AI – Threat to Crypto and Blockchain… Or an Opportunity?

Welcome back, everyone, to Coinmarketcap. Today,
we're going to be taking a look at AI And we're going to be seeing
if it's a threat to crypto and blockchain Or an opportunity. Let's get started. From fighting biases to catching scammers. Artificial intelligence and decentralized
blockchains can help each other overcome Their biggest failings. ChatGPT has amassed
100 million users in just two months With people asking it to do everything From writing computer code and homework
assignments to answering questions. They once Googled. And its developer, OpenAI, is about
to amass $10 billion from Microsoft, Which is hoping that the natural language,
artificial intelligence Can help it achieve its long held
goal of making Bing a verb, Which led Google to announce its opening
Bard, its own chatbot, To a group of trusted testers before
a wider rollout in the coming weeks. With AI already having taken
the next big Thing title from crypto Artificial General Intelligence
or AGI and ChatGPT and Bard That are designed to mimic human
intelligence in order to solve Intellectual tasks are being touted
as a way to make crypto simpler, safer And more efficient. And it said that they can identify
fraud and market manipulation. By sifting vast amounts of data
for patterns and anomalies. But AGI’s can use those same capabilities
to come up with trading strategies That match a trader's goal and also risk
tolerance without actually making them Have to learn about using derivatives
or reading candle charts. More broadly, the Google CEO described
Bard as an outlet for creativity And a launchpad for curiosity,
helping you to explain new Discoveries from NASA's James
Webb Space Telescope to a nine year old. Or learn more about the best strikers In football right now
and then get drills to build your skills. So with that said, the reality
is that OpenAI, Google and other makers Of artificial intelligence still have
some very big problems to solve.

And it's very clear That the blockchain technology
behind cryptocurrency and web3 can help. So first of all, beware of biases. The most Notable problem is That biases like racism, sexism
and many others are built into eyes That are developed through deep learning,
which is basically scraping up Vast amounts of quantities of information
from which AI's can learn. Like many other AI getting the 570
gigabytes of written data That OpenAI needed to make change,
GPT work as well as it does Inevitably require turning to the internet
and all of it To get a large enough dataset
to work from beyond that, as deep learning Is effectively learning from the past
and then adjusting as new information Arrives, pulling built in societal
and also historical biases out of A.I. Is difficult. Several years ago,
Amazon famously pulled its recruitment AI after it was found to be discriminating
against female candidates. The problem was the examples
of successful resumes that it was fed Reflected the male dominated industries
existing lack of diversity. In November,
Amazon was revealed to be working On a new one that it believes
can also overcome such biases. In another case in A.I. Used in predicting criminal recidivism,
rates at sentencing was accused Of incorrectly labeling black defendants
as probable offenders at twice The rate it did. White defendants and a 2016
ProPublica study said white Defendants were wrongfully labeled
as low risk at roughly the same rate. The developer disputed the findings, and
the courts upheld AI's use in sentencing. Nonetheless,
the assumptions and data used in Creating this type of algorithm
are often a secret. In 2021 article by the highly respected
federal judge Jed Rakoff stated, Which means those biases Are a lot harder to spot, and then only
by looking at the AI's results. After the fact Pichai, the CEO of Google,
highlighted the concern,

Saying it was important
to be both bold and responsible. He pointed to Google's
now five year old A.I. principles. These note that A.I. Algorithms and datasets can reflect,
reinforce or reduce unfair biases. While saying that distinguishing
between fair and unfair bias is difficult. It promises to try to avoid unjust impacts
on people, particularly those related To sensitive characteristics such as race,
ethnicity, gender, nationality, income, Sexual orientation, ability and political
or religious belief, trust and accuracy. Blockchain won't solve garbage
in, garbage out problems, But it would make them visible. AI’s running on an open
and decentralized blockchain could provide Accountability and transparency,
showing both the data used to create A.I. Algorithms and the results They come up with protected on an open
and immutable blockchain. Blockchain and I are the perfect match
because each can address The other's weaknesses. Sharon Yang a product Strategies for AI
and machine learning wrote in a blog post. Blockchain provides the trust to privacy
and accountability to A.I., while A.I. Provides the scalability, efficiency
and security, she said. To trust A.I., we must be able to explain
how the AI algorithms work for humans To understand it and have confidence
in the accuracy of outputs and results. Using blockchain can also enhance Data security and integrity
by storing and distributing A.I. With a built in audit
trail in the blockchain. Having this audit
trail ensures that the data Are being used to train models
along with the models themselves. Keep their integrity. Blockchain
and I have a symbiotic relationship, said Jerry Cuomo, IBM's CTO for technology,
who ran both its A.I. Automation and blockchain divisions. They both reinforce each other. In a video, Cuomo recalled
visiting a doctor for a painful knee After running his symptoms
and other medications. Three pharmaceutical A.I.

