Both have had an enormous impact on today’s technological innovations. Although they work, developers are researching whether they can make a perfect combination.
According to PWC, AI will contribute about $15.7 billion to the global economy by 2030. Gartner’s forecast blockchain will add a value of $3.1 trillion to business the same year. This shows that the future of Artificial intelligence and blockchain is luminous.
So, let’s dive deeper and understand blockchain and AI technology. The article will also show you what will happen if these two are combined, their differences and the benefits of their combination.
What is Blockchain?
A blockchain is a decentralized ledger of secure, changeless data that parties can share as they begin and complete transactions. It is a series of blocks containing data. Blockchain ensures that digital documents have a timestamp that makes it impossible to tamper with them. It allows you to avoid double-record problems without relying on a central server.
With the blockchain, you can securely transfer items like agreements and money without a third party, such as the government or a bank. The information that is inside the blockchain is almost impossible to alter. Additionally, it ensures transparency and immutability to prevent data modification.
Let’s have a look at the two primary blockchain consensus mechanisms:
Proof of work (POW): is a consensus algorithm commonly used by digital currency networks such as bitcoin, ethereum, and litecoin. Developers use this algorithm to solve computationally complex problems and generate blocks. As soon as they create a block, they are paid and can collect transaction fees.
Proof-of-state (POS) blockchains: POS is an alternative consensus algorithm to POW. It randomly selects users whose ‘stake’ tokens (used to develop and approve blocks) are locked in the blockchain. They then receive payments following the total stake generated or validated.
Bitcoin commonly uses proof-of-state. POS is relatively cheap and enhances low energy consumption.
What is Artificial Intelligence?
Artificial Intelligence (AI) is the ability to mimic human intelligence using computers and machines developed to work like humans and complete their actions. Essentially, AI refers to any device that demonstrates human mind characteristics, including problem-solving and decision making.
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AI offers benefits such as automation of repetitive tasks, minimal human errors, improved decision making, and excellent customer experience. The development of artificial intelligence involves developing machine learning codes for computers with greater computing power.
Now that you understand what AI and blockchain are, let’s look at their combination.
Artificial Intelligence Vs. Blockchain
A study by the International Data Corporation shows that worldwide revenues on AI stands at $327.5 billion this year. Interestingly, over 50% of companies are using the blockchain and AI combination.
There is a different level of complexity for every technology. So, can AI and blockchain benefit from each other?
Let’s find out.
When combined, blockchain will provide privacy and confidentiality to Artificial Intelligence. On the other hand, AI can contribute its expertise to developing machine learning systems based on blockchains, which allow security and transparency.
Additionally, blockchain can make Artificial Intelligence more meaningful. It will provide a deeper understanding of the reasons for making machine learning decisions. Blockchain and its ledger can enhance the accurate recording of all information that goes through the decision-making processes of AI algorithms.
Further, a combination of blockchain and AI can improve blockchain efficiency. For instance, Artificial Intelligence could automate audit trail monitoring in blockchain management.
What are the differences between Artificial intelligence and blockchain?
Artificial Intelligence and blockchain have their own degree of technological complexities and perform different tasks. The following are three significant differences between AI and blockchain.
- Blockchain technology is a decentralized technology, while Artificial Intelligence is centralized.
- AI concepts and algorithms are complicated, while blockchain is straightforward to understand and offers greater transparency.
- Blockchain provides data privacy and accountability to AI. On the contrary, Artificial Intelligence gives its knowledge to generate machine learning systems using blockchain as the base.
Benefits of combining AI with blockchain
Data Encryption
The security of data is highly at risk with artificial intelligence. In contrast, blockchain stores encrypted information in a distributed ledger. It allows the generation of secure databases that only authorized parties can access.
So, combining blockchain and AI could provide a significant advantage when it comes to storing sensitive and valuable information. Additionally, smart processing of data could increase convenience and efficiency.
Understanding AI decisions
Ai’s complex algorithms make it difficult for humans to understand its decisions. AI algorithms process vast amounts of variables and data, making the audit process cumbersome.
Blockchain technology provides immutable records of every variable, data, and process that the AIs use to make decisions. This makes the auditing process more straightforward.
Blockchain AI creates confidence in the decisions made by AI systems. You will understand how AI programs work and the information they use to make their decisions.
Monetization of data
Monetization of data is an excellent source of revenue for giant companies such as Google and Facebook.
However, feeding AI with data can be extremely expensive, especially for companies that do not create their data. Blockchain offers decentralized marketplaces for data that you can be able to access at zero cost. You will have the freedom to choose what to do with the data. You can decide to monetize it without any compromise of your personal information.
Bottom line
Researchers are still researching to find out whether combining blockchain and AI will make a perfect companion.
As we have seen, both technologies can benefit from each other. For example, blockchain helps secure data and helps you in auditing the steps AI takes to make decisions from the data. Additionally, it gives you the freedom to monetize information. On the other hand, Artificial Intelligence increases transaction speed and ensures effective use of resources of blockchain applications.
Artificial intelligence and blockchain will unlock many innovations in the coming years. So, it would be advisable to learn more about these technologies to have a better understanding so that you are not left behind.
