The following is a guest post from Kadan Stadelmann, CTO of Komodo Blockchain.
From AI models on Bitcoin to AI training data on a layer 2 blockchain, coins related to AI crypto projects are all the rage in the altcoin space.
This reflects broader market conditions. Nvidia (NVDA.O) stock has been making headlines since last year and putting AI on the investment map.
This stock became the seventh largest U.S. public company valued at more than $1 trillion. In March 2024, it became the third most valuable company in the world after Microsoft and Apple in terms of market capitalization. eclipse 2 trillion dollars. Investors aspire to be exposed to machine learning technology at a pace that rivals the world's largest companies.
At the time of writing, AI tokens have a market value of $26.4 billion. Last April, that figure was just $2.7 billion.
The CoinDesk Indices Computing Index includes AI-related tokens and is up over 165% over the past 12 months. And trading volumes reached a record high of $3.8 billion in late February.
Although many investors are looking for price gains, AI-linked crypto tokens offer a crypto opportunity that is at the same time uncorrelated to crypto. The value of these tokens is arguably more tied to the fate of the AI sector than that of crypto.
Investment manager VanEck predicts AI crypto revenue could reach $10.2 billion by 2030 at the low end with use cases similar to non-AI crypto projects: reward tokens, infrastructure physical calculation, data verification, provenance, etc.
Certainly, the blockchain AI revolution is still in its infancy. It is unclear how the merger of these two exciting industries will play out. Bitcoin maximalists, for example, believe the entire crypto index could reach zero.
There is a long list of possible uses for AI tokens. Payments, business models, machine-generated non-fungible tokens, and blockchain-based marketplaces for AI applications, to name a few.
Theoretically, blockchain improves protocol security with a decentralized and immutable settlement layer.
AI detects risks in real-time and provides an additional layer of security monitoring of network activities, analyzing historical and provenance data and asset conditions, uncovering anomalies, using predictive analytics to making smart contract terms more efficient and analyzing provenance data, asset conditions and market trends.
Imagine a system where these two new technologies extract and verify data while managing network loads.
Blockchain could be a public record of AI training.
AI algorithms improve threat detection and response; The immutability of data linked to blockchain security provides a strong defense against cyber threats, combined with a decentralized approach to data management.
Once AI-verified information is recorded on the blockchain, it cannot be changed or deleted.
Nevertheless, the merger of AI and blockchain poses a threat.
The risks of AI and blockchain
The United Nations General Assembly adopted a global resolution on artificial intelligence (AI) on March 21 promoting the development of “safe, secure and trustworthy” AI.
The European Parliament adopted an AI law on March 13 aimed at setting governance standards for the Union.
Furthermore, the European Commission launched an investigation in the use of AI.
The Biden administration's October 2023 executive order highlights safety and security concerns related to AI development.
Meanwhile, India introduces AI requirements in March before the national elections.
AI and blockchain, alone or in combination, pose privacy and security risks. Large amounts of sensitive data could one day depend on the security of AI-blockchain applications, and it remains unclear how these could be secured.
AI requires large amounts of data to learn, predict and act. Data could become increasingly personal over time, posing an increased privacy risk. Blockchain can counteract these risks by anonymizing data transactions to protect identity with methods including zero-knowledge proofs and also creating an immutable and often public record.
Data stored on a public blockchain cannot be deleted by anyone, which conflicts with privacy standards and laws such as the right to be forgotten.
The theoretical potential for AI to act on blockchain-secured data without human oversight raises important questions about consent and privacy.
Foster beneficial innovation
In its quest to harness blockchain and AI without dystopia, the world must be guided by ethical principles and security standards so that these technologies ultimately serve the best interests of humanity and meet our most pressing needs .
A collaborative approach between developers, ethicists, and policymakers is needed to clearly delineate the boundaries of AI behavior and data integrity on blockchain networks. Developers must design innovative solutions to protect privacy and security in the new digital frontier.
The principles of transparency, accountability and inclusiveness ensure that AI and blockchain systems are designed with an understanding of their societal impacts.
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