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When disruptive technologies interact – AI & crypto

Jure Brence, December 2021

Among the many flashing and buzzing headlines of recent years, the terms »cryptocurrency« and »artificial intelligence« probably place high on most people’s radars. It should come as no surprise that finding ways to combine the two paradigms is an exciting and attractive proposition.

In a previous post, we discussed how AI is already being used in finance to predict market trends and help investors, safeguard against fraud and security breaches, enhance risk assessment and aid customers through personalized finance. Many of these AI applications are similar in the world of cryptocurrency. The use of trading bots by everyday people is especially prevalent among cryptocurrency speculators, perhaps due to the high volatility of the coins and the fact that the crypto markets operate 24/7. The sophistication of these bots ranges from the simplest trading scripts to advanced AI trading agents.

But most enthusiasts would argue that blockchain technology offers much more than speculation opportunities. CoinMarketCap, the world’s most popular price tracking website, lists over 8000 cryptocurrencies, with more being created every day. Many of these represent ambitious startups and projects.

For this post, we decided to delve into the maze of crypto projects in search of disruptive applications, combining blockchain and AI. We present a few of the more fascinating ones that are either backed by reputable names or have managed to gather considerable support of the crypto community. Of course, it can be very challenging to judge the potential and legitimacy of a crypto project, but the aim of this article is simply to keep exploring the myriads of ways AI can be applied in innovative ways.

Fetch.AI

What is it? An ambitious project, building a decentralized machine learning network to enable smart infrastructure. More specifically, the envisioned use cases involve many smart city applications, such as delivery agents, autonomous AI travel agents, commodity exchange, smart parking, etc.

What role does blockchain play? The network is based on the Fetch.AI blockchain, which provides secure sharing, auditing and transactions through smart contracts. It also provides a unified global marketplace for services and data-sharing, as well as model-sharing, through a peer-to-peer file system.

How does AI help? Fetch.AI provides a framework for building and deploying AI agents that represent individual customers, as well as individual providers of various services. The framework discovers and connects AI agents, which then negotiate contracts based on the needs and preferences of their owners.

Further reading: official website.

IPwe

What does it do? Working with IBM, IPwe seeks to bring the intellectual property market to blockchain. Their focus so far has been on establishing a radically more efficient global patent registry and marketplace.

How is blockchain used? Each patent is represented by an NFT (non-fungible token), which contains all the patent content and information, each part of which can be shared publicly or kept private. Smart contracts enable the easy trading, transferring and licensing of patents.

Where does AI come in? IPwe utilizes AI and machine learning methods such as nature language processing and predictive analytics to make sense of the millions of patents circulating globally. AI generates summaries and reports that help users identify opportunities and avoid risks.

Further reading: official website, IBM case study

Velas

What is it? An AI-operated blockchain and smart contract platform, seeking to compete with the big names by dramatically increasing the transactions per second possible and ensuring low fees for users. The performance of every proof-of-stake blockchain depends heavily on the way their consensus algorithm is managed, especially as the userbase and number of transactions increases. Velas hands these operations over to an AI that dynamically calculates the optimal reward for node operators, stakers, and block discovery times and in this way maximizes throughput, as well as decentralization, stability and security.

How is AI used? Artificial intelligence is the key piece that the project is built upon. At its core is a recommender model, based on neural networks. Data is provided from the historical behavior of the network itself, as well as from simulations that model various possible scenarios. The model recommends new parameters and adjustments, which are recorded in a smart contract and applied in the live network.

Further reading: official website, blockchain details, AI details

Ocean Protocol

What is it? The Ocean Protocol is a decentralized marketplace for data that allows data to be shared and sold in a safe, secure and transparent manner.

How does this relate to AI? The popular verbiage »garbage in, garbage out« states that AI can only be as good as the data used to train it. Access to large amounts of quality data is often the bottleneck to AI applications. On the other hand, the importance of ethical AI and data governance is increasing as more and more concerns are raised about the modern AI infringing on the privacy of citizens. Ocean Protocol seeks to address these challenges.

How does blockchain help? By tokenizing data on the blockchain, its provenance is securely tracked, enabling precise access control. Through the compute-to-data paradigm, access to train specific models can be given without exposing private data. The decentralized marketplace allows easy data access to AI developers, while providing an opportunity for those who gather data or curate datasets to readily monetize their assets.

Further reading: official website.