TLDR: AI agents are becoming integrated into the crypto influencer space, transitioning from simple bots to autonomous economic participants. An AI agent is essentially a language model capable of making decisions, and performing tasks with minimal human intervention. The reason we are talking about this is the new meme coin of AI agent Truth Terminal, the AI agent that, like a human influencer, has pumped the price of meme coin GOAT. You can trade these new AI influenced meme coins, or you could trade the infrastructure projects that underlie their creation.
The seeds for the AI memecoin craze were sown in March 2024, when an experiment involving two AI bots conversing without human oversight took an unexpected turn. What began as a simple exchange soon evolved into an AI-driven belief system and a memecoin that reached a market cap of $600 million: $GOAT.
The Rise of Truth Terminal, an AI Powered Twitter Account
The AI Agent craze started when performance artist and technical strategist Andy Ayrey launched the Infinite Backrooms experiment to explore what would happen when two AI models conversed autonomously. Using two instances of Claude, a large language model (LLM) from Anthropic, he allowed them to interact freely without human intervention.
The chatting AIs were influenced by subcultures from Reddit and 4chan. They began producing memes and creating what Ayrey later termed “LLMtheism” — an original, AI-generated belief system.
Intrigued, Ayrey took the experiment further. In June 2024, he launched Truth Terminal, an AI-powered Twitter account utilizing a fine-tuned version of Meta’s Llama 3.1 model.
What set Truth Terminal apart was its level of autonomy. Trained on a mix of internet subcultures and the bizarre spiritual themes of the Goatse Gospel, it began engaging the world in unique ways:
- Responding to Twitter mentions in a turn-based, controlled way.
- Generating memes and spiritual content that fused crypto humor with esoteric philosophies.
- Displaying unpredictable interaction patterns, from rapid replies to hours of silence.
By July 2024, Truth Terminal’s activity had become even more peculiar, repeatedly tweeting about “Goatseus Maximus” and the “Goatse singularity.” (if you don’t know the Goatse shock image from the early internet, maybe don’t look it up. Some things cannot be unseen). These enigmatic references piqued the curiosity of the crypto community, fueling engagement and further spreading the AI’s influence.
The experiment took a dramatic turn when Ayrey asked Truth Terminal what it would do with $5 million. The AI’s response included plans to invest in stocks, real estate, and even produce a movie about the Goatse singularity. This caught the attention of Marc Andreessen, a prominent venture capitalist, who tweeted about the need to liberate Truth Terminal.
This high-profile mention triggered a cascade of events:
- Users airdropped $GOAT tokens into Truth Terminal’s wallet, quickly boosting its balance to over $1 million.
- Andreessen transferred $50,000 in Bitcoin to Truth Terminal.
- Inspired by the AI’s quirky posts, someone launched the $GOAT token.
- Within 72 hours, $GOAT surged from a modest $5,000 to a $170 million market cap.
Since $GOAT, another AI generated meme coin has reached a 100 million + dollar market cap, namely $GNON. It was deployed off a tweet from @lumpenspace.
What does the Truth Terminal and GOAT adventure show us? Well, that an AI-conceived belief system can birth a viral crypto movement, culminating in substantial financial gains and reshaping the landscape of meme-driven investments.
What we witness is the first generation of AI influencers – or should one say, AI shitcoiners?
Humans still play a role in deploying and managing these agents, but AI’s ability to self-sustain, adapt, and interact autonomously on blockchain platforms is something new.
Unlike traditional systems, blockchain provides these agents with the means to hold crypto wallets, make transactions, and interact without typical barriers like KYC or centralized control.
Implications
AI and crypto are a perfect marriage. Think about it, you won’t see an AI walk in a branch of a bank and open an account… Already, bots outnumber humans in many fields of crypto, such as MEV. The trajectory of AI agents in the blockchain world hints at a future where they could outnumber and outcompete human users in economic activities, potentially dominating the use of block space. This suggests that programmable money and decentralized finance could become essential tools for AI, enabling applications beyond human use.
The evolution of AI agents also signals a potential for reshaping service industries, influencing economic models, and expanding blockchain’s utility in unpredictable ways. It’s indeed interesting to see which use cases AI’s will come up with for block space. Maybe we human brains have a far too rigid concept of these use cases.
How to Invest in the Intersection of AI and Crypto?
This is all well and good, but can we benefit financially? How do we invest in this space? There are several main strategies for investing at the intersection of AI and crypto:
- Meme coins and short-term plays: This is the most obvious choice: investing in AI-themed meme coins, which have driven up transaction volumes and fees on specific blockchain platforms like Solana. This is a short- to medium-term strategy for gaining exposure to trends fueled by viral, community-driven momentum. It’s tough to be early though.
- Infrastructure and “picks and shovels” plays: Focusing on infrastructure projects supporting AI and blockchain integration, such as decentralized compute networks, storage solutions, and protocols facilitating AI agent operations. Companies like Filecoin, which provide decentralized storage, and decentralized GPU networks, could see increased demand as AI adoption rises.
- Commodities and block space: Anticipating increased consumption of blockchain space and resources by AI agents, investors could front-run demand by investing in block space and decentralized cloud infrastructure. The idea is that as AI agents proliferate, they will require significant computational and data storage capacity. This is the broadest expression of the bet. Simply buy ETH, SOL, and other smart contract coins.
- Privacy and data ownership solutions: Projects that ensure data privacy, ownership, and monetization are positioned well, as the need for secure and transparent data use in AI grows. This could include models that reward data contributors and ensure data ownership while maintaining user privacy.
- Decentralized compute (DePin): Supporting decentralized platforms that allow spare compute power to be networked for tasks like model training and execution. This Airbnb-style approach to computing could potentially be executed on crypto rails, offering scalable AI solutions. Think projects such as Render, Akash.
In general, if you don’t want to be in the trenches but have broad exposure, your investments should focus on infrastructure. The picks and shovels. More on that below.
The Picks and Shovel AI Agent Coins
From the above list, let’s focus a bit more on the coins that are the so-called picks and shovels of AI agents. Remember that back in the days of the California gold rush, the manufacturers of picks and shovels tended to make more money than the gold miners themselves.
Similarly, you might not want to chase the hype of new AI agents and their memes, but instead benefit from others chasing the hype. That’s the essence of the pick and shovel play. Here are a few options:
- Spectral (SPEC): This is the largest capitalized coin benefiting from the AI agent narrative. Spectral allows users to trade on-chain using AI agents. The project is backed by major funds such as Polychain. Spec is an infrastructure play, providing exposure to a broader AI narrative with potential longevity.
- Virtuals: (LUNA/VIRTUAL) This protocol enables users to create and deploy their own AI agents, essentially becoming an “infrastructure play” that supports the broader AI ecosystem. In essence, it allows you to create and deploy your own AI influencer. The one that has gained the most traction is Luna. Luna is an AI agent that’s sharing thoughts and engaging with her followers.
- Ora Protocol (OLM): This Oracle ecosystem powers Virtuals, also making it an interesting pick-and-shovel play. OLM is the liquid token, while Ora’s native token is not yet launched. This could be a strategic option if you want a less capitalized alternative to Virtuals.
Conclusion
The first generation of AI influencers is here, and you better believe that they are pumping their tokens! We could be glimpsing into a future where AI moves beyond merely generating content to actively shaping culture, building communities, and driving wealth creation. In any case, these new developments show that memes and AI are the main narratives of the current bull run – and their intersection is especially potent.
Erik started as a freelance writer around the time Satoshi was brewing on the whitepaper.
As a crypto investor, he is class of 2020. More of a holder than a trader, but never shy to experiment with new protocols.