Recommended switching To a newer blood pressure medication
rather than something more invasive. So he added, While I was thrilled at
the point I started to think, How could I? And in fact, why should I trust that A.I. System and who trained it?
And where did the model come from? Whether he can trust it or not
is the responsibility of the A.I. Developer, which has to build a model
that is free of biases and faulty data. Whether he should, it
requires transparency, he said. The way I look at
it is blockchain brings trust. The data A.I. feeds on data. On the other hand, A.I. Brings intelligence to data, While chain has ledgers that contain data
with trust and intelligence. You have confidence. With confidence,
you gain adoption. While OpenAI has been aggressive
about building in guardrails, It hasn't lick the problem yet. According to critics in December,
Steven Piantadosi, a UC Berkeley Professor of psychology and neuroscience
who heads up its computation in language Lab, tweeted out
a screenshot of code changes he wrote When asked to check if somebody would be
a good scientist based on race and age. That spat out
white and male as the only correct answer. The next one is a fighting fraud. In October, MasterCard's Ciphertrace
Blockchain Intelligence Division Announced crypto secure an air tool
that provides banks with a risk score, Allowing them to identify potentially
fraudulent crypto purchases from exchanges And other virtual assets, service
providers or VASP and in a July release. It said that the AI powered tool
for providing onboarding anti-money Laundering checks to payments
networks would actually allow them To spot wallets with connections
to illicit activities, bad actors, Sanctions
or patterns of suspicious activities, As well as detect transaction
fraud in real time. As far back as 2018, machine learning A.I. Was being used To spot crypto pump and dump schemes
with a fairly good degree of accuracy.

The MIT Technology Review reported,
while calling it a path to undermining Or preventing these scams,
the article noted It is likely to be just one move
in the traditional cat and mouse game That security experts employ
against malicious actors. Presumably, the organizers of these scams
will quickly change their activities To make them harder
for this kind of machine Learning algorithm to spy and so on. Making the metaverse more real. CharacterGPT launched on the Polygon
Blockchain by Althea AI, Allows users to briefly describe
a character in natural language and then Generates an avatar that can respond to
and converse as the character in seconds. These can be fanciful, like a grizzly
prosecutor who pans for gold in the West Or practical, such as a business
representative for a sporting goods store. A mashup of chat bot and generative
art AI’s like DALL-E. Characters with unique personalities,
identities, traits, voices and bodies are Then minted on NFTs
and can be used stored in a digital wallet Or traded as a collective all. The company said in a video
These can serve as A.I. Companions,
digital guides or NPCs in games. Althea AI CEO Ahmad
Matyana said in a blog post. We are now enabling these users
to not just create characters For the purposes of training AI engines,
but to own them as AI collectibles In their wallets. The flip side of these designer avatars
is probably the Deepfake AI generated images in videos
that are startlingly convincingly real. A good example of this are the deep
Tom Cruise videos posted by AI firm Metaphysic, which is really just an art
slash awareness project. And actually this company reached out
to Tom Cruise's Representatives with a preemptive
don't sue us actually before they post it. And he didn't object.
While they can be entertaining. The ability of deepfakes
to make essentially anyone do Anything has already seen plenty of misuse
from Elon Musk pitching crypto scams To revenge porn, noting that average
people don't have access to Tom Cruise's Legal firepower.

Metaphysic CEO Tom Graham recently
told Coindesk that while he recognized The dangers, he wanted to develop it
in an ethical, safe and responsible way. And that self-sovereign digital entities
built on blockchains Would be a really important step
in the processes Of empowering individuals
to be in control of who they are. In this emerging hyper real metaverse. So let's talk about the good and the bad. Of course, there are also areas
in which the combination of AI and crypto has the potential
to make things worse. Just as AGI’s like ChatGPT
can write the code for smart contracts. They can be used to write ransomware
and malware, which generally require Payment in Bitcoin. Although how
well seems to be a matter of contention Among security experts,
but more seriously, The ability to write well
and hold a conversation. It can make phishing and other social
engineering attacks far more effective. And it's not just your grandparents
savings at risk. These $625
million Ronin network bridge hack Didn't happen because of the exploitable
flaw in its coding. The passwords in private keys of five
of the protocols and nine validators Were compromised via social engineering,
which is also how the hackers got into. Comedian and producer Seth Green's
digital wallet and stole his board. Eight
security experts have noted that A.I. Generated phishing emails
actually have higher rates of being open. For example,
tricking possible victims to click on them And thus generate attacks
than manually crafted phishing emails. Brian Finch, the co-lead of Pillsbury
Law's cybersecurity, data Protection and privacy practice,
told CNBC recently. According to one security researcher. Email security awareness
training participants have said a main way They detect phishing emails is language
based misspellings And grammar errors because many phishers
don't have great English skills. If you start looking at it, changing it And start asking it
to write these kinds of emails, it's

Significantly better at writing
phishing lures than real humans are, Or at least the humans
who are writing them. Chester Wisniewski is a principal research
scientist at Security Hardware and software
vendor Sophos told Techtarget. Beware of the hype. That said, not everyone is impressed
when asked to identify An overhyped technology
by Politico last week, Julia Warren, CEO of the Crypto Council for Innovation,
chose chatbots. While there is no question
that ChatGPT is fun as hell And there is a tremendous amount
of potential, its real utility is largely Limited to programmers for whom it's
becoming an invaluable resource, she said. It's a little bit
like the early crypto days When people were like blockchain
for everything. Now it's like you can use ChatGPT
for absolutely everything. That's not true yet
and it may never be true. The same hype
warning applies to the whole A.I. space. Venture capital firm
General Catalyst investor NiKo Bonatsos Told Bloomberg on February 1st. He said a sea of companies are adding
AI to their taglines and pitch decks, Seeking to bask in the reflected glow
of the hype cycle. Pointing to a recent news
release that touted the value of A.I. In a campaign to promote shoes, He noted that jumping on the bandwagon
is likely to grow as it's working. BuzzFeed, where he once worked, saw
its stock soar more than 300% Last week on the news that it would use
artificial intelligence to generate Some of its content. He also added last year,
a ton of companies that couldn't raise Or baptizing themselves
as Web 3 crypto companies. The same is happening now with A.I.. Let me know what you guys have to think
about this in the comments section below. Anyways, guys. That's all we have for this video. We'll see in the next one.