What is Blockchain Technology?

Digital currencies or if we go more precisely, cryptocurrencies are the future. There are still many shortcomings and vulnerabilities associated with them as we all know a sudden crash witnessed by Bitcoin in early 2018. However, in our world, there is no going back. People have tasted the usefulness, freedom, and sense of security with the digital currencies and now they are the ones who will make it a pure success. Still, most of the governments and banks have not even considered the possibility of adopting crypto or digital currencies but like we said earlier in an article, like it or not, it is coming.

Satoshi Nakamoto, the inventor of cryptocurrency is unknown to us but not his excellent and extraordinary work. Earlier, in an article, we discussed the smallest unit of Bitcoin known as Satoshi. We have received an overwhelming response of said article and readers have asked us to explain the things related to cryptocurrencies. We know that it’s not one of those concepts which are easily comprehensible, so keep visiting us if you have plans in investing in cryptocurrency or just want to be knowledgeable.

In any financial system, the transactions and their recording have the principal significance. Same is the case with cryptocurrency. Nakamoto knew without a proper and efficient ledger there will be no future of digital currency. That compelled him to create Blockchain.

What is Blockchain?

Let’s get in a situation. If a person named Philips wanted to send 1,000 euros to another person called Johnny, it is normal for the transaction to be carried out through a bank. Essentially, the bank acts as an intermediary between one side & the other, allowing capital to move from one side to the other.

Philips would ask his bank to withdraw 1,000 euros from his account and transfer them to Johnny’s account: in just a few hours (depending on the bank, of course) that bank will have written down the transaction in his account, subtracting 1,000 euros from his account and communicating to the other bank that you must add 1,000 euros to Johnny’s account. Someone in Johnny’s bank (at this point, we already know that someone is a computer program) will note that in his account there are 1,000 euros more coming from Philip’s bank account.

The current management has effectively managed the financial transactions without the need for interchanging bills. The transfer of funds has been possible through the intermediation of one or two banks, & the process has been smooth with a slight balance alteration in their accounts. However, there is a catch. Despite the flawless operation, one issue stands out which needs to be addressed to guarantee effortless financial efficacy.

That neither Philip nor Johnny have any control over the process, of which only those banks have all the information. The completion of that transaction depends on the banks & how they do things.

That’s where the blockchains come in, which basically eliminates intermediaries, decentralizing all management. In this system, the power resides with the users, not the banks. While we may be discussing transactions involving money, this concept can apply to various types of transactions. As participants in a massive network of nodes, users effectively become part of a decentralized bank. With millions of individuals managing & participating in the system, there is no need for a central authority to control the process. Instead, users together maintain & regulate the account books. This setup guarantees transparency & security & makes it a highly effective mode of transaction.

So, a gigantic book of accounts in which records (the blocks) are linked and encrypted to protect the security and privacy of transactions.

In the realm of blockchain, the verification of transactions is a crucial element that entails the participation of numerous nodes or users. Their responsibility is to examine & authorize these transactions for them to be registered in the massive ledger of accounts known as the blockchain. While the process is uncomplicated, it requires the involvement of a considerable number of users. Philip & Johnny have now joined a diverse group of people dedicated to ensuring that the entire chain of events proceeds as scheduled. As they assume this charge, they become an integral part of a crucial mechanism that supports the validity & security of the blockchain.

The blockchain is not only a distributed & secure account book, but also a sophisticated technology that guarantees the transparency of transactions while protecting the user’s privacy. Each block in the chain contains a coded pointer that links to the previous block & includes a timestamp & data of the transaction. This information is accessible publicly & allows complete traceability of the transactions. With its advanced features, the blockchain gives a high level of security, efficiency & accuracy for a wide range of digital transactions.

Or what is the same: it allows to know all the way that the bitcoin of the portfolio that belongs to someone has followed (in this case to Philip, although his identity is not known by the rest of users) before arriving at the portfolio of another someone (of Johnny, although his identity is not known by the other users).

The design of the blockchain itself has clear advantages, and for example, it confirms that each unit of value (for example, each bitcoin) has only been transferred once, which makes fake currency or double spending out of prospects.

Blockchain and Artificial Intelligence, an Ideal Couple?

Artificial intelligence and blockchain are currently two of the most hotly debated technological fields.

Despite the disparity of both its applications and the teams working on its development, there is a growing interest in the possible applications that could derive from its convergence. Artificial intelligence is a motor or the brain, capable of analyzing and making decisions from databases. Obviously, each of these two technologies involves its own complexities, but both are at a time when they can begin to benefit each other.

By the different ways in which these two technologies allow to work and act on the data, it is logical that they are beginning to evaluate the advantages that their convergence to take a giant step in the use of the data. Integrating automatic learning algorithms & artificial intelligence with blockchain technology presents a tremendous opportunity to refine the underlying architectural framework of blockchain. This partnership could also propel the potential of artificial intelligence, paving the way for more advanced & sophisticated technologies. Furthermore, this collaboration has the potential to produce a more coherent AI system through the incorporation of blockchain’s decentralized and immutable nature. As such, these two modern technologies possess the potential to revolutionize industries & create new possibilities for business drivers.

On the other hand, artificial intelligence would allow increasing the efficiency of blockchain processes far beyond what any conventional person or computer would be capable of. Proof of this is the processing capacity – and therefore the number of equipment – that is currently needed even to execute the most basic blockchain tasks.

