AI and Blockchain Integration Boosting Growth of Crypto Space

• 1 Blockchain and AI are the two advanced technologies that can bring further innovation to their respective spaces through integration.
• 2 AI and blockchain can complement each other and development in both industries can boost the growth of crypto markets.
• 3 AI can be used to generate warnings and protect users in the blockchain space.

Crypto and artificial intelligence (AI) are the two important technology trends of the past and current decades. There are always discussions about the connection and intersection between these two growing technologies. Some synergies are easy to recognize at superficial levels, such as crypto decentralization, which can balance out the centralization of AI.

The creator and developer of Ethereum, Vitalik Buterin, has recently posted a blog post on his X account discussing the impact of the integration of AI and blockchain, or cryptography. Artificial intelligence is opaque, whereas crypto brings transparency; AI requires data; and blockchain facilitates the storing and tracking of data. 

He said that when he is usually asked about the integrated implementation of both technologies, he does not have much to say and it is disappointing for others to hear.

Developments in Crypto and AI in the last three years

In the last three years, the AI space has witnessed the rise of much more powerful tools in the form of modern large language models (LLMs). The crypto space has undergone innovation not just with  blockchain scaling solutions but also with solutions such as zero-knowledge proofs (ZKPs), fully harmonic encryption (FHE), and multi-party computation (MPC) between two parties and N-parties.

There have been some promising applications of AI in the blockchain industry, and in addition to cryptography, it can offer some interesting applications. However, it is crucial to be careful about the implementation of AI.

The most significant challenge is related to cryptography, as open-source is the only way to create something with total security but the openness of an AI model can increase the risks of adverse machine learning attacks. 

The picture above depicts the differentiated characteristics of AI and blockchain in the form of a Venn diagram and the shared area specifies the synergies achieved with the integration.

Buterin further discussed the integration of crypto and AI and segregated it into four different categories.

Categories in the Integration of AI and Blockchain

AI is a concept that is based on algorithms that can be created without specifying them explicitly. However, it creates algorithms with user-specific requirements. 

The process is not complete without human interactions, as humans provide instructions. AI algorithms have properties such as their ability to do things that are extremely powerful, together with limits in human capability to understand what’s going on.

There are certain ways of categorizing AI for different purposes of intersection of AI and blockchains. It is categorized as:

AI as a player in integration (highest viability)

Artificial intelligence is participating in mechanisms where a protocol with human inputs is the ultimate source of incentives for the players.

AI as a Convergence Interface (high potential but with increased risks)

Artificial intelligence helps users understand the world of crypto surrounding them. It is done to ensure that human behavior, such as signed messages and transactions, matches their intentions and there are fewer chances of getting tricked or scammed.

AI as the rules of integration (Process with caution)

The direct implementation and integration of blockchains, DAOs and similar mechanisms into artificial intelligence can introduce several risks, of which all users should be cautious.

AI as the objective of growth (Longer-term but Interesting)

Designing blockchains, DAOs and similar mechanisms to construct and maintain artificial intelligence that can also be used for other purposes. This can be done by utilizing the technology of crypto either to increase incentivization training or to prevent artificial intelligence from harming private data while also avoiding the misuse of private information.

Conclusion

With the growth of both blockchain and AI, both technologies are experiencing higher adoption, thus increasing their strength. This will lead to an increase in the number of use cases for the amalgamation of both technologies. 

The current challenge to be overcome is to use blockchains and cryptographic technology to create a single decentralized, trusted AI platform. 

This integration will improve the functionality and safety of AI implementation. However, there are high probabilities of failure so it is advised to be careful in the deployment of these applications.

FAQs

How can AI interfaces help crypto users?

AI interfaces can help users know probable malicious activities in advance by using AI algorithms to identify similar patterns.

What is the major risk introduced with integration?

Interested fraudsters can review codes to launch hacks and scams that would not have AI-enabled defenses on the wallet.