Simply put, AI is the idea and practice of creating intelligent-looking robots. To make this happen, machine learning, artificial neural networks, and deep learning are being developed.
The blockchain is an innovative digital file system that stores data in an encrypted distributed ledger format. Because data is encrypted and distributed across multiple computers, it can be used to create secure databases that only authorized users can access.
For example, here are three ways that artificial intelligence (AI) and blockchain complement each other.
AI and encryption work well together
The data stored on the blockchain is by definition secure due to the encryption used.
This means that blockchain is ideal for storing highly sensitive personal data and, if properly processed, can bring out a wealth of value and convenience. Consider an advanced medical system that makes accurate diagnoses based on scans and data, or the recommended engine that Amazon and Netflix use to recommend what to buy or watch next.
The companies that trade it have to spend a lot of money to meet their data security requirements.
Still, large-scale data breaches that lead to the loss of personal data are becoming more regular. Many AIs can also be provided in terms of security. A new topic in AI focuses on developing algorithms that process (process or manipulate) encrypted data.
Blockchain can monitor, analyze, and explain AI decisions
People do not always understand AI decisions. You can “learn” by individually examining the many factors that determine your overall goals. You can use the AI algorithm to determine if a financial transaction is fraudulent and needs to be suspended or investigated.
For example, Wal-Mart puts monthly sales data into an AI algorithm to determine what to sell and where to sell it.
Saving the selections one point at a time to the blockchain facilitates validation and ensures that the records have not changed between the time they are recorded and the time the validation process begins.
Transparency and insight into the robot’s brain can be achieved by recording the decision-making process on the blockchain.
AI can handle blockchain better than humans (or “stupid” computers)
Computers are always fast, but stupid. Computers cannot perform tasks without specific instructions. Because blockchain data is encrypted, it requires a lot of computing power to be used on “dumb” machines.
For example, the hash algorithm used to mine blocks in the Bitcoin blockchain uses a “brute force” method to test all possible character combinations until a suitable character is found.
Also, AI is great for predicting prices in volatile cryptocurrency markets.
For example, the popular crypto wallet Crypterium is using its AI-based system with more than 200 factors, 101 trading alphas, and a self-learning algorithm to predict prices for more than 140 coins with a 93% accuracy rate.
AI is an attempt to make activities smarter and more thoughtful. Think about how human cryptanalysis specialists can improve and become more efficient as they break more ciphers.
Blockchain and AI are two technological phenomena, which, when combined, can be far more destructive. Both help improve each other’s skills while improving monitoring and accountability.