendly explanation of what kind of dapp you are participating in… whether or not a particular token is genuine… and so on.”

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Why It Matters: However, Buterin also cautions against the dangers. The transparency of open-source software in crypto might allow individuals to exploit AI systems. An AI integrated into an open-source wallet might be meticulously analyzed by hackers to design scams that evade AI detection.

Addressing the complexity of incorporating AI as a decision-maker in blockchain processes, Buterin acknowledges that while tools like zero-knowledge proofs could offer some solutions, they would only amplify AI’s computational demands and vulnerability to manipulation.

Buterin remains optimistic about overcoming these challenges, concluding, “I look forward to seeing more attempts at constructive use cases of AI in all of these areas, so we can see which of them are truly viable at scale.”

Earlier, on Jan.16, Buterin, said blockchain’s validiums are not genuine rollup solutions.

The discussion comes amid Buterin’s proposal to increase Ethereum’s block gas limit by 33.3%, a move intended to enhance the network’s capacity, on January 12, 2024.

Photo by Alexey Smyshlyaev on Shutterstock.

Price Action: At the time of writing, ETH was trading at $2,340, up 1.13% in the last 24 hours, according to Benzinga Pro. 

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