Effects of AI on NFTs

Artificial intelligence applications are finding more and more uses in more and more technological niches. One of these is the world of NFTs (non-fungible tokens). There can be several effects of AI on NFTs. AI may make some NFTs more useful, attractive, or more valuable. There may end up being virtually infinite variations within the NFT world due to the ability of AI mass production while also creating variety. On the other hand, AI may simply end up clogging up the NFT marketplace with millions of variations on any given NFT theme and crowding out any individual creativity.

What Will AI Do to Creativity in the World of NFTs?

Be In Crypto sees AI fueling a surge in NFT digital creativity while at the same time adding computing power to NFT niches like sports. The addition of an intelligent entity holds the potential to widen NFT markets, increase opportunities, and generate totally new business models. The flip side of this argument is that an AI app with virtually unlimited capacity may generate millions of versions of any given NFT, dilute the market, and shrink NFT values. How valuable would an early Picasso painting be if he had used AI to create thousands of variations of every single work of art?

Mixing Art and NFT Business Functions with AI

Decentralized finance and, to an increasing degree, the world of NFTs use smart contracts. AI holds the promise of making such contracts smarter and far more common in NFT-related transactions. The role of artificial intelligence in NFTs is already moving beyond creativity and endless variations on any given theme. AI will let NFT creators and traders fine tune their work to target a profitable niche and fine tune their pricing to maximize profits. As AI becomes increasingly integrated into the NFT world we will see innovations like the GPT-3 language model prompt (generative pre-trained transformer 3) within smart contracts themselves. This sort of all-in-one system will let people create NFTs with the same software apps that they use to market their NFT products, determine pricing, and even determine which types of new NFTs to create based on current market conditions.

AI and Interactive NFTs

The ChatGPT AI app has taken the world by storm. It is capable of carrying on human-like conversations with real live people. This sort of technology opens the doors to interactive NFTs and a much wider range of NFT experiences than seen in digital artwork, sports video clips, and the like. Because of the innate creativity of an advanced AI app, this sort of NFT has the potential to create new “content” over time. It also runs the risk of replicating the content of other NFTs which could create copyright issues. Another issue, noted by a New York Times reporter, is that an AI app can seem a little crazy at times. This was noted when the reporter entered into a prolonged chat with the ChatGPT app at the end of which the app suggested that the reporter leave his wife and come to live (in cyberspace?) with the app! This sort of interaction raises the risk of serious harm and legal issues if a person who purchases an advanced, interactive NFT app ends up being convinced to hurt themself.

Will AI Make NFT Art Better or Simply Create More of the Same?

We have made the point before that making money in the art world requires knowledge, judgment, an eye for what will become popular down the line, and a fair amount of luck. NFTs are, at their core, collectibles like works of art. A Rembrandt painting is not only valuable because it is a great work of art but because it is one of a kind. A basic issue that we see with the introduction of mass production capacity of AI into the NFT world is that every possible of variation of every possible NFT will be generated. There may not be any unique NFTs left when AI is done with the NFT world and the NFT art ecosystem.

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