The fusion of Artificial Intelligence (AI) with the decentralized world of blockchain protocols and cryptocurrency is giving rise to new innovative solutions that are redefining the future of our technological landscape. As both domains continue evolving, we’re starting to see clear synergies between the two and real world applications begin emerging.
In this article, we’ll explore 9 of these use cases in different realms and disciplines.
1. Smart Contract Optimization
Smart contracts form the backbone of a decentralized economy. They ensure we can seamlessly operate across borders without the input of a centralized authority. However, a smart contract is only as good as its developer.
AI could play a significant role in optimizing smart contracts while increasing their reliability and security. This will be pivotal if we ever want to see web3 technology infused in our real world infrastructure such as the financial or political systems. But how can AI help here?
Machine learning algorithms can analyze huge amounts of data across thousands of smart contracts to detect potential vulnerabilities, inefficiencies, and bottlenecks in the code. This could serve as a vital aid for developers in creating more secure, robust, and efficient contracts for decentralized applications.
2. Decentralized Finance (DeFi) Predictions
With the rise of DeFi platforms, traders and financial institutions have an increasing need for accurate price predictions and risk assessment tools. The more prominent DeFi becomes in our global financial system, the more important it becomes to understand the market.
AI-driven models can analyze historical data, market sentiment, and other relevant parameters to provide more accurate predictions for traders and liquidity providers. While this application may seem like a way for people to manipulate markets and make a quick buck, it’s more about creating efficient economies. Without fast and accurate data, liquidity providers will have a hard time operating. Without liquidity we don’t have a market and users are left with poorly functioning applications.
3. Blockchain Can Bypass the Risks of AI
The rise of AI is not only positive. We’ve seen an astronomical increase in AI deep fake photos and videos. Many of us don’t worry too much about this since they mainly tend to portray celebrities or public figures. However, the risks this technology poses are far greater than what we might see on the surface. Imagine a world where an AI generated video, indistinguishable from a “real” video, is presented as evidence as part of a court case. What then? Or if political candidates appear in deep fake videos committing crimes. How will we know what to believe? Many refer to this as the “post-truth society”.
Blockchains and oracle networks could be used here to authenticate digital media such as photos and videos in a trustless way and provide verifiable evidence that it’s “real”. This will be vitally important in a world dominated by astronomically powerful AI tools. Decentralized protocols could serve as our haven of truth.
4. Decentralized AI Marketplaces
Imagine a marketplace where AI models and services can be bought, sold, or leased without intermediaries. AI in Web3 can facilitate such decentralized AI marketplaces, enabling creators to monetize their models and users to access high-quality AI tools on-demand.
This could lead to an exponential increase in AI efficiency and use case, impacting vital industries such as healthcare, climate tech, and agriculture. Imagine entire economies built around AI models. The net effect of such an economy would be massively beneficial to humankind and help us solve problems in under-resourced areas.
5. Automated Governance in DAOs
If you’re a web3 native, chances are you’ve at least explored Decentralized Autonomous Organizations (DAOs). You might even have joined one and tried it out. In which case, you’ll know first hand how complicated decentralized governance can be. It sounds good in theory, but in reality it’s a mess.
DAO’s can harness AI technology to improve decision-making processes and voting. AI algorithms can help streamline proposal evaluations, predict potential pitfalls, and ensure that governance decisions align with the DAO’s objectives. This could make the experience for the user much simpler while improving the primary objective of the DAO.
6. Enhanced Security Protocols
Those who have spent any length of time in the web3 ecosystem know the prevalence of scams. It’s becoming far too easy to have your funds depleted at the push of a button. Being vigilant of the applications you engage with only gets you so far. We need ways to protect users.
AI can significantly enhance the security of Web3 platforms by monitoring and detecting malicious activities in real-time. Machine learning models can identify patterns related to hacks, phishing attacks, and other threats, enabling swift action against potential breaches. Even though this borders on a centralized authority monitoring the system, which most web3 natives despise, it’s good for the end user and might be a risk worth taking.
7. Decentralized Data Monetization
On decentralized applications, unlike web2 applications, users own their data. However, that doesn’t make it any less valuable. As users start monetizing their own web3 data, they’ll want to retain their privacy. But how do you do that without sacrificing the value of the data?
AI can help by analyzing user data locally (on-device) and generating insights without revealing the underlying data itself. Users can then share these insights to platforms and advertisers in web3 and earn rewards along the way. Some web2 solutions are already offering this service, however, the problem remains that users don’t control their own data. AI and web3 solve this.
8. NFT Provenance and Authenticity
Similar to deep fake media, NFTs require authentication of originality and ownership to retain their value. With the exponential growth of NFTs in the web3 market, some of which have extraordinary valuations, it becomes crucial to validate the authenticity and legitimacy of these assets. AI could offer a solution. By scanning and comparing NFTs against public databases, we can use this technology to ensure the legitimacy of digital assets and protect the creators and buyers rights to these assets.
9. Optimized Decentralized Resource Allocation
As decentralized networks, such as the Ethereum network, continue to grow, efficiently allocating resources can become challenging. In theory, AI could help by forecasting network demands and adjusting the network’s resources accordingly. This would ensure seamless operation, reduced costs to the network (which is good for users!), and a smoother user experience overall.
Conclusion
The synergies of AI and decentralized ecosystems is undeniable. Some projects are already combining the two technologies to power society forward. Others are still just theories. Regardless of the stage of development, it’s undeniable that AI will play a massive role in the growth of web3 and vice versa. How this plays out in the long run is anyone’s guess but staying informed and educated is vital if you want to remain relevant in our technologically dominant world.
