The world of technological innovations is currently witnessing a monumental shift as novel technologies such as Artificial Intelligence (AI) and blockchain take center stage.
Since the debut of ChatGPT in November 2022, AI has become particularly popular within and outside the tech community. However, what’s even more exciting is the potential for integrating AI with other technologies in the realm of the fourth industrial revolution (4IR).
Enter Blockchain – touted for its distributed architecture, this nascent technology is designed to allow for transparency, provenance, and tamper-proof record-keeping; features that are lacking in today’s centralized ecosystems.
That said, it is interesting to observe a gradual convergence between blockchain and the latest kid on the block, AI. According to Fortune, the blockchain AI market was valued at $184.6 million in 2019 and is projected to grow to $973.6 million by 2027.
In this article, we will explore how these two emerging technologies are converging and the possibilities for value addition in traditional industries.
How can Blockchain Enhance AI Capabilities?
While the majority of existing use cases for blockchain currently revolve around the digital asset industry, this technology has immense potential to enhance the infrastructure used in building AI products. Let’s explore some of the values that blockchain can introduce to AI.
Authenticity
One of the biggest challenges that AI innovations are facing is data bias. Most AI applications, including ChatGPT, have yet to make the input data used to train the algorithm publicly verifiable, which raises the question of explainability. How certain can we be that the data is unbiased, and can we trust the output?
However, with blockchain technology in the picture, this shortcoming can be addressed. Decentralized infrastructures can provide a platform to efficiently track and verify the data input sources for AI algorithms, making it easier to identify biases and eliminate them accordingly.
Furthermore, integrating blockchain architectures as the trust layer in AI innovations can also enhance the sharing of information. This means that AI innovators can collect more diverse data sets and leverage the expertise of various parties to improve their algorithms.
Data Integrity
In recent years, there have been several instances of Web2 companies exploiting their clients’ data. Similarly, there is a risk that some AI innovations could be operating outside the ethically required data handling measures.
With AI growing bigger each day, this is a pitfall that both innovators and consumers ought to avoid. Blockchain technology introduces a transparent avenue for users to audit how their information is being used. This provides a sense of trust and ensures that the data is not being tampered with or misused. The immutability and transparency of blockchain make it an ideal solution for ensuring data integrity in the AI industry.
Computing Power
AI products can be quite resource-intensive due to the vast amount of data they need to analyze and process to generate output. As a result, there are instances where ChatGPT and similar models experience downtime due to the limitations of centralized servers in handling the required computational capacity.
However, the decentralized nature of blockchain offers a solution to this challenge. AI innovators can leverage the blockchain’s decentralized architecture to distribute the computational power across multiple servers, including devices that have unused computational resources.
The Other Side: AI’s Value Proposition in Blockchain
It is worth noting that AI also has some significant benefits that it could bring into existing blockchain applications. Here are some of the main ones:
Automation
Through machine learning algorithms, AI can play an integral role in further automating smart contracts. While this fundamental building block of blockchain technology is designed to be self-executing, smart contracts are sometimes rigid which makes it difficult for them to process or analyze complex information.
By incorporating AI into the equation, smart contracts can become more adaptive and intelligent. Machine learning algorithms can enable smart contracts to dynamically analyze and interpret intricate data, facilitating their ability to handle more sophisticated conditions and variables.
Fraud Detection
The blockchain industry has historically faced numerous security breaches, particularly within the Decentralized Finance (DeFi) niche. Again, machine learning algorithms can prove instrumental in mitigating these risks by aiding in the identification of fraudulent patterns and activities.
Combining blockchain systems with the power of machine learning can help them analyze vast amounts of on-chain data and detect suspicious behavior indicative of fraudulent activities. These algorithms can continuously learn from patterns and anomalies, enabling them to adapt and evolve alongside emerging threats in real-time.
Blockchain AI Use Cases
The convergence of AI and blockchain, despite being relatively new areas of innovation, has significant potential to make an impact across various traditional industries. Let’s explore some of the possible use cases in prominent sectors, including financial services, supply chain management, healthcare, and cybersecurity.
Financial Services
In the financial services realm, the integration of AI with blockchain technology has a great potential to solve the inherent fraud and trust issues. Through machine learning algorithms, financial institutions stand a better chance of identifying fraudulent transactions and streamlining their identity verification processes. Combining these capabilities with blockchain technology further ensures the immutability and transparency of financial transactions, instilling trust, security and verifiability in today’s financial ecosystems.
Supply Chain Management
The integration of AI and blockchain in supply chain management offers numerous benefits. AI algorithms can analyze large volumes of data, optimizing supply chain operations, predicting demand patterns, and automating inventory management. When combined with blockchain technology, it enables secure and transparent tracking of goods throughout the supply chain. This integration ensures enhanced traceability, transparency, and efficiency, reducing inefficiencies and fostering trust among stakeholders.
Healthcare
The healthcare sector also stands to gain significantly from the integration of AI and blockchain. At its core, AI algorithms can analyze medical data, enabling the development of personalized treatment plans, early disease detection, and even assistance in drug discovery. Meanwhile, blockchain can provide a secure and decentralized platform for storing and sharing these medical records. This will help facilitate seamless collaboration among healthcare providers while safeguarding data privacy and maintaining data integrity.
Cybersecurity
Lastly, the integration of AI and blockchain technology presents a compelling solution for strengthening cybersecurity measures. Through the utilization of AI algorithms, network activities can be actively monitored, anomalies can be detected, and prompt responses to potential cyber threats can be initiated.
Furthermore, when AI is combined with blockchain’s distributed ledger technology, the integrity and security of data are significantly reinforced. Blockchain ensures that data remains immutable and tamper-proof, thereby providing protection against unauthorized access and tampering attempts.
Wrapping Up
As highlighted, both AI and blockchain are transformative technologies with immense potential to revolutionize modern-day businesses. That said, it is worth noting that the two technologies still require some improvements to make them a better fit for the solutions they are intended to solve.
Blockchain innovators need to address the scalability issues while the AI industry ought to come clean on its data practices. Nonetheless, the convergence of AI and blockchain opens up a world of possibilities for innovation and progress. By leveraging the strengths of both technologies, businesses can enhance efficiency, transparency, security, and trust in various sectors.
As these technologies continue to evolve and mature, it will be fascinating to witness their full potential and the impact they will have on shaping the future of business and society.
