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Every day this week we’re highlighting one genuine, no bullsh*t, hype free use case for AI in crypto. Today it’s the potential for using AI for smart contract auditing and cybersecurity, we’re so near and yet so far.

TurboToad
AI artwork for the ChatGPT written TurboToad memecoin. (Twitter)

One of the big use cases for AI and crypto in the future is in auditing smart contracts and identifying cybersecurity holes. There’s only one problem — at the moment, GPT-4 sucks at it.

Coinbase tried out ChatGPT’s capabilities for automated token security reviews earlier this year, and in 25% of cases, it wrongly classified high-risk tokens as low-risk.
James Edwards, the lead maintainer for cybersecurity investigator Librehash, believes OpenAI isn’t keen on having the bot used for tasks like this.

“I strongly believe that OpenAI has quietly nerfed some of the bot’s capabilities when it comes to smart contracts for the sake of not having folks rely on their bot explicitly to draw up a deployable smart contract,” he says, explaining that OpenAI likely doesn’t want to be held responsible for any vulnerabilities or exploits.

This isn’t to say AI has zero capabilities when it comes to smart contracts. AI Eye spoke with Melbourne digital artist Rhett Mankind back in May. He knew nothing at all about creating smart contracts, but through trial and error and numerous rewrites, was able to get ChatGPT to create a memecoin called Turbo that went on to hit a $100 million market cap.

But as CertiK Chief Security Officer Kang Li points out, while you might get something working with ChatGPT’s help, it’s likely to be full of logical code bugs and potential exploits:

“You write something and ChatGPT helps you build it but because of all these design flaws it may fail miserably when attackers start coming.”

So it’s definitely not good enough for solo smart contract auditing, in which a tiny mistake can see a project drained of tens of millions — though Li says it can be “a helpful tool for people doing code analysis.”

Richard Ma from blockchain security firm Quantstamp explains that a major issue at present with its ability to audit smart contracts is that GPT -4’s training data is far too general.

Also read: Real AI use cases in crypto, No. 1 — The best money for AI is crypto

“Because ChatGPT is trained on a lot of servers and there’s very little data about smart contracts, it’s better at hacking servers than smart contracts,” he explains.

So the race is on to train up models with years of data of smart contract exploits and hacks so it can learn to spot them. 

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“There are newer models where you can put in your own data, and that’s partly what we’ve been doing,” he says.

“We have a really big internal database of all the different types of exploits. I started a company more than six years ago, and we’ve been tracking all the different types of hacks. And so this data is a valuable thing to be able to train AI.”

Race is on to create AI smart contract auditor

Edwards is working on a similar project and has almost finished building an open-source WizardCoder AI model that incorporates the Mando Project repository of smart contract vulnerabilities. It also uses Microsoft’s CodeBert pretrained programming languages model to help spot problems.

According to Edwards, in testing so far, the AI has been able to “audit contracts with an unprecedented amount of accuracy that far surpasses what one could expect and would receive from GPT-4.”

The bulk of the work has been in creating a custom data set of smart contract exploits that identify the vulnerability down to the lines of code responsible. The next big trick is training the model to spot patterns and similarities. 

“Ideally you want the model to be able to piece together connections between functions, variables, context etc, that maybe a human being might not draw when looking across the same data.”

While he concedes it’s not as good as a human auditor just yet, it can already do a strong first pass to speed up the auditor’s work and make it more comprehensive.

“Sort of help in the way LexisNexis helps a lawyer. Except even more effective,” he says. 

Don’t believe the hype

Illia
Near founder Illia Polushkin is an expert in both AI and blockchain.

Near co-founder Illia Polushkin explains that smart contract exploits are often bizarrely niche edge cases, that one in a billion chance that results in a smart contract behaving in unexpected ways.

But LLMs, which are based on predicting the next word, approach the problem from the opposite direction, Polushkin says.

“The current models are trying to find the most statistically possible outcome, right? And when you think of smart contracts or like protocol engineering, you need to think about all the edge cases,” he explains.

Polushkin says that his competitive programming background means that when Near was focused on AI, the team developed procedures to try to identify these rare occurrences.

“It was more formal search procedures around the output of the code. So I don’t think it’s completely impossible, and there are startups now that are really investing in working with code and the correctness of that,” he says.

But Polushkin doesn’t think AI will be as good as humans at auditing for “the next couple of years. It’s gonna take a little bit longer.”

Also read: Real AI use cases in crypto, No. 2 — AIs can run DAOs

Andrew Fenton

Andrew Fenton

Based in Melbourne, Andrew Fenton is a journalist and editor covering cryptocurrency and blockchain. He has worked as a national entertainment writer for News Corp Australia, on SA Weekend as a film journalist, and at The Melbourne Weekly.

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Labour suspends MP Dan Norris after arrest

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Labour MP Dan Norris arrested on suspicion of rape and child sex offences

The Labour Party has suspended its MP Dan Norris after “being informed of his arrest”.

A Labour Party spokesperson said: “Dan Norris MP was immediately suspended by the Labour Party upon being informed of his arrest.

“We cannot comment further while the police investigation is ongoing.”

Mr Norris defeated Jacob Rees-Mogg to win the new seat of North East Somerset and Hanham in last year’s general election.

He has also lost the party whip in the House of Commons.

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Satoshi Nakamoto turns 50 as Bitcoin becomes US reserve asset

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Satoshi Nakamoto turns 50 as Bitcoin becomes US reserve asset

Satoshi Nakamoto turns 50 as Bitcoin becomes US reserve asset

Satoshi Nakamoto, the pseudonymous creator of Bitcoin, marks their 50th birthday amid a year of rising institutional and geopolitical adoption of the world’s first cryptocurrency.

