Can Blockchain and AI work together? Does Blockchain and AI make a perfect combination? Let’s dive in to find the answer to these questions.
Blockchain technology is undoubtedly one of the simplest and ingenious ways in which the methods for transferring information have changed. It offers an open network in which participants could transfer information or money with complete safety, transparency, and immutability.
Over the years, blockchain had been overshadowed by the popularity of cryptocurrency. However, it has recently found prominent recognition and, most important of all, blockchain has the potential of integrating with other technologies. So, can blockchain and AI work together?
There is no doubt that AI and blockchain are significant technologies for empowering the modern wave of digital transformation. The convergence of these technologies could lead to the foundation of new business models. For example, autonomous agents can be programmed for receiving and sending money by utilizing blockchain. So, is the blockchain AI convergence truly worth the hype? Let us find out the answer in the following discussion.
Enroll Now: Free Blockchain Course
Understanding the Link between Blockchain and AI
Blockchain has always found places in discussions about payments with respect to cryptocurrencies. However, the non-financial use cases of blockchain in digital identity management and supply chain management have highlighted more about its potential. So, the scope for combining blockchain and AI emerged subsequently as different use cases of blockchain started gaining attention. Before finding how they are linked to each other, let us understand the terms.
Blockchain is a distributed digital ledger shared across peers in the network. The peers or nodes agree on transactions that you have to add to the blockchain network. The transactions on the network are stored on blocks that have unique hash values alongside time stamps for verifying integrity. The connection of blocks to each other in the form of a chain gives the reason for the term ‘blockchain’. The chain of connected peer-to-peer networks is practically immutable and offers the desired security from data modification.
Artificial intelligence is the ability to the simulation of human intelligence through the use of machines. The blockchain artificial intelligence equation largely depends on the capabilities of AI for enabling technological solutions with cognitive traits. The primary goal of artificial intelligence focuses on reducing human errors while ensuring faster operations. Therefore, you can clearly notice how both AI and blockchain aim to make processes faster. Using both of them together definitely presents some interesting prospects for expanding the applications of blockchain across diverse sectors.
Trends for Blockchain and AI Combo
The blend of artificial intelligence and blockchain could introduce radical innovations in the future. A detailed understanding of existing trends associated with the blockchain and AI relationship could help in identifying the reasons for considering the combo. According to the International Data Corporation, global expenses on AI increased to almost $57.6 billion by 2020. Interestingly, around 51% of businesses leveraged the AI and blockchain combination. Existing trends of applying AI in the blockchain would improve blockchain by introducing the following functionalities,
- Data protection
- Smart computing power
- Data monetization
- Creation of diverse data sets
Blockchain could also provide a better platform for understanding AI. It can help in tracing the decision-making processes in machine learning. Blockchain could help in accurate documentation of each data and variable involved in the decision-making of AI algorithms. Furthermore, blockchain AI convergence is also favorable on the grounds of assured improvements in blockchain efficiency. For example, Artificial Intelligence could help in automating various aspects of blockchain management, such as audit trail monitoring.
Differences between AI and Blockchain
Well, the existing state of affairs around the blockchain and AI combination definitely shows that it is reasonable to start looking for AI-empowered blockchain solutions. However, it is also important to find out the differences between AI and blockchain to know whether they would be the right fit.
- The foremost aspect which differentiates AI and blockchain refers to centralization. AI is essentially a centralized technology, while decentralization is the essence of blockchain.
- The next crucial difference between Artificial Intelligence is transparency. While blockchain is easy to understand and presents better opportunities to start off, Artificial Intelligence has many complex algorithms and concepts.
It is inevitable to wonder whether these differences can serve as challenges in the adoption of AI-powered blockchain solutions. As a matter of fact, the benefits of combining these two powerful technology trends can overshadow these differences.
Advantages of Combining AI with Blockchain
It is clear that two different technologies have unique traits when working independently. However, combining the best of both for the larger good is perfectly evident in a blockchain and AI combo. Here are some of the notable advantages of combining AI with blockchain.
AI and blockchain could provide a substantial boost for improvements in encryption. First of all, AI has formidable potential with respect to security. Recent developments in AI have been focused on developing algorithms capable of working with data in an encrypted state. This is obviously a security risk while blockchain security algorithms can make a supportive intervention with information stored in encrypted form.
Blockchain AI applications could offer the benefit of storing highly sensitive personal data. With the ideal and smart processing approaches, the data could help in unlocking convenience and value. For example, smart healthcare systems could ensure precise healthcare routines by scanning medical records with assured security.
Ease of Blockchain Management
The benefit of better management is an obvious reason for which it is important to consider AI and blockchain combinations. We have always had fast computers, although without any clue what to do until provided with specific instructions. Therefore, utilizing blockchain on computers could imply the need for large amounts of processing power.
