How artificial intelligence can enhance blockchain platforms

Artificial intelligence and blockchain are both touted as technologies that will lead our future. But here’s the problem: They’re like oil and water. While innovative in their own right, there’s a noticeable lack of interconnectedness — projects that tightly combine AI and blockchain, unleashing the full potential of both emerging technologies.

Technical hurdles have been largely to blame for this. Integrating AI into the smart contracts that exist today is practically impossible. The two often rely on entirely different programming paradigms — and while smart contracts use data sparingly to reduce transaction fees, many AI models process vast amounts of data as well as a large amount of computing resources to make decisions.

Smart contracts are also incredibly strict, meaning that an outcome can only be achieved when a range of strict parameters are met. As a result, they can be ill-suited to the world of AI, where 100% accuracy is hard to achieve, especially when it comes to image and audio recognition. This demand for flexibility has created the need for a new generation of smart contracts, able to handle highly accurate (albeit imperfect) input and receive a perfect output.

As the EU Blockchain Forum noted in a recent report, combining these two technologies isn’t just desirable… it is a necessity. The authors wrote: “In the real world, especially in large-scale use cases, blockchain, AI and IoT are likely to work in concert. In a smart city, blockchain could be combined with IoT and AI on an infrastructure level to manage critical systems that cities depend upon, as well as improve quality of life for residents through safer and better designed urban environments.”

But what exactly would bringing blockchain and artificial intelligence together mean in practice? What are the tangible applications that end users would have to look forward to?

Projects involved in the space argue that decentralized apps have an opportunity to become far more advanced than they are now. Trading strategies could be informed by AI — and smart contracts could become infinitely more flexible. Blockchain platforms have the chance to offer a more convenient alternative to private keys — which can often be cumbersome to remember and store securely — with users gaining access to balances through facial recognition.

Together, AI and blockchain can also be leveraged in many other fields such as big data and IoT, insurance, manufacturing, healthcare, logistics, and many more. In all cases, AI plays an important role in processing data or automating human tasks to feed information into blockchain.

Experts have argued that AI can be just as effective as people are at many tasks — and better still, they can operate 24/7 without suffering from fatigue or becoming susceptible to human error.