The Latest AI Trend in the Blockchain Industry

Artificial intelligence (AI) is one of the most disruptive technologies of our time and has been the latest trend in all sectors of industries. The growing boom and public attention came when ChatGPT, a large language model chatbot, was developed by OpenAI and first announced in November 2022. It quickly became popular, reaching 1 million users in just five days (OpenAI, 2022). Other AI chatbots soon followed and the number of people using AI-powered chatbots is growing rapidly. In 2022, it is estimated that over 2.5 billion people will have interacted with an AI-powered chatbot (Grand View Research, 2021). This number is expected to grow to over 4 billion by 2025 (Grand View Research, 2021). A notable growing trench in the use case for AI is in the blockchain industry. AI is being used to improve the security, efficiency, and scalability of blockchain networks, and it is also being used to develop new applications for blockchain technology.

What is AI?

Artificial intelligence (AI) is a branch of computer science that deals with the creation of intelligent agents, which are systems that can reason, learn, and act autonomously (Russell & Norvig, 2016). AI research has successfully developed effective techniques for solving a wide range of problems, from game playing to medical diagnosis.

What is blockchain?

Blockchain is a distributed ledger technology that allows for secure, transparent, and tamper-proof transactions. It is a decentralized database that is shared across a network of computers. Each block in the chain contains a set of transactions, and each block is linked to the previous block using cryptography. This makes it very difficult to tamper with or change data on the blockchain (Nakamoto, 2008).

Latest Trends in AI and Blockchain

AI and blockchain are two of the most transformative technologies of our time. AI has the potential to automate tasks, improve decision-making, and create new products and services. Blockchain has the potential to create secure, transparent, and tamper-proof systems. There has been a growing trend of using AI technology in the blockchain industry.

One of the latest AI trends in the blockchain industry is the use of AI for fraud detection. For example, CipherTrace is a blockchain analytics company that uses AI to detect fraudulent activity on blockchain networks. The company's AI-powered platform can analyze transaction data to identify patterns that may indicate fraudulent activity. This data can then be used to investigate and prevent fraud (CipherTrace, n.d.). AI can be used to analyze large amounts of data to identify patterns that may indicate fraudulent activity. This can help to protect blockchain networks from hackers and other malicious actors.

Another AI trend in the blockchain industry is the use of AI for smart contract optimization. Smart contracts are self-executing contracts that are stored on a blockchain network. They can play a key role in automating various processes or functions on the network as stated by Szabo (Szabo, 1997). The leading company in the field is Chainlink, a decentralized Oracle network that provides smart contracts with access to real-world data (Chainlink Labs,n.d.). The company uses AI to optimize smart contracts by making them more efficient and secure (Chainlink Labs, n.d.). Chainlink has been used by a number of companies to optimize their smart contracts. For example, the company was used by Synthetix to create a decentralized derivatives exchange (Synthetix, n.d.). Chainlink was also used by Band Protocol to create a decentralized Oracle network (Band Protocol, n.d.). AI can be used to optimize smart contracts by making them more efficient and secure.

Another AI trend in the blockchain industry is the use of AI for smart contract optimization. Smart contracts are self-executing contracts that are stored on a blockchain network. The leading company in the field is Chainlink, a decentralized Oracle network that provides smart contracts with access to real-world data. The company uses AI to optimize smart contracts by making them more efficient and secure. Chainlink has been used by a number of companies to optimize their smart contracts. For example, the company was used by Synthetix to create a decentralized derivatives exchange. Chainlink was also used by Band Protocol to create a decentralized Oracle network. While both technologies are still at their infant stage, there is a growing use case of how AI can be used to optimize smart contracts by making them more efficient and secure.

Finally, AI is also being used to develop new applications for blockchain technology. For example, AI is being used to develop decentralized autonomous organizations (DAOs) like Aragon, a DAO platform that allows anyone to create and manage a DAO (Aragon Association, n.d.). Aragon's AI-powered platform can help to automate the voting process, manage resources and assets through governance, and greatly improve security through automated monitoring and screening (Aragon Association, n.d.). Since DAOs are organizations that are run by code and do not have any central authority, AI can be used to help DAOs make decisions, manage their finances, and protect their assets.

The use of AI in the blockchain industry is still in its early stages, but it has the potential to revolutionize the way blockchain technology is used. AI can help to make blockchain networks more secure, efficient, and scalable. It can also help to develop new applications for blockchain technology. As AI technology continues to develop, we will likely see even more innovative uses of AI in the blockchain industry.

Future Aspects of the Blockchain Industry Utilizing AI

The future of the blockchain industry is bright, and AI is playing a major role in its development. AI is being used to improve the security, efficiency, and scalability of blockchain networks. It is also being used to develop new applications for blockchain technology. As AI technology continues to develop, we can expect to see even more innovative uses of AI in the blockchain industry.

Here are some of the future aspects of the blockchain industry utilizing AI:

Fraud detection: •  Fraud detection: AI can be used to detect fraudulent activity on blockchain networks. For example, AI can be used to monitor transactions and identify anomalies or suspicious patterns. This can help to prevent fraud and protect users' funds. One of the companies that are working on this aspect is Elliptic, a blockchain analytics company that uses AI to detect illicit activity on crypto transactions (Elliptic,n.d.). Elliptic's AI-powered platform can identify and trace criminal activity on over 100 crypto assets, such as money laundering, terrorism financing, or ransomware payments (Elliptic, n.d.).

