Blockchain and artificial intelligence (AI) are both innovative technologies that promise to change our future. The underlying principles behind them are complex. So most experts are concentrating on one silo or another. However, the combination of blockchain and AI can offer lots of new opportunities. First, let's have a look at the fundamentals of these ideas.
The blockchain technology is the backbone of cryptocurrency. It is a distributed digital ledger. Besides cryptocurrency, it can be used for distributed application development. It is changing the way we conduct business. In any transaction, there needs to be an independent third-party to verify the validity of the information. Banks, financial institutions, and governments play this function. With blockchain, it’s possible to record information in the digital ledger and mathematically verify the authenticity of the recorded data. It eliminates the need for third-party intervention. It is a game changer for any kind of transaction.
On the other hand, artificial intelligence has been a goal of researchers for a long time. Modern research into AI started in the 1950s. Recent advancements in hardware and software algorithms have made AI methods like machine learning and deep learning more cost-effective and practical. In the last few years, the new methods have boosted the profile of artificial intelligence. Today it’s possible to create real-world applications with machine learning and deep learning algorithms.
Even though both blockchain and artificial intelligence use advanced computer science theories, they derive the knowledge from different specialties. While blockchains are more concerned with cryptography and distributed computing, artificial intelligence techniques are derived from computer vision and biosciences. So there is a disconnect of communication and knowledge sharing between the two technologies.
Below are listed some possible benefits of bringing these technologies together:
1. Blockchain and AI Can Help Each Other on Security
Information recorded on blockchains are immutable. So blockchains can provide AI-based applications with reliable data sources.
For example, healthcare facilities maintain large amounts of information on their customers. Whenever there is a transaction, there’s always the risk that hackers are using stolen data to penetrate the network. Blockchain-based identity management is a better option. Healthcare AI applications can use these more reliable identity management systems to authenticate access requests.
Strong encryption is another aspect of blockchain technology. So it's harder for hackers to corrupt the data. In the future, more advanced techniques like Homomorphic encryption can provide better security. These techniques will allow operations to run directly on encrypted data. AI-based applications work with a lot of sensitive information. So having more advanced security methods to store data will help AI applications reap the benefits of blockchain security.
On the other hand, blockchain applications are vulnerable to cyber attacks. Due to the possibilities of lucrative financial benefits, more and more cybercriminals are taking an interest. Blockchains can’t be manipulated. But the applications built around them are at risk. The DAO, Mt. Gox and Bitfinex breaches show the vulnerability of blockchain-based distributed applications. So blockchain companies need better security solutions and AI can help. It’s possible to train machine learning and deep learning algorithms to recognize possible threats and better protect the applications.
2. Blockchain Can Help AI Transparency and Training
Artificial intelligence algorithms use training-data to build neural networks which are complex decision trees. AI applications use the neural networks to generate outcomes. However, these decision trees are like black boxes. It’s difficult for human beings to understand how an AI-application reaches a particular decision. It decreases the trustworthiness of the neural networks.
Blockchain can be used as an end-to-end distributed ledger to record important information of every AI decision. Anyone involved in the chain can check out the data to understand how AI applications are generating outcomes. It can improve the trustworthiness of the applications.
Also, more AI tools are expected for financial and legal transactions. An audit trail will become an essential requirement to make sure these tools are making the right decisions. The availability of the decision points on the blockchain will ensure transparency.
When people think of AI, they think autonomous machines. But before the machines produce results, the AI algorithms need to be trained with real data sets. Data scientists spend significant time making sure the AI labels and models are accurate. These efforts can be decentralized through blockchain based data exchange and verification. It can save time and money.
3. AI Can Help Blockchain Become More Efficient
The blockchain technology is an exciting innovation. It is also very power-hungry. According to Deloitte, the cost of validating and sharing blockchain transactions is around $600 million. The energy for running hardware is a big part of this cost. At the moment, there is a lot of waste. Whenever there is a transaction block, multiple miners try to verify it. It means multiple miners are wasting energy. In the future, AI might be able to optimize this process and decrease the cost of mining.
Blockchain also has a data size problem. It keeps every piece of information from the beginning of its inception. The chains get longer and heavier with time. AI can introduce new ways to optimize. It can help blockchains make smarter decisions about data storage and maintenance. For example, AI can use machine learning to provide better data sharding methods.
Some blockchain ecosystems offer smart contracts. Smart contracts are code-based contracts that can execute and record results on the blockchain. As more financial, medical and legal institutes start using them, AI can help in the creation and verification of smart contracts.
It’s easy to see the potential of combining blockchain and artificial intelligence. Walmart and IBM along with JD.com and Tsinghua University have started a Blockchain Food Safety Alliance in China that will use blockchain and artificial intelligence to keep the Chinese consumers safe. You can expect to see more companies and consortiums take similar initiatives to bring experts together. These initiatives will explore new possibilities and find pioneering solutions.
If you are looking for blockchain experts for your small business, our engineers and analysts at IoTCoreSoft are ready to help. Contact us today.