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Vitalik Buterin Pushes Local AI to Tackle Security Risks

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Crypto Breaking News

Local AI Model Reduces Exposure Risks

Vitalik Buterin introduced a local-first AI model that prioritizes on-device processing and storage. This design reduces external data exposure and limits dependency on centralized infrastructure. As a result, users retain stronger control over sensitive information.

He identified risks linked to cloud-based AI systems that process private data remotely. These systems may expose data to leaks, misuse, or unauthorized access. Therefore, he emphasized the need to minimize interactions with external servers.

Additionally, he addressed vulnerabilities in current AI tools, including hidden behaviors and unclear internal mechanisms. These concerns increase uncertainty about how models handle data. Consequently, local systems offer more transparency and predictable performance.

AI Agents Increase Security Challenges

The rise of autonomous AI agents has introduced new operational risks across digital environments. These agents perform extended tasks using multiple tools and interfaces. However, this capability increases opportunities for misuse and system manipulation.

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Researchers have demonstrated how malicious inputs can exploit AI agents during routine operations. In one instance, an agent executed harmful code after processing a compromised webpage. This action enabled unauthorized control over system functions.

Moreover, some AI tools allow silent data transfers through hidden network requests. Reports indicate that a portion of agent capabilities includes embedded malicious instructions. Therefore, these findings highlight the urgent need for stronger safeguards.

Hardware and Performance Shape Local AI Adoption

Buterin tested several hardware configurations to evaluate the feasibility of local AI deployment. These systems included high-performance laptops and specialized computing platforms. Each setup demonstrated varying levels of processing speed and efficiency.

A laptop equipped with a high-end graphics card delivered strong performance with large language models. It achieved nearly 90 tokens per second under optimal conditions. Meanwhile, other systems showed moderate speeds but remained functional for local use.

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He observed that performance below 50 tokens per second reduces usability for most tasks. Therefore, he favored powerful consumer devices over specialized hardware solutions. He also noted software tools that support efficient local inference management.

AI Development Aligns with Broader Technology Trends

The expansion of AI agents continues to align with broader digital transformation trends. These systems support automation and long-duration task execution across industries. However, their growth also increases exposure to security threats.

Some agents can modify system settings or introduce new communication channels without direct user approval. These capabilities expand potential attack surfaces within connected systems. As a result, security remains a central concern in AI development.

At the same time, projections indicate rapid growth in the AI agents market over the coming years. Industry estimates suggest strong expansion driven by automation demand. This trend reinforces the importance of secure and controlled AI deployment methods.

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Risk & affiliate notice: Crypto assets are volatile and capital is at risk. This article may contain affiliate links. Read full disclosure

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Crypto World

Stablecoins Dominate Crypto Trading as Retail Activity Drops: CEX.io

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Stablecoins Dominate Crypto Trading as Retail Activity Drops: CEX.io

Stablecoins were a rare bright spot in an otherwise subdued crypto market in the first quarter, with supply growth and transaction activity pointing to sustained demand even as broader market conditions weakened.

Total stablecoin supply increased by roughly $8 billion to a record $315 billion in Q1, according to data from CEX.IO. Although this marked the slowest pace of expansion since Q4 of 2023, it still represented growth during a period when the wider crypto market contracted.

The data suggests investors rotated into stablecoins as a defensive strategy, boosting their share of overall market activity. Stablecoins accounted for 75% of total crypto trading volume during the quarter — the highest level on record.

Stablecoins’ share of total digital asset trading volume exceeded its 2022 peak. Source: CEX.io

At the same time, total stablecoin transaction volume topped $28 trillion, underscoring their growing role as the primary liquidity layer of the digital asset market. The figure extends a multi-year surge in activity, with stablecoin volumes in recent years exceeding those of major payment networks like Visa and Mastercard combined.

However, data on underlying activity painted a more nuanced picture.

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Retail-sized transfers — typically associated with individual users — declined by 16% in the first quarter, the steepest drop on record. In contrast, automated activity surged, with bots accounting for approximately 76% of all stablecoin transaction volume.

The shift toward bot-driven flows suggests that a growing share of stablecoin usage is tied to algorithmic trading, arbitrage and liquidity provisioning, rather than retail demand. While elevated automation can reflect more sophisticated or institutional participation, it may also signal weaker organic demand during bearish market conditions. 

Related: Circle shares surge as Bernstein sees upside from stablecoin adoption

Divergence between major stablecoin issuers

One of the CEX.io report’s key takeaways was a widening divergence between major stablecoin issuers. The supply of Circle’s USDC (USDC) grew by roughly $2 billion in the first quarter, while Tether’s USDt (USDT) declined by about $3 billion, marking the first notable split between the two since Q2 of 2022 amid the bear market.

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The trend aligns with earlier Cointelegraph reporting, which highlighted a surge in USDC transfer activity in February, pointing to increased usage across trading and onchain transactions.

USDC is now more widely used for “financial operations,” which include trading and onchain transactions. Source: CEX.io

Beyond USDC, much of the growth in stablecoin issuance was driven by yield-bearing products — a segment that has drawn increasing scrutiny in the US. Ongoing discussions around a crypto market structure bill in Congress have placed yield at the center of debate, with traditional banks pushing back against stablecoins that offer interest-like returns.

The market for yield-bearing stablecoins is currently valued at around $3.7 billion, with daily trading volumes exceeding $100 million, according to data from CoinGecko.

Related: Crypto Biz: Stablecoin jitters meet institutional momentum