The identity of Nakamoto remains one of the biggest mysteries in crypto, with speculation ranging from cryptographers like Adam Back and Nick Szabo to broader theories involving government intelligence agencies.

While Nakamoto’s identity remains anonymous, the Bitcoin (BTC) creator is believed to have turned 50 on April 5 based on details shared in the past.

According to archived data from his P2P Foundation profile, Nakamoto once claimed to be a 37-year-old man living in Japan and listed his birthdate as April 5, 1975.

Satoshi Nakamoto turns 50 as Bitcoin becomes US reserve asset

Source: Web.archive.org

Nakamoto’s anonymity has played a vital role in maintaining the decentralized nature of the Bitcoin network, which has no central authority or leadership.

The Bitcoin wallet associated with Nakamoto, which holds over 1 million BTC, has laid dormant for more than 16 years despite BTC rising from $0 to an all-time high above $109,000 in January.

Satoshi Nakamoto turns 50 as Bitcoin becomes US reserve asset

Satoshi Nakamoto statue in Lugano, Switzerland. Source: Cointelegraph

Nakamoto’s 50th birthday comes nearly a month after US President Donald Trump signed an executive order creating a Strategic Bitcoin Reserve and a Digital Asset Stockpile, marking the first major step toward integrating Bitcoin into the US financial system.

Related: Bitcoin at 16: From experiment to trillion-dollar asset

Nakamoto’s legacy: a “cornerstone of economic sovereignty”

At 50, Nakamoto’s legacy is no longer just code; it’s a cornerstone of economic sovereignty,” according to Anndy Lian, author and intergovernmental blockchain expert.

“Bitcoin’s reserve status signals trust in its scarcity and resilience,” Lian told Cointelegraph, adding: 

“What’s fascinating is the timing. Fifty feels symbolic — half a century of life, mirrored by Bitcoin’s journey from a white paper to a trillion-dollar asset. Nakamoto’s vision of trustless, peer-to-peer money has outgrown its cypherpunk roots, entering the halls of power.”

However, lingering questions about Nakamoto remain unanswered, including whether they still hold the keys to their wallet, which is “a fortune now tied to US policy,” Lian said.

Related: Bitcoin’s next catalyst: End of $36T US debt ceiling suspension

Is Satoshi Nakamoto wealthier than Bill Gates?

In February, Arkham Intelligence published findings that attribute 1.096 million BTC — then valued at more than $108 billion — to Nakamoto. That would place him above Microsoft co-founder Bill Gates on the global wealth rankings, according to data shared by Coinbase director Conor Grogan.

Satoshi Nakamoto turns 50 as Bitcoin becomes US reserve asset

Satoshi’s new addresses. Source: Conor Grogan

If accurate, this would make Nakamoto the world’s 16th richest person.

Despite the growing interest in Nakamoto’s identity and holdings, his early decision to remain anonymous and inactive has helped preserve Bitcoin’s decentralized ethos — a principle that continues to define the cryptocurrency to this day.

Magazine: 10 crypto theories that missed as badly as ‘Peter Todd is Satoshi’

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Wall Street’s one-day loss tops the entire crypto market cap

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Wall Street’s one-day loss tops the entire crypto market cap

Wall Street’s one-day loss tops the entire crypto market cap

The United States stock market lost more in value over the April 4 trading day than the entire cryptocurrency market is worth, as fears over US President Donald Trump’s tariffs continue to ramp up.

On April 4, the US stock market lost $3.25 trillion — around $570 billion more than the entire crypto market’s $2.68 trillion valuation at the time of publication.

Nasdaq 100 is now “in a bear market”

Among the Magnificent-7 stocks, Tesla (TSLA) led the losses on the day with a 10.42% drop, followed by Nvidia (NVDA) down 7.36% and Apple (AAPL) falling 7.29%, according to TradingView data.

The significant decline across the board signals that the Nasdaq 100 is now “in a bear market” after falling 6% across the trading day, trading resource account The Kobeissi Letter said in an April 4 X post. This is the largest daily decline since March 16, 2020.

“US stocks have now erased a massive -$11 TRILLION since February 19 with recession odds ABOVE 60%,” it added. The Kobessi Letter said Trump’s April 2 tariff announcement was “historic” and if the tariffs continue, a recession will be “impossible to avoid.”

Nasdaq, United States, Stocks

Source: Anthony Scaramucci

On April 2, Trump signed an executive order establishing reciprocal tariffs on trading partners and a 10% baseline tariff on all imports from all countries.

Trump said the reciprocal tariffs will be roughly half the rate US trading partners impose on American goods.

Related: Bitcoin bulls defend $80K support as ‘World War 3 of trade wars’ crushes US stocks

Meanwhile, the crypto industry has pointed out that while the stock market continues to decline, Bitcoin (BTC) remains stronger than most expected.

Crypto trader Plan Markus pointed out in an April 4 X post that while the entire stock market “is tanking,” Bitcoin is holding.

Nasdaq, United States, Stocks

Source: Jeff Dorman

Even some crypto skeptics have pointed out the contrast between Bitcoin’s performance and the US stock market during the recent period of macro uncertainty.

Stock market commentator Dividend Hero told his 203,200 X followers that he has “hated on Bitcoin in the past, but seeing it not tank while the stock market does is very interesting to me.”

Meanwhile, technical trader Urkel said Bitcoin “doesn’t appear to care one bit about tariff wars and markets tanking.” Bitcoin is trading at $83,749 at the time of publication, down 0.16% over the past seven days, according to CoinMarketCap data.

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