The New Power Duo: AI and Blockchain

According to Gartner, business value enhanced by AI-blockchain technology will increase to $3.1 trillion dollars by 2030.

By Scott Simone, Contributor

Early last year, ORS Group, a global provider of algorithms and software solutions for optimizing value chains, announced its break into the blockchain scene, with a small twist that’s becoming a growing trend: The company combined blockchain with the power of artificial intelligence (AI).

The move came from a simple realization that blockchain, used by decentralized and independent parties, is at its most basic level a place for collecting and sharing information. That information, of course, can be automatically supplied by AI. Thus, the team formulated what they call the new “Digital Alphabet,” connecting the burgeoning technologies of AI, blockchain, and cryptocurrency into what they dub “Hypersmart Contracts.”

These Hypersmart Contracts, utilizing data stored on blockchain, act as a sort of AI-powered brain that can seek out and solve complex efficiency and optimization problems, allowing the company to instantly release cryptocurrency payments. This new breakthrough by ORS Group can very well help usher in a new age in global value chains, which even small farmers can benefit from, evidenced by the company’s goal to empower one billion small entrepreneurs by 2040.

For example, specific AI algorithms can be used to predict crop yields along with price optimization, while blockchain can be used to provide transparency about the whole food chain, according to the company. Lastly, cryptocurrency can be utilized by farmers to receive immediate payments.

But ORS Group’s Hypersmart Contracts is just one example of a growing trend of combining these emerging technologies. “The combination of AI and blockchain technology is an evolving field across the tech ecosystem as companies use this combination to stay competitive,” said Rohan Pinto, a senior identity and access management architect who founded 1Kosmos, a blockchain identity management company. “The unlimited benefits of AI are no longer limited to high profile industries and corporations. Their uses are now in music streaming, cryptocurrency trading, avatar-based legacy, social media, search engines, etc.”

In fact, there’s no limit to why—and how—these two technologies are merging into one hugely beneficial force.

A Mutually Beneficial Arrangement

According to Gartner, business value enhanced by AI-blockchain technology will increase to $3.1 trillion dollars by 2030. The value produced by this AI-blockchain convergence is largely a symptom of the two technologies’ transformative potentials.

“The current tidal waves of new technologies and social disruption are symptoms of a much bigger change: The very internet itself is being transformed, evolving from a loosely structured communications medium to a trusted execution medium,” according to Alex Pentland, an MIT Professor and the director of the Connection Science and Human Dynamics groups at the university’s Media Lab.

Pentland sees blockchain and AI as something of a solution for a set of very real 21st century challenges. These include, he noted, “the deluge of big data, the growth of the IoT, increasing automation and robotics deployment, use of the cloud, various threats to cybersecurity, mobile computing, and the growth of cryptoassets.” He believes blockchain and AI are the right—and perhaps only—tools to help humans address these issues. “Blockchain and AI have the potential to finally allow both companies and citizens to safely and securely do business with each other—to let each party know who they are dealing with, confirm the interaction is not fraudulent and the outcomes guaranteed,” he said.

But just what are the benefits of co-opting blockchain to improve AI, and vice versa?

One of the biggest benefits comes in the form of safer encryption. That’s because, separately, AI depends on data and uses it to improve itself, while blockchain allows total encryption of data stored on a decentralized system that only an authorized user can access.

“Integrating both AI and blockchain implies having a protected, decentralized AI system that is very secure, incorruptible, and transparent,” said Pinto. “Since AI, which is an autonomous machine, requires a high level of security to reduce the rare occurrences of catastrophe, combining it with a blockchain network can help it to achieve [that] high level of security, which can be used for making financial transactions, for example.”

This secure access leads to validated data inputs for AI. “The algorithms being generated by AI require data that is verified and has the integrity to be an input into the predictions the AI is generating,” explained Joshua Gans, who holds the Jeffrey Skoll Chair in Technical Innovation and Entrepreneurship at the Rotman School of Management, University of Toronto. “Thus, if blockchain is a way of providing that [verified] data, then the two naturally benefit [each other].”

On another level, combining these two technologies possesses deep potential to use data in unique ways, and makes AI more flexible. “Integrating blockchains help to acquire data faster and cleaner,” said Pinto. “The successful integration of these technologies encourages easy verifications of transactions, smooth data management, and identification of illegitimate documents.”

According to Gans, combining AI with blockchain may help organizations overcome issues of data integrity, such as proving people’s identity or easily determining if data is being misrepresented. This data integrity, he added, “could have far reaching effects on the law, accounting, and international trade.”

The Duo Is Taking on the Real World

While the marrying of AI and blockchain technologies may still sound like futuristic navel-gazing, it’s already being implemented in a bevy of ways that may very well impact industries in years to come.

“AI can be used to potentially provide novel contracting solutions that can be placed on blockchain,” said Gans, alluding to similar technology implemented by ORS Group. “Most contracts are triggered by a certain event. AI is all about good prediction. Thus, AI in a smart contract [with] blockchain could allow contractual terms to be triggered by predicted events.”

But Gans finds the most promising examples of the AI-blockchain power duo in its ability to verify data. For instance, he points out a Creative Destruction Lab company, Big Couch, which plans to use AI to verify the revenues being earned by films so that the various agents who have claims on that revenue can be paid. The revenue is then put on blockchain and distributed to the potentially hundreds of claimants.

In a similar vein, Pinto points out Enigma, a company that has built a data marketplace that enables complex computations to be done securely on blockchain. The current way of sharing data between parties can often be risky, without the ability to securely monitor how the data is being used. For instance, someone who buys data on a marketplace can then turn around and redistribute it themselves, creating a sort of pirate marketplace. But with Enigma’s new data marketplace, coined Catalyst, users can easily contribute data to specific subscribers, who can then consume that data via smart contracts.

The Big Picture

As the trend continues to develop, companies and individuals are already seeing the benefits of combining two of the most important technologies of this day-in-age. By marrying blockchain and AI, not only are people seeing increased security in data alongside more optimized utilization of that data, they’re finding solutions to some of today’s most glaring challenges.

As Pentland summed up effectively: “It’s not just about blockchain. It’s not just about AI. It’s about how these things fit together in a human fabric. Now that we run our entire society on various technologies, they can’t fail and have to be auditable and transparent.”