AI and Blockchain
Perhaps everyone would agree that Artificial Intelligence and Blockchain are two of the most exciting technologies that have ever graced in world of technology. Blockchain and AI are becoming the backbone of the 4th Industrial Revolution. The past decade bore witness to their evolutions, with both giving births to a number of significant innovations across a variety of industries. But while both technologies are tackling their respective paths, the idea of combining them couldn’t just be put away by tech buffs in the corner. Why is it particularly intriguing?
According to Gartner, one of the leading research and advisory firms in the world, it wouldn’t be long for these two technologies to build markets that are worth billions. As estimated, the demand for artificial intelligence or AI would be worth around $4 trillion in three years, while the Blockchain industry could grow to around $23 billion in 2023.
The emergence of real use cases, courtesy of both technologies, had paved the way for increased adoption all over the world. Perhaps, Gartner has a reason to believe that the growth rate would be tremendous in the coming years, as more and more people begin to embrace innovations.
AI, in essence, is not a new technology. However, the spike in interest for AI had only been noticeable in the last two years. Although the development of fully thinking machines is still a work in progress, this technology had already proven itself a valuable tool in an array of industries, particularly in healthcare, manufacturing, sales, and marketing. A growing number of businesses had also incorporated AI in their business roadmaps for the years to come.
Mckinsey & Company, a US-based consulting firm reported that, 47% of companies that participated in their survey revealed that they are already using AI in their operations. Meanwhile, 78% of businesses shared that they are planning to expand their AI investments soon.
Blockchain, in terms of industry adoption, is essentially on the same track. According to an industry survey, around 84% of respondents are using the technology to varying extent.
Could Blockchain and AI work well together?
There had been numerous academic accounts in the past that highlight the groundbreaking potentials of these two technologies. But while much had been published in the past about the possibility of combining AI and Blockchain, the world is yet to see the actual result.
Although AI and Blockchain have their respective functions, it’s worth considering that both technologies are geared towards the management and communication of data. As the world is being swept by the digital revolution, an enormous amount of data is being generated from millions of touchpoints every single day. Can you imagine how long it would take to process those data without the help of AI machines?
By definition, artificial intelligence is the development of computer systems that can quickly collect, analyze, and accurately interpret the data without any human intervention.
Today, AI machines are still far from being independent. However, it’s worth noting that the technology continues to evolve with each passing year, always achieving significant improvement compared to the last. Major companies such as Google, Amazon, Microsoft, Walmart, and even organizations in the healthcare industry are already relying on AI and to a great extent. Millions of consumers, though most are unaware, are already interacting with these technologies either directly or indirectly every day. These companies use AI to offer their users better recommendations in their product and services.
Meanwhile Blockchain fulfills the need for secure data storage and data communication. The data are being stored in an encrypted, distributed ledger structure. The ledger is distributed simultaneously across all nodes that are connected to the network. With this mechanism, distributed decentralization is achieved, and people can access the data quicker without any central control. Blockchain is immutable and designed to be completely resistant to modification and abuse. Blockchain presents itself as an extremely robust database since modifications and updates can only be done by those with permission.
AI and Blockchain have their respective strengths and weaknesses. Blockchain can help people track and understand the decisions being made by AI, while the latter can improve the security of data stored on Blockchain.
How can AI and Blockchain benefit each other?
AI is capable of processing an enormous number of variables and learn about all of them autonomously of each other. It is one of the reasons why humans are having a hard time understanding the decisions made by this technology. For instance, AI algorithms are being eyed as a tool that can help detect suspicious financial transactions. Furthermore, it is expected to decide whether further investigation is needed or not.
However, AI’s decision would still be subjected to a manual audit to test its accuracy. But with tons of data that humans need to process, the task looks daunting and complicated enough, not to mention the amount of time it would take to finish the audit.
Let’s use Walmart as an example. This US-based multinational retail corporation feeds its AI systems with massive loads of monthly transactional data that had been acquired from its chains of stores. AI would then decide what products should be restocked for a particular store. Certainly, Walmart would not have enough time to validate the decision made by AI manually or if they dare so, then perhaps some of its stores would run out stocks before they finish.
Here’s where Blockchain comes into the picture. If AI decisions would be recorded on a datapoint-by-datapoint basis, then auditors would find it easier to start the audit process since they are confident that the already recorded data would not be tampered with other incoming data.
