Terms like artificial intelligence and the blockchain have become buzzwords for people across various lines of work and areas of interest. Both technologies advanced functionality, reduced costs, and other benefits for industries including finance, online marketing, healthcare, and software development. More often than not, they are combined to achieve optimal results.
Over 44% of organizations are currently working to embed AI into processes and applications. Combined with the blockchain, they form a powerful ecosystem with advanced functionality at its core.
Deep learning models use complex neural networks to imitate one's thinking processes. They analyze massive data volumes, detect patterns, forecast outputs, and streamline decision-making. The blockchain delivers a decentralized, transparent, and censorship-resistant financial settlement layer that lowers trust and enables firm data storage and permissionless online transactions.
The combination of blockchain technology and AI can potentially open up brand-new business opportunities. What are those? Increased productivity, automated routine tasks, safer and more efficient data exchange, to name a few. Besides, you can optimize decision-making through smart contracts and strengthen transparency in essential infrastructure and economic processes.
Beyond that, the blockchain and AI combo could make data-driven decision-making and more effective resource management possible. The applications you can create based on these two technologies could benefit businesses in various other industries, such as energy, social impact, agriculture, and urban planning.
Here are some of the future impacts that using AI in blockchain can bring:
- Decentralized AI (DAI). Centralized entities now manage most AI. Blockchain lays the basis for the DAI system, which allows AI models to interact with the blockchain as autonomous agents.
- Micro-economies based on data. AI and blockchain can enable data-based granular microtransactions. This will allow individuals to receive compensation for data generated by their IoT devices and access AI-powered marketplaces to analyze their own data streams. It generally reshapes our vision of value creation and data ownership.
- AI for blockchain control. AI can help significantly optimize consensus mechanisms for more complex blockchains, suggest network upgrades, and identify vulnerabilities.
Increased levels of trust and automation. AI analysis of blockchain data can potentially facilitate business processes and redefine trust in various contexts like self-executing insurance contracts initiated by AI-verified events.
In this post, we take a close look at the fundamental benefits of merging AI and the blockchain. As powerful as they are individually, their savvy combination enables ultimate data acquisition capabilities. Let’s consider the key benefits of the blockchain and AI.
Benefit #1 — Control and explain AI decisions
Humans can find it difficult to comprehend AI-driven decisions. This is mostly because AI solutions autonomously analyze huge sets of variables to determine those that are essential to reaching the overall goal.
For instance, AI algorithms are employed to analyze payments and transactions to identify fraudulent activities. If any are found, they must be immediately blocked. Until recently, specialists had to check the accuracy of transaction data manually.
However, with AI-driven decisions recorded inside a blockchain, auditing them is easy and fast. The decision-making flow can be recorded in a blockchain to achieve the degree of transparency and insight into AI decision-making that is necessary to gain public confidence.
Benefit #2 — Improve credibility
The blockchain has lots of benefits over other types of data storage. But the main challenge today is collecting input data to train a neural network. Users publicly share massive amounts of data online, but the quality of all this unstructured data is far from perfect. Such well-known companies as Facebook and Google use many computational techniques to try to avoid collecting and storing faulty information. Adversarial attacks can also reach the internal stores.
When integrating blockchain development with AI, various errors can be dealt with using encrypted data, digital signatures, and triple-entry accounting. By combining advanced cryptographic technologies with hashes and digital signatures, we may obtain dependable data in the face of technological limitations. As a result, we can confidently state that a certain dataset existed at a specific moment and has been unchanged.
Digital signatures confirm a hash by recording who created the stamp. Private keys allow for digital signatures and are subsequently verified using public keys, which take on the role of identifiers for the private keys.
Triple-entry accounting allows for composing cryptographically enclosed records such as invoices, receipts, or payments, distributing the underlying information among all involved parties. In this case, the software can work on the basis of credible information from other users.
Benefit #3 — Improve security
In 2021, the European blockchain market brought in around $2 billion in revenue. And the numbers are growing steadily, mainly due to the huge range of advantages the blockchain provides. Reinforced security is among the top benefits. Blockchain-stored data is protected with built-in encryption mechanisms.
A blockchain is efficient for recording personal data such as medical notes or individual recommendations. And data is what AI systems require in huge amounts — and regularly. Experts are now hard at work on algorithms and techniques that would enable AI to interact with encrypted data and not expose it in any way.
While a blockchain is highly secure, applications it works with can be vulnerable. This is exactly where the incorporation of AI development might be a game-changer. For instance, in finance, AI solutions can boost the deployment of blockchain apps. Beyond this, it can also help to predict cybersecurity breaches.
