What Are AI Agents in Crypto?

Artificial Intelligence (AI) is slowly creeping into our daily lives. So, crypto is no exception.  We all know AI chatbots. They can answer your questions, but they follow fixed rules.

On the other hand, an AI agent is more dynamic and flexible. They are more autonomous because they can adapt. So, what’s the deal with these AI agents? We’re taking a closer look at them.

What Are AI Agents in Crypto?

AI agents in crypto can perform tasks without human supervision or intervention. They can make decisions based on the flow of a conversation. So, they interact with the information they receive and how the conversation goes.

In other words, this is much more dynamic than a chatbot. It adjusts its answers based on the feedback it receives. The picture below shows the workflow of such agents.

Source: Crypto.com

AI agents are flexible and autonomous, and they learn from available data. They can adapt to altering circumstances. Some samples are ChatGPT or Google Assistant. In a real-world setting, think of Tesla Autopilot, a self-driving technology. 

So, in crypto, AI agents interact with blockchain protocols. A good sample is Truth Terminal (ToT) or Luna. We recently published a video and website article covering ToT. These agents can perform various tasks, like:

• Trading.
• Swap tokens.
• Manage your portfolio.
• Market analysis.
• Engaging with DeFi platforms.

As a result, they can optimize your strategies and reduce your risk exposure. For example, they reduce manual errors. So, they automate your financial management. Whilst they make trades on your behalf, you can relax and kick back. It’s like a personal financial assistant. It doesn’t only trade on your behalf but can also make payments or bookings and so on.

They can also execute large numbers (millions) of transactions at the same time. Furthermore, they do this in a fast and efficient way. Coinbase now offers a way to set up your AI agent within minutes. This is their ‘Based Agent‘ feature.

AI Agents Risks in Crypto

As with most crypto-related activities, there are also some risks to be aware of with these agents. Here are some samples,

• Algorithmic bias — The agents can favor specific narratives. This can lead to creating echo chambers. As a result, it can deceive investors about an asset’s value.
• Pump-and-dump schemes — Bad actors can use the agents for these schemes. 
• Security risks — Once a bad actor can compromise an agent, your assets may not be safe anymore.
• Regulatory issues — Currently, there’s no accountability for actions taken by these agents.

Conclusion

AI agents are a step up from AI bots. Where AI bots generally follow specific fixed rules. On the other hand, AI agents are more flexible and autonomous. They’re more dynamic in how they deal with and handle situations. They analyze real-time data and act accordingly. As a result, they can onboard new crypto users.

Disclaimer

The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment and informational purposes only. Any information or strategies are thoughts and opinions relevant to accepted levels of risk tolerance of the writer/reviewers, and their risk tolerance may be different from yours.

We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments, so please do your due diligence.

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