The Era of AI Owning Cryptocurrency Wallets | Coinbase Launches Grant Program

Coinbase is spearheading a new wave of innovation by combining AI with cryptocurrency wallets through its latest grant program.

With the growing interest in AI applications within the financial sector, this initiative opens doors for automated financial transactions managed by AI.

Discover how this groundbreaking program could reshape the future of digital finance.

Introduction to Coinbase's AI and Cryptocurrency Wallet Grant Program

On August 17, 2024, Coinbase, a leading U.S.-based cryptocurrency exchange, announced the launch of a new grant program aimed at supporting projects that combine cryptocurrency wallets with AI technology.

This initiative marks a significant step in the integration of AI within the financial sector.

The grant program will distribute $3,000 each to five selected projects, totaling $15,000 in funding.

To qualify, projects must meet two primary criteria: they must involve the development of AI bots utilizing Coinbase's MPC wallet, and applications for the grant must be submitted by September 5, 2024.

Coinbase has deliberately set flexible conditions for the grant, stating that they aimed to avoid unnecessary restrictions and promote creative freedom.

The Rationale Behind the Program

Coinbase cited a key challenge in developing financial applications powered by AI: the inability of AI to acquire a bank account for automated transactions.

By utilizing Coinbase's MPC wallet, AI can now facilitate transactions on the Base blockchain, overcoming this hurdle.

An MPC (Multi-Party Computation) wallet uses encryption protocols to allow multiple parties to share control of a private key. This structure enhances security as no single entity can fully control the wallet.

According to Coinbase's documentation, the MPC wallet is presented as a secure method for providing AI with access to a cryptocurrency wallet.

AI-Driven Financial Automation

Brian Armstrong, the CEO of Coinbase, highlighted on X (formerly Twitter) that leveraging large language models (LLMs) like OpenAI's ChatGPT and Anthropic's Claude can enable the automation of financial tasks.

There are already examples of AI being integrated with wallets. On August 12, 2024, Yuga Kola, an engineer at Coinbase, demonstrated an AI-powered wallet on X.

The demo featured participants in a session for training an image recognition model who received rewards from the AI.

A report published by Bitwise, a U.S. cryptocurrency investment firm, on June 11, 2024, indicated that the synergy between AI and cryptocurrency could increase global GDP by $20 trillion by 2030.

The recent surge in AI innovation has spurred heightened interest in developing applications that combine AI with cryptocurrency.