Benefit #4 — Manage and store huge arrays of data
Although this benefit is related to improved security, we can’t pass it by. A distributed ledger can store encrypted data, while AI offers powers for managing that data productively. New use cases appear as a result. You may safely store personal information on the blockchain and distribute access to it.
Companies such as Amazon and Facebook deal with extremely large quantities of data on a daily basis. With the blockchain and AI combined, all of this data can be protected so that third parties cannot access it in any way.
Another benefit of using such a stack is the ability to enhance the way users deal with data. Here’s how it works. Computers use various combinations of characters to analyze encrypted information and finally verify a transaction. In this case, AI traces code and learns this information. And AI does it faster than the human brain. More often than not, it happens almost instantly.
For example, Core Scientific is already using AI infrastructure based on a personalized blockchain with their business networks, helping them monitor the supply chain and get reports in real time.
Benefit #5 — Control blockchains more effectively
In terms of blockchain management, AI outuns both human and computer capabilities. As swift as computers can be in their operations, manipulating blockchain data on hardware devices still requires intense processing power, mainly due to the encrypted nature of the data processed.
This is where AI might be a game-changer, as intelligent technologies allow users to control tasks faster and more intelligently. This enables users to be more effective and focus on more important tasks.
Benefit #6 — Enhance the quality of smart contracts
Smart contracts were introduced not long ago, and they may not work as well as we would like. Artificial intelligence can easily check all smart contract decisions. We can see that smart contract technology is vulnerable to hackers and that it makes poor decisions influenced by outside factors. You may use AI or blockchain technologies to identify these factors and make the right decisions.
Benefit #7 — Get easier access to shared databases
Many companies use a common database to successfully run their operations. For instance, banks prefer a common database because it allows them to verify the accuracy of data submitted by users and makes it easier to check credit histories.
However, the blockchain combined with AI can make it easier. An AI algorithm can easily make a decision on approving a loan or issuing funds. And the blockchain keeps data safe. All this makes access to a shared database easier. A similar system can be developed for absolutely any company and keep information about it in one place.
For example, Bext360 uses the blockchain and AI to improve supply chain transparency in the mineral, timber, and coffee industries. The company’s AI monitors the state of crops and predicts growing patterns for various cultures. Meanwhile, a blockchain efficiently records and stores data on supply chain dynamics.
Exploring Blockchain and AI Applications: Use Cases
Merging AI and blockchain can benefit businesses in various industries. Below, you'll find five use case examples of how AI empowers the blockchain and vice versa.
Smart Contract Optimization
AI-powered tools can analyze historical data and use predictive analysis to detect potential challenges to executing contract requirements — thus making smart contracts more effective. Natural language processing (NLP) allows smart contracts to process and decipher plain legal contracts. One example of a business that implements blockchain and AI in smart contract optimization is Scifn, formerly known as Chainhaus. This blockchain and AI advisory firm provides services in building and maintaining blockchain infrastructures.
Market Trends and Predictions
AI detects correlations and patterns in crypto historical data to anticipate prospective price changes. This information is useful for investors to bet against future market changes or hedge their funds. Neureal, for example, is a prediction engine that helps analyze trends and leverages AI in blockchain to forecast anything from a Google search to stock market changes.
Data Integrity
AI can verify the accuracy of the off-chain smart contract data sources before you can store it on-chain. Smart contracts powered by AI can decipher complex legal terms and conditions, minimize legal ambiguities, and assure regulatory framework compliance. Blackbird.AI, for instance, uses AI to confirm off-chain news content for businesses in the information and communication space and uses blockchain technology to store verified content.
Blockchain Security
Apart from cryptography, which blockchain technology uses to confirm and secure transactions, AI now has the potential to add an extra security layer. This can be possible through monitoring transactions and network activities, real-time anomaly detection, and immediately triggering mitigation measures. CertiK is leveraging AI to secure and audit smart contracts or decentralized apps.
Conclusion
AI and the blockchain are powerful technologies that can change the world we live in. When used together, they have the chance to become even more capable. Today, some countries are already building smart city systems based on IoT, the blockchain, machine learning, and artificial intelligence.
The blockchain has the potential to simplify work with AI solutions and dramatically speed up their development.
Are you looking for reliable blockchain or AI development services? At S-PRO, we offer a wide range of services to tackle any blockchain development needs. Our team of experienced professionals can help you with everything from conceptualizing and designing your blockchain application to developing and deploying it on the blockchain platform of your choice.
We also offer a range of consulting and advisory services to help you with your artificial intelligence projects. If you’re looking for a one-stop shop for all your AI development needs, S-PRO is the right place for you.