Blockchain and Artificial Intelligence – Can they be chained together?

When one looks at the history of money as the primary medium of exchange, one is amazed to realise the rich history that backs this medium of exchange. From shells to leather to paper and coins, money has come a long way. Today we see a great take up of plastic ‘money’ in the form of debit and credit cards, especially post the Covid pandemic.

Dating back to the late 1950s plastic money (i.e., debit and credit cards) has evolved with improved security features and a high consumer and corporate penetration. In the early 2000’s along somes a new currency, that is totally digital, Bitcoin. This digital currency or cryptocurrency established a new way of transacting.

Cryptocurrency is digital money that does not require a bank or financial institution (financial intermediary) to verify transactions and can be used for purchases or as an investment.?Transactions are then verified and recorded on a blockchain, an unchangeable ledger that tracks and records assets and trades. As we know, physical money is carried around and exchanged in the real 'physical' world. Cryptocurrency payments exist purely as digital entries to an online database describing specific transactions. When you transfer cryptocurrency funds, the transactions are recorded in a distributed public ledger, called blockchain, a record of all transactions updated and held by currency holders.

Cryptocurrency units are created through a process called mining, which involves using computer power to solve complicated mathematical problems that generate virtual coins. Users can also buy the currencies from brokers, and then store and spend them using cryptographic wallets (virtually).

Owning cryptocurrency means that you do not own anything tangible, i.e. physical. What you own is a key that allows you to move a record or a unit of measure from one person to another without a trusted third party.

Blockchain is a method of recording information that makes it impossible or difficult for the system to be changed, hacked, or manipulated. A blockchain is a distributed ledger that duplicates and distributes transactions across the network of computers participating in the blockchain. Blockchain is an immutable and shared ledger that will simultaneously provide an immediate, shared, and transparent exchange of encrypted data to different parties as they initiate and complete transactions.?

Blockchain technology is a structure that stores transactional records, also known as the block, of the public in several databases, known as the “chain,” in a network connected through peer-to-peer nodes. Typically, this storage is referred to as a ‘digital ledger.’ Blockchain?is a shared, immutable ledger that simultaneously provides an immediate, shared and transparent exchange of encrypted data to multiple parties as they initiate and complete transactions. A blockchain network can track orders, payments, accounts, production, etc. Since permission members share a single view of the truth, they gain confidence and trust in their transactions with other businesses, along with new efficiencies and opportunities.

Every transaction in this ledger is authorised by the digital signature of the owner, which authenticates the transaction and safeguards it from tampering. Hence, the information the digital ledger contains is highly secure.

According to?Gartner’s projections, the economic impact created by blockchain technology is poised to experience rapid growth, with an estimated value of $176 billion by 2025 and $3.1 trillion by 2030. Similarly, the AI software market is anticipated to reach a value of nearly $134.8 billion by the year 2025.        

Artificial Intelligence (AI) is impacting everything we know. With Blockchain technology and AI, the synergy between blockchain and AI has several benefits. We are often referred to as ‘collective intelligence’, the collaboration of AI with a decentralised ecosystem such as blockchain is expected to change the landscape of the digital economy. The partnership between AI and blockchain is already happening, the future is now.

“Collective Intelligence is the process by which a large group of individuals gather and share their knowledge, data and skills for the purpose of solving societal issues.” [The National Endowment for Science Technology and the Arts?(NESTA)]        

Blockchain is considered a shared and permanent digital ledger that will be used to encrypt data in the future. AI enables an individual to analyse and make decisions from the collected data. AI will not replace Blockchain but is complementary to Blockchain. AI and Blockchain technology are interlinked in several ways.

Blockchain is one of the most transparent technologies which needs a reliable source of refined data. This data source can be verified efficiently due to the Blockchain technology of nodes that allows the traceability of these nodes. With the demand for large data in training AI models, Blockchain technology is well suited.

Combining Blockchain and AI presents numerous benefits for businesses. AI models process complex datasets, extract valuable data insights, and make informed decisions using the data presented. Blockchain on the other hand ensures data integrity and immutability, establishing trust among participants.

Privacy of data subjects is an elemental requirement in data management today. Cryptography in Blockchain strengthens privacy throughout the network, enhancing the training of AI systems as AI systems are competitive and known to be complex.

Blockchain technology uses decentralised ledger technology ensuring no single server handles all the operations of the AI application. This ensures that ‘not all eggs are in one basket’ syndrome occurs with the data supporting the AI applications in the Blockchain technology.

AI requires serious computing power. Blockchain technology takes on this responsibility by ensuring that correct hardware, software, storage and running costs are handled.

Security is an absolute must in the digital world. The blockchain revolves around the rigidness of the contract. Blockchain’s smart contracts are not secure enough, opening up opportunities for exploiting vulnerabilities. To minimise these vulnerabilities, AI generates more secure smart contracts.

A smart contract is?a digital agreement signed and stored on a blockchain network that executes automatically when the contract's terms and conditions (T&C) are met; the T&C is written in blockchain-specific programming language.        

The authenticity of data in the digital world is crucial to trusting the data. Blockchain’s digital record provides valuable insights into the AI framework and the source of the data used within the Blockchain. AI models can analyse and verify user identities, leveraging biometrics, facial recognition, and behavioural patterns to ensure secure access to digital platforms. Synergising with Blockchains will bring benefits as Blockchain networks can be used to securely store authentication credentials.

Business processes are one of the areas that have been attracting attention during the digital transformation of business. Automation, AI, and blockchain are bringing newer values to business processes that span different parties like adding, removing friction, and increasing speed and efficiency. These are necessary with the pressures of improved efficiencies and cost reductions. Embedding AI models Blockchain smart contracts assist in resolving disputes.

Combining AI and Blockchain into a powerful duo brings enhanced trust, streamlined transactions, and increased efficiency to the financial services industry (as an example). This improvement in trust will enhance data analytics and the accuracy of the collected data.

The convergence of artificial intelligence and blockchain technology is still being explored as AI is not fully understood. Blockchain technology is also a disruptive technology.

Bringing these two disruptive and fascinating technologies together can offer amazing benefits. The intersection of AI and Blockchain can impact different industries, extending into privacy, energy usage, control data regulation, security and scalability.

Combining AI and Blockchain technology has the potential to transform industries as we know them, through improvements in health, optimising the food supply chain by enhancing traceability, and assisting in managing the financial markets with up-to-date information.

The benefits of combining AI and blockchain technology are immense. These disruptive duos bring immense value to businesses across many industries. We are in the early days of this, and the future looks promising.? Go on…be a disruptor….

Sources:

·??????? IBM

·??????? Gartner

·??????? Kaspersky

·??????? HBR

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