Hashing algorithms for mining blocks follow a brute force approach by trying different combinations of characters for finding the suitable alternative for verifying a specific transaction. So, it is clearly visible that dealing with blockchain definitely takes a lot of processing power to carry out each process. Now, the blockchain and AI combination could work as a reliable solution for addressing this issue.
AI can help in making a shift away from the brute force approach, thereby managing tasks with intelligent and reasonable approaches. AI algorithms are tailored for learning with every interaction within seconds that a human expert would take many years to learn.
The year 2021 will bring more opportunities in the Blockchain Ecosystem. Here’s the List of Top Companies Using Blockchain Technology.
Tracking, Understanding, and Explaining AI Decisions
Blockchain is popular for its decentralization and transparency. Therefore, it gives the perfect instrument for peeling the layers of complex AI algorithms to understand their decision-making processes. The decisions by AIs could be difficult for humans to understand. However, there are situations where AI-based decisions will have to be brought to audit, primarily for verifying accuracy. The most prominent example of Walmart shows that it inputs almost one month of transactional data throughout the stores in its AI systems, making decisions regarding stocking or location of products.
The blockchain and AI combination can work perfectly in this case with the advantages of the datapoint-to-datapoint approach for documenting decisions. As a result, it also presents prolific opportunities for improving the credibility of AI. The growing trust of people in AI could lead to new strides in transparency and insights into the minds of robots.
Top Blockchain AI Use Cases
The benefits of blockchain, when used in combination with AI, have a tough advantage over the conflicts between them. However, any concept appears good on paper. In theory, it is possible to conjure up strategic plans and models for AI-based blockchain solutions. However, are there any practical applications of blockchain and AI put together? An overview of some of the real examples of AI-powered blockchain solutions could help you understand the value of combining both.
One of the notable blockchain AI projects in recent times, Botchain, provides the ideal nurturing ground for expanding and connecting AI-bots and software. The network aims to create its own ecosystem, and it offers identity validation, universal registration, compliance capabilities, and bot audit. Subsequently, Botchain could offer critical systems for any individual using AI-powered solutions and the developers.
2. Matrix AI
Another top name among the renowned applications of blockchain and Artificial Intelligence used together is Matrix AI. Matrix AI is capable of leveraging AI-powered technologies, for example, natural processing language, for offering blockchain functionalities. The features of the Matrix AI project include AI-based cybersecurity, dynamic delegation network, auto-coding intelligent contracts, adaptive blockchain parameters, and others.
The striking highlight of the tool is the AI-powered secure virtual machine which can help in identifying possible loopholes. It also offers detection of malicious intentions alongside maintaining resilience in event of high-intensity attacks through generative adversarial networks.
Also Check: Top Blockchain Projects in 2021
SingularityNET is also another promising example of using blockchain and AI together. It is actually a full-stack AI solution based on a decentralized protocol. Apparently, it is one of the first and only decentralized platforms to have enabled support for operations and management of AI at scale.
The SingularityNET platform serves as the core infrastructure for enabling communication and transaction between AI services. So, what is the most appealing value advantage of SingularityNET? It can help users in leveraging a worldwide network of AI agents, algorithms, and services.
Read Now: Best Blockchain Open Source Projects
It is also important to turn our attention towards Numerai as one of the top blockchain AI projects. It is an AI-based cryptocurrency project with a critical data science problem. Numerai is actually a tournament in which users have to develop models by using the predefined R and Python scripts.
The tournament renews every Saturday, and new tournament data is also released. Users have to solve the problem and submit it by Monday for earning rewards in the form of Numerai tokens.
Enroll Now: Blockchain in Finance Masterclass
Challenges to the Adoption of AI-based Blockchain Solutions
While blockchain and Artificial Intelligence definitely make a good pair, there are many obstacles in their way. Let us find out some of them.
- Artificial intelligence and blockchain are just considered buzzwords for technological fluency. An enterprise needs to have a commitment to selecting or developing an AI-powered enterprise blockchain solution for better success with adoption.
- Change to resistance is evident as many business leaders could introduce machine learning easily. However, the same is not applicable to the blockchain. In the case of combining AI with blockchain, potential modern-day solutions could become fuzzier.
- Strong investments in improving the computing capabilities of AI-based blockchain solutions are also a critical challenge for the AI-blockchain combo. It is important to sustain your confidence in the potential of combining both together.
The capabilities of Artificial Intelligence can offer promising advantages for different sectors. The interesting factor is that both the innovative technologies have a lot to offer for improving each other. For example, blockchain helps in improving Artificial Intelligence algorithm traceability, and Artificial Intelligence could improve transaction speed and resource effectiveness of blockchain applications.
However, it is also essential to look out for the differences between AI and blockchain. On the other hand, the challenges for combining both also play a major role in defining their future together. Learn more about blockchain and the ways in which AI serves as its ideal companion.
*Disclaimer: The article should not be taken as, and is not intended to provide any investment advice. Claims made in this article do not constitute investment advice and should not be taken as such. Do your own research!