Application of Blockchain and AI

Intelligent Processing Capacity

The management of a chain of blocks and encrypted data requires a large processing capacity. Bitcoin mining algorithms, for example, apply “brute force” procedures that systematically list all possible candidates for a given solution and verify that each candidate meets the problem statement before verifying a transaction.

Artificial intelligence would offer the opportunity to start executing these types of tasks in a much more efficient and intelligent way. An algorithm based on machine learning could be perfecting your skills in real-time, if you are provided with the right data to train.

Creation of Diverse Databases

While Artificial Intelligence apps create centralized networks, blockchain technology creates decentralized networks accessible from anywhere in the world.

 The blockchain technology is the registration mechanism that makes the existence of cryptocurrencies possible. At present, blockchain networks are being applied in various sectors to increase their decentralization. For example, SinguarlityNET focuses specifically on using blockchain technology to increase the distribution of data and algorithms, helping to ensure the future development of artificial intelligence and the creation of decentralized artificial intelligence.

By combining blockchain and AI, SingularityNET creates a more intelligent and decentralized AI. The use of blockchain networks allows for the handling of a wide range of data sets.

 Creating one or more APIs in a chain of blocks would allow different artificial intelligence algorithms to be communicated. In this way, it would be possible to develop different algorithms from different data sets.

Data Protection

The development of artificial intelligence depends entirely on the availability of data – our data. Through the data, artificial intelligence receives information about the world and what happens in it. Basically, the data feed artificial intelligence and allows it to continue to improve.

On the other hand, blockchain is, ultimately, a technology that allows the storage of encrypted data in a distributed record book. It allows the creation of completely secure databases that can be accessed by any person who has the proper authorization. The use of blockchain technology with artificial intelligence can enable us to create a perfect storage system for backup copies of highly sensitive and valuable personal information.

The information contained in the medical and financial records of any individual is too valuable to be given to a single company and its algorithms. Storing this data in a chain of blocks that allows its consultation by artificial intelligence, but only when it has been authorized to do so after overcoming the appropriate procedures, could allow us to enjoy the great advantages offered by personalized recommendations while ensuring that our information is stored completely securely.

Data Monetization

Another disruptive innovation that the combination of the two technologies would make possible is the monetization of data. Companies like Facebook and Google have turned data into important sources of income.

Currently, there are others who decide how our data is sold to obtain a benefit, which shows that these data are not being used for our benefit, but quite the opposite. Blockchain allows us to protect our data cryptographically and make sure that they are only used as they please us. In this way, it will also allow us to monetize this data in our own benefit when we so decide, without putting our personal information at risk. This is important in order to combat biases in the algorithms and create diverse databases in the future.

The same can be said for the artificial intelligence programs that need our data. For an artificial intelligence algorithm to be able to learn and develop, artificial intelligence networks must buy the data directly from their creators, through data exchange platforms. This will create much more equitable processes than current ones, preventing technological giants from exploiting their users.

As data exchange platforms proliferate, smaller businesses can now leverage the power of artificial intelligence (AI) technology. Companies that can’t afford the development cost of their own AI algorithms are benefiting from such platforms that enable access to boundless databases otherwise unavailable to them. With decentralized platforms, small enterprises can now compete head-on with larger corporations by having equal access to resources. A Blockchain app development company can provide small businesses with an efficient AI solution that is scalable, cost-effective, and secure.

Confidence in the decisions of the AI

As algorithms become more intelligent through learning, data scientists will have more difficulty understanding how these programs have reached certain conclusions and decisions. This difficulty will be derived from the huge amounts of data and variables that the AI algorithms will be able to process. However, it will still be necessary to audit the conclusions reached by the AI to ensure that they continue to reflect reality.

The use of blockchain technology allows creating immutable records of all data, variables, and processes used by artificial intelligence algorithms in the decision-making processes. This greatly facilitates the audit of the processes as a whole.

With the proper programming of blockchain, you can have visibility of all the steps, from the introduction of data to the conclusions as well as the total guarantee that the data has not been manipulated.

In this way, you can rely fully on the conclusions reached by artificial intelligence programs. It is a necessary step since neither people nor companies are going to start using artificial intelligence applications if they do not understand how they work and what information they base their decisions on.

Is it Coming Today?

The combination of blockchain technology and artificial intelligence is still a field in which there is a lot of ground to explore. Even though the convergence between the two technologies has managed to attract a reasonable level of attention from the academic world, projects dedicated to this technological combination are still scarce.

The union of these two technologies will allow using the data in ways that now seem impossible. The data are the key ingredients for the development and improvement of artificial intelligence algorithms and blockchain technology allows them to be stored in a totally secure way and to audit all the intermediate steps of artificial intelligence in their decision-making processes. Also, thanks to Blockchain, people will be able to start monetizing the data they generate.

Artificial intelligence has tremendous potential for disruption, but its design must be undertaken with total caution. Blockchain can help it. Nobody knows with absolute certainty how the interaction between these two technologies will evolve. What is clear is that it is a combination with great potential that is evolving at a great speed.

Also Read:

Top Blockchain Development Companies in Seattle

Top 10 Blockchain Developers in USA

Application of BlockChain Technology Beyond Bitcoin

Blockchain Technology is here to Stay; Scope and Application

Blockchain; One of the Top Tech Trends for 2020

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