Examples of companies using AI for fraud detection in blockchain networks:

• Chainalysis
• Trezor
• Ledger
• BitGo
• Coinbase
• Binance
• Huobi
• OKEx

Smart contracts: AI can be used to improve the performance and security of smart contracts. For example, AI can be used to automatically test and verify smart contracts for bugs or vulnerabilities. This can help to avoid costly errors or exploits. One of the companies that is working on this aspect is Quantstamp, a blockchain security company that uses AI to audit smart contracts (Quantstamp, n.d.). Quantstamp's AI-powered platform can scan smart contracts for potential issues and provide feedback and recommendations (Quantstamp, n.d.).

Examples of companies utilizing AI for smart contract optimization:

• Provable
• Band Protocol
• Tellor
• Gnosis
• Augur

Decentralized autonomous organizations (DAOs): AI can be used to enhance the functionality and governance of DAOs. For example, AI can be used to automate tasks, optimize resources, and resolve conflicts within DAOs. This can help to improve the efficiency and effectiveness of DAOs. One of the companies that is working on this aspect is DAOstack, a DAO platform that uses AI to facilitate collective decision-making and resource allocation (DAOstack, n.d.). DAOstack's AI-powered platform can help DAOs to achieve their goals and objectives through a decentralized governance system (DAOstack, n.d.).

Examples of companies utilizing AI for DAO:

• Swarm
• Unstoppable Domains
• MakerDAO
• Compound

Blockchain-based healthcare: AI can be used to improve the quality and accessibility of healthcare data and services. For example, AI can be used to securely store and share medical records, diagnose diseases, and recommend treatments on the blockchain. This can help to improve patient care and reduce costs. One of the companies that is working on this aspect is doc.ai, a blockchain-based healthcare platform that uses AI to provide personalized health insights and solutions (doc.ai, n.d.). doc.ai's AI-powered platform can collect and analyze health data from various sources and provide users with actionable insights and recommendations (doc.ai, n.d.).

Examples of companies utilizing AI for blockchain-based health care:

• Ambrosus
• Encrypgen
• Heal.me
• Patientory
• Verida

Blockchain-based supply chain management: AI can be used to optimize the transparency and efficiency of supply chain management. For example, AI can be used to track the origin and movement of goods, verify the quality and authenticity of products, and predict demand and supply on the blockchain. This can help to reduce waste, fraud, and inefficiencies in the supply chain. One of the companies that is working on this aspect is Ambrosus, a blockchain-based supply chain platform that uses AI to ensure the quality and safety of food and pharmaceutical products (Ambrosus, n.d.). Ambrosus' AI-powered platform can monitor and verify the conditions and locations of products throughout the supply chain and provide users with real-time data and insights (Ambrosus, n.d.).

Examples of companies utilizing AI for blockchain-based supply chain management:

• Walmart: Walmart is using blockchain to track the movement of food products from farm to shelf. This helps to ensure that food is safe and that it is not being counterfeited.
• IBM: IBM is working with several companies to develop a blockchain-based supply chain management platform. This platform will allow companies to track the movement of goods and services in real-time.
• Maersk: Maersk is using blockchain to track the movement of shipping containers. This helps to improve efficiency and reduce costs.
• UPS: UPS is using blockchain to track the movement of packages. This helps to improve customer service and reduce fraud.
• DHL: DHL is using blockchain to track the movement of freight. This helps to improve efficiency and reduce costs.

These are just a few of the ways that AI is being used to transform the blockchain industry. As AI technology continues to develop, we can expect to see even more innovative uses of AI in the blockchain industry in the years to come.

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Sources

References

•  Ambrosus. (n.d.). Ambrosus: Blockchain-powered IoT network for food and pharma supply chains. Retrieved from https://ambrosus.com/

•  Aragon Association. (n.d.). Aragon: Build unstoppable organizations on Ethereum. Retrieved from https://aragon.org/

•  Band Protocol. (n.d.). Band Protocol: Decentralized data governance protocol for Web 3.0 applications. Retrieved from https://bandprotocol.com/

•  Chainlink Labs. (n.d.). Chainlink: Your smart contracts connected to real-world data, events, and payments. Retrieved from https://chain.link/

•  CipherTrace. (n.d.). CipherTrace: Cryptocurrency intelligence. Retrieved from https://ciphertrace.com/

•  doc.ai. (n.d.). doc.ai: Blockchain-based healthcare platform powered by AI. Retrieved from https://doc.ai/

•  Elliptic. (n.d.). Elliptic: Cryptoasset risk management solutions for businesses and financial institutions. Retrieved from https://www.elliptic.co/

•  Grand View Research. (2021). Artificial intelligence chatbots market size, share & trends analysis report by component (software, hardware), by deployment (cloud, on-premise), by end-use (customer service, sales, marketing, human resources), and segment forecasts, 2022 - 2029. Retrieved from https://www.grandviewresearch.com/industry-analysis/artificial-intelligence-chatbots-market

•  Nakamoto, S. (2008). Bitcoin: A peer-to-peer electronic cash system. Retrieved from https://bitcoin.org/bitcoin.pdf

•  OpenAI. (2022). ChatGPT: A large language model chatbot powered by GPT-3. Retrieved from https://openai.com/blog/chatgpt/

•  Quantstamp. (n.d.). Quantstamp: Blockchain security company that audits smart contracts and protocols using AI. Retrieved from https://quantstamp.com/

•  Russell, S., & Norvig, P. (2016). Artificial intelligence: A modern approach (4th ed.). Pearson.

•  Synthetix. (n.d.). Synthetix: The derivatives liquidity protocol on Ethereum. Retrieved from https://www.synthetix.io/

•  Szabo, N. (1997). Formalizing and securing relationships on public networks. First Monday, 2(9). https://doi.org/10.5210/fm.v2i9.548