What can AI do for blockchain?
The operation and architecture design of blockchain involve many trade-offs that open up the possibility of breaches.
1. AI improves the security and scalability of blockchain
Blockchain is incredibly secure and almost impossible to hack — unless the adversary owns or controls the majority of the network. But when we look at applications that are built on top of blockchain, unfortunately they are not as secure as the underlying blockchain infrastructure. They are vulnerable to attacks.
For example, the Decentralised Autonomous Organisation (DAO) — A crowdfunded group with an estimated worth of over $150 million in Ether — fell victim to a $50 million theft6. Several mistakes made in the writing of smart contracts allowed the hacker to exploit the system and run repeated transactions and withdraw more money than the fund put in.
Fortunately for us, advancements in machine learning allow us to detect such attacks. The idea here is to have a blockchain monitored by an intelligent machine learning algorithm that will detect the presence of an attack or malicious user and automatically invoke necessary defensive action.
2. AI can boost blockchain privacy and personalisation
Citizens in many countries are rightly worried about the integrity of democracy through fraudulent elections — as we’ve recently seen in the US.
This follows major concerns about personal data being used by politicians for campaign purposes, as was the case with the Cambridge Analytica scandal. If you are worried about the privacy of your data, then blockchain is perfect for you as it puts you back in control of your data.
As a solution, there is a social networking platform on blockchain which leverages an AI machine learning Algorithm. Here the user has the right to their own data while the AI learns to predict user behaviour and display personalised content for the user.
The idea of combining blockchain and AI has been around for quite some time now. The combination of the two technologies does lead to a few challenges that are hard to overcome. Firstly, the speed with which AI processes data would simply not match most of the Blockchains. Secondly, security with IOT devices is another major concern given the rise of Cryptojacking.
Although these challenges are hard to overcome, they are by no means impossible. A successful integration would lead to the creation of a model that is transparent and can automate transactions at scale while protecting privacy. This will open up opportunities for new financial service companies to produce and go to market with products that are faster, more reliable, cheaper, and with less middlemen.
6. https://www.wired.com/2016/06/50-million-hack-just-showed-dao-human/