With so much promise, a lot of companies and sectors are looking for ways to streamline their processes by combining blockchain technology and artificial intelligence.
Since the beginning of the internet, blockchain and artificial intelligence (AI) have been two of the most inventive technologies. Both of these technologies, which are only the tip of the iceberg, will have an impact on the development of society over the next many decades.
While AI has transformed businesses and industries by enabling automation, optimization, and increased efficiency, blockchain technology first gained prominence when Bitcoin went live. According to Fortune Business Insights, the AI market is predicted to be valued at $1394 billion. Apart from that, the global market for blockchain technology, which was estimated to be valued close to $6 billion in 2021, is expected to grow at an 85% CAGR between 2022 and 2030. With so much promise, a lot of companies and sectors are looking for ways to streamline their processes by combining blockchain technology and artificial intelligence.
The potential of AI and blockchain
Blockchain and AI are two distinct technologies that fulfill very different functions.
On the one hand, blockchain is an immutable and encrypted distributed ledger that may store information in blocks. On the other hand, AI uses data and computing power to mimic human problem-solving abilities. It streamlines decision-making by justifying options and deciding on activities that have the best chance of producing a certain goal. AI can become smarter over time by learning from the data that is presented to it.
When combined, blockchain and AI can create a powerful synergy that can lead to even more significant advancements. Here are some ways in which AI and blockchain can work together to create a more secure, transparent, and efficient future.
How can AI improve blockchain?
Data security
As mentioned above, blockchain technology enables secure and tamper-proof data storage and sharing. By incorporating AI algorithms into blockchain networks, businesses may add an extra layer of protection by detecting and blocking fraudulent actions.
Smart contract
Smart contracts, which can automate the implementation of agreements between parties, can be created using blockchain technology. AI can be used to analyze these contracts and discover areas for improvement, making them more efficient and cost-effective.
Decentralized Autonomous Organizations (DAOs)
DAOs are organizations that are governed by their members and run through smart contracts. AI can help these companies optimize their decision-making processes by evaluating data and generating insights that can lead to improved conclusions.
Supply chain management
Blockchain technology can be used to establish a transparent and secure supply chain system that tracks the movement of items from the source to the end consumer. AI can be used to analyze the data provided by this system, generating insights that can assist optimize the supply chain and decrease waste.
Fraud detection
By analyzing data and recognizing suspicious movements, AI can be used to detect fraudulent actions within blockchain networks. This can aid in the prevention of financial crimes such as money laundering and fraud within the network.
How can blockchain improve AI?
Trust
One difficulty AI is encountering is accountability, which has an impact on the trust that individuals have in its outcomes. AI's algorithms must be transparent to be trusted in, so that the accuracy of AI outputs would be more assured.
In order to solve the problem of explainable AI, it may be useful to use blockchain's immutable digital record to gain a greater understanding of the concept of AI and the source of the data it uses. This may contribute to enhancing confidence in the accuracy of the data used by AI and, consequently, in the suggestions that AI provides.
Data accessibility
Blockchain enables access to data both inside and outside of an organization, allowing for more actionable insights, better control over data consumption, and model sharing, all of which can contribute to the growth of AI. This might lead to the development of a more reliable and open data market.
Automation
By requiring less human involvement in multiparty business operations, combining AI with blockchain may add value. Blockchain technology has the potential to eliminate potentially pointless third parties from multi party transactions, which, in principle, might speed up those transactions and improve their overall efficiency.
Computing ability
AI can demand a lot of processing power and resources that centralized data servers may not be able to accommodate. By using the computing power of several devices, blockchain and other distributed ledger technologies may be beneficial.
In conclusion, the combination of AI with blockchain has the potential to create a more safe, transparent, and efficient future. We should expect to see even more intriguing applications and use cases emerge as these technologies continue to mature.
Disclaimer: The information herein is for reference purposes only and should not be considered financial, investment, or trading advice. Please conduct your own research and due diligence before making investment decisions. You understand that you are using the Information provided at your own risk.