Blockchain & AI
reading time
6
min
Jul 13, 2023
It’s no news that AI is changing the landscape. ChatGPT has been in every debate for some time now, sparking a myriad of reactions and experiences. Some are fascinated by it, others cherish that it partially relieves them of monotonous tasks and others fear for the future of their line of work. But ChatGPT is just a (powerful) tool among many – the technology has been disruptive as much as it has grown explosively and shown us a glimpse of its tremendous potential. It’s too early to predict its evolution, especially since some time will pass before regulations catch up, but it’s clear that it’s here to stay in one form or another.
What happens, though, when we combine AI with another transformative and promising technology? Blockchain is young but can boast two decades of pitfalls, experimentation, wild stories and brilliant use cases. By now, it has won the hearts and minds of entrepreneurs worldwide and helped upgrade various business and industrial processes, even in organizations with conservative models.
AI is a very natural match for blockchain because it can empower some of the latter’s native features, like better allocating resources in a decentralized network, refining the anti-tamper and security mechanisms, and enhancing the automation of processes by boosting smart contracts. These improvements will undoubtedly help increase productivity and upgrade the digital space as a whole.
Blockchain plus AI could also prove a game changer in restoring the public’s trust in traditional models and institutions. They synergize mutually when it comes to safety, efficiency and transparency. A common challenge for blockchain systems, for example, is obtaining solid real world information. For this they employ oracles, which have their own vulnerabilities. As it happens, one of AI’s greatest strengths lies in Machine Learning and Deep Learning – that is, digesting vast amounts of data while using it to derive core insights and perform operations, all of which ends up ingrained in the system’s memory and “toolkit”. AIs get better at something similarly to us – through study and experience.
Different business models or industries will benefit in different ways. Some solutions might be blockchain-based with minimal AI assistance, others the opposite or anything in between. Let’s go over a tentative list of applications of both technologies combined.
Diagram illustrating the integration of Blockchain and AI in various industries, including Security, Supply Chain, Financial Services, Healthcare, Authenticity Verification, and Data Storage, showcasing their interconnected roles in enhancing efficiency and trust across sectors.
From: https://blog.chain.link/blockchain-ai-use-cases/
Supply Chain Management: When AI and blockchain join forces in the context of a supply chain, product traceability and operational optimization take care of themselves. A transparent and effective supply chain ensures the authenticity of goods while bolstering customer trust.
Healthcare: To create reliable, efficient and personalized healthcare models, blockchain can provide secure patient data storage, while AI might help formulate individualized treatment plans and epidemic prediction.
Financial Services: Blockchain is great for fraud reduction and speedy transactions. This can be complemented with AI tools that provide market trend predictions and a customer service without delays, optimizing trading and loan processing.
Data Marketplaces: Pairing blockchain's secure data transactions with AI's advanced information processing could result in more insightful, better equipped data packages.
Smart Contracts and Legal Tech: AI can automate the creation and execution of smart contracts while providing predictive judgments based on data stored on a blockchain, streamlining legal processes.
Internet of Things (IoT): A secure blockchain framework for device communication, aided by AI’s efficient decision-making, can help resolve IoT scalability, privacy and reliability issues.
Benefits and Features
Improved Data Security: The decentralized and cryptographic nature of blockchain systems can greatly enhance data security, reducing the chances of data tampering and unauthorized access. AI can add another layer of security by identifying and reacting to security threats in real time.
Transparency: One of the key features of blockchain technology is its transparency. Each transaction is recorded and can be tracked, making it very difficult to alter or fake them. This transparency builds trust between users and eliminates the need for third-party verification.
Data Quality and Management: AI can quickly process vast amounts of data, cleaning and structuring it for further analysis. Machine learning algorithms can recognize patterns and learn from the data, drawing out crucial projections and insights. Blockchain, on the other hand, can ensure the immutability and integrity of this data – once an entry has been made, it cannot be modified, ensuring the accuracy of the data analysis.
Increased Efficiency and Speed: Smart contracts on the blockchain execute automatically when certain conditions are met. Transaction times are shortened and manual intervention is no longer necessary. AI can improve this by using data patterns to inform decisions. For instance, AI can automate specific customer service tasks and predict customer behavior, resulting in quicker and more effective services.
Decentralization of AI Models: Blockchain can help create a decentralized marketplace where users can safely and openly trade AI models and algorithms. This democratization of AI makes it possible for people and smaller organizations to use or contribute to complex AI technologies that were previously under the control of large corporations.
AI Explainability and Accountability: AI decisions can be stored using the blockchain to provide a tamper-proof data record. This provides much-needed explainability and accountability for AI actions, particularly in sensitive domains like healthcare or autonomous vehicles. It also means that the reasoning behind AI decisions can be audited and traced back as necessary.
Interoperability: With blockchain and AI, data from different sources can be seamlessly integrated and securely exchanged, improving interoperability.
Cost Efficiency: AI and blockchain both have the potential to reduce costs significantly. While AI can automate and streamline processes, lowering operational costs, blockchain can do away with intermediaries and lower transaction costs. The combination of both technologies can result in significant cost savings in sectors like banking or insurance.
Remember that this is probably the tip of the iceberg. No one knows what the future has in store for these technologies, but they’re already being used to much success in some of the aforementioned areas. And together, they embolden and expand each other to unforeseen horizons.
