Cryptocurrencies with artificial intelligence (AI)

What is AI?

Artificial intelligence (AI) is a field of computer science. It should enable machines to make decisions based purely on data. The goal behind artificial intelligence is to develop machines or devices that think like humans and can thus imitate the intelligence of a human being.

Above all, ChatGPT has focused on AI in recent months. ChatGPT can write with its users about almost any topic and understand complex relationships, write texts and even program them. The results are hardly or not at all distinguishable from purely human works.

The possible applications for AI are practically limitless. So it is hardly surprising that the technology has found its way into the cryptocurrency space.

What is an AI cryptocurrency?

AI cryptocurrencies are normal tokens or coins. They are fundamentally no different from other cryptocurrencies. Instead, it is about the crypto protocols in which these coins are used. So, AI coins are cryptocurrencies used within an artificial intelligence crypto protocol.

How to store AI cryptocurrencies?

You can store AI coins just like other cryptocurrencies. You can either store them on crypto exchanges or use your own wallet. Your own wallet is much more secure, since in this case only you have the private key. On the other hand, if you leave the coins on the crypto exchange, the crypto exchange could use your coins without your consent.

If you decide to have your own wallet, you should ideally prefer a cold wallet. Cold wallets are more secure than hot wallets because hackers cannot easily attack them. However, if you forget your cold wallet credentials, you could lose your coins irrevocably.

Are AI cryptocurrencies safe?

AI cryptocurrencies are no more secure than other coins. First and foremost, we need to distinguish between financial and technical security in AI coins.

Like other cryptocurrencies, AI-based coins are also very volatile. This means that they fluctuate greatly in price. Since the market capitalization of the AI coins mentioned here is significantly lower than that of established cryptocurrencies such as Bitcoin, Ethereum or Litecoin, you are taking a potentially higher risk.

Technically, AI coins are neither safer nor more insecure than other coins. Finally, many cryptocurrencies with artificial intelligence are based on the Ethereum blockchain. How secure your AI coins are depends primarily on how you store your cryptocurrencies. They are only really secure if you keep them in a wallet whose private key you are the only person in possession of.

If, on the other hand, you store your coins on a crypto exchange, you must always trust the exchange to handle your coins carefully and not use them for other purposes.

Conclusion: This is what you should know about AI coins

Cryptocurrencies with artificial intelligence are not new. Nevertheless, they are experiencing an upswing, especially through ChatGPT. Therefore, you should be extra careful when investing in AI coins. Because it could only be a brief upswing.

With the so-called AI coins, the coin itself has nothing to do with artificial intelligence. It is about the underlying crypto protocol. However, you need the coin to use these AI-based protocols. Therefore, the value of the coins depends primarily on how often the crypto protocols are used.

Even if the courses have risen sharply in the past few weeks, you should not blindly invest in AI coins. Instead, only invest in cryptocurrencies that you see potential in. In addition, you should only invest money that you do not need for other things, such as your retirement provision. At this point we therefore recommend our article on how you can invest money in five steps.