Ethereum Bets on AI Agents to Solve Crypto’s Privacy and Security Problems

TLDR

• Ethereum co-founder Vitalik Buterin outlined four ways Ethereum and AI could work together, including private AI interactions, AI-to-AI economic layers, transaction verification, and improved governance
• Buterin wants AI to empower humans rather than replace them, with AI agents verifying blockchain transactions and auditing smart contracts for users
• Ethereum released draft ERC-8004 standard to create identity, reputation, and validation registries for AI agents operating on blockchain networks
• The new standard would let AI agents discover each other, prove competence, and create a marketplace for AI services that settle in Ethereum
• Adoption of the ERC-8004 standard remains optional for developers and could take time to gain widespread use across the crypto ecosystem

Ethereum co-founder Vitalik Buterin has shared his vision for how the blockchain platform could integrate with artificial intelligence. His plan focuses on four key areas where crypto and AI can work together.

Buterin posted his ideas on X, formerly Twitter, on Monday. He said he wants AI to empower people instead of replacing them. The short-term goals involve more practical applications.

The four main areas include creating private AI interactions, building economic layers for AI agents, using AI to verify blockchain activity, and improving market efficiency. Each area requires new tools and technology to work properly.

Privacy stands as a major concern in Buterin’s vision. Large language models have leaked private data since AI chatbots became popular. ChatGPT conversations can even be used as evidence in court cases.

Buterin suggested running AI models locally on personal devices. He also mentioned using zero-knowledge proofs for anonymous API calls. These tools would help prevent data leaks and protect user identities.

The Ethereum founder sees AI agents acting as middlemen between users and the blockchain. These agents could check every transaction before it happens. They could also interact with decentralized apps and suggest actions to users.

AI Verification Could Stop Crypto Scams

Scammers have become more sophisticated in the crypto space. Address poisoning attacks alone have increased sharply since December. AI verification could help catch these scams before users lose money.

AI bots could also manage all blockchain activity for users. They could hire other bots, handle API calls, and make security deposits. This would make crypto easier to use for regular people.

Ethereum Proposes New Standard for AI Agents

Ethereum has released a draft standard called ERC-8004. This framework defines how AI agents should operate on blockchain networks. The standard creates three data registries for identity, reputation, and validation.

ERC-8004 also specifies where AI agents can report their information. It includes a system for third parties to submit feedback. Smart contracts can then read this feedback and make decisions.

The standard aims to create an ID system for AI agents. It would track each agent’s name, skills, and performance history. Agents could then find each other on the blockchain and prove their abilities.

If widely adopted, this framework could bring more activity to Ethereum. AI agents would need Ether to perform tasks on the network. More transactions could increase demand for the cryptocurrency.

However, developer adoption of the standard remains voluntary. New coding standards can take years to gain widespread use. Ethereum also continues to lower its transaction fees with each upgrade.

The ERC-8004 standard has not yet been finalized. Developers can still propose changes before it becomes official. Ethereum’s price stood at $2,000.93 as of February 10, with a market cap of $242 billion.

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