It’s unfortunate to think that despite the huge benefits that AI provides across a variety of industries, its usefulness would always be limited as long as the public is reluctant to trust its way. Essentially, recording the decisions of AI on Blockchain could boost transparency, which can ultimately encourage more and more people to rely on technology.
Meanwhile, AI can make Blockchain management more efficient. While computers have evolved a lot in terms of speed over the years, these machines still rely on explicit instructions on how to carry out a task. Computers alone can’t get the job done. The data on the Blockchain is encrypted, meaning processing them would require a massive amount of processing power from a computer. Let’s use Bitcoin mining as an example. The hashing algorithms that are being used by miners to solve a block on the Bitcoin network involves extremely complex combination of variables and characters. They have to use a “brute force” to solve a mathematical challenge, which is crucial in verifying transactions.
AI presents a great way to completely remove this brute force approach out of the picture. Let’s think of a human who knows how to crack codes and is good at it. It’s safe to say that they would become even better and more efficient in their tasks as time goes by. The same principle applies to an AI-powered mining algorithm. However, instead of spending considerable years to become an expert, a machine can immediately enhance its skill, given that it is provided with the right training data.
Artificial intelligence can also help Blockchain in terms of security. Currently, AI developers are working on algorithms that could process or operate with encrypted data. Notably, any data process that requires the exposure of unencrypted data entails security risk.
What are the significant challenges of combining Artificial Intelligence and Blockchain?
When combined, AI and Blockchain present infinite potentials. However, there are underlying challenges that developers must solve first before the two technologies can be considered a perfect match.
For example, despite exhibiting a tremendous potential for data management and accessibility, organizations and individuals are still reluctant to trust the technology due to issues of privacy, particularly on public Blockchains. While the prime objective is to make data accessible to everyone, the presence of delicate data from the Internet of Things (IoT) and other devices could compromise users’ privacy. One possible solution is to develop private Blockchains that control the availability of information and limit them to those who own the Blockchains.
Scalability is another factor that major Blockchains have to deal with right now. Notably, most Blockchains that had been developed in the past are struggling to handle the surging demands. Ethereum, for example. The Blockchain network can only process around 15 transactions/second. According to its creator, the chain is already full, and a massive update is needed. While other Blockchains claim to have the ability to process 40 000 transactions per second, no substantial evidence has been presented until now.
Then there’s the smart contract technology, in which security remains a massive challenge due to its deterministic nature of execution. AI machines would find it complicated since they are designed to perform in a more unsystematic way.
Are there existing projects that rely on AI and Blockchain integration?
Despite the complicated challenges of combining these two technologies, some companies have already tested whether they are a viable pair or not.
Cortex, a Blockchain-based firm, launched an AI-powered network for DApps (decentralized applications) back in June. Cortex claims itself as the first company to use the combination of AI and Blockchain in optimizing financial services. Aside from generating decentralized financial services credit reports, Cortex would purportedly create anti-fraud solutions.
Meanwhile, Endor, an organization that develops AI-powered predictive analytics tools, opted to take a narrower approach. They have integrated Blockchain in their system to enhance engine scalability and to provide business users with access to a broader pool of data.
AiX, a trading broker that relies on AI in terms of connecting its traders, and Peculium, a crypto savings management platform, are two of the companies in the financial industry that have pioneered in using the tools and solutions that employ both technologies.
Another project that defies the complexities of combining AI and Blockchain is the one launched by Singularity Net. The platform now offers users with a decentralized network where they can develop and monetize AI-based services easily.
The concept of integrating AI with Blockchain and vice versa is no doubt a work in progress. Major economies seeking to lead the way in terms of innovation had already launched several initiatives that aim to combine both technologies, confident that the result would deliver acceleration across a variety of fields. The United States, for instance, has established a law that aims to manage AI-related activities and investments. Meanwhile, the United Arab Emirates has launched a national program that provides talented individuals with scholarships. They would be supported throughout as they are undergoing training and seeking more knowledge about these groundbreaking technologies.
There is no doubt that Artificial Intelligence and Blockchain are two different trends that are changing the world in their own rights. Given their respective strengths and weaknesses, the experts are confident that integrating them would result in a world with improved oversight and accountability as well as limitless opportunities.