What Happens When Blockchain and AI Collide?

Why Artificial Intelligence Needs to breath on Blockchain ? | by Salman Saleem | Medium

Blockchain technology is one of the driving forces in the world of innovation. It has revolutionized various industries, including Healthcare, Supply chain, Mobile app, Retail, Real Estate, and Finance by adding a layer of security and transparency into their processes. And on the way, it has become one of the most loved technologies by Entrepreneurs.

Artificial Intelligence has also made a similar impression on the business world. The technology, in the form of Chatbot, has revamped the traditional businesses and upgraded the customer experience. It has established itself as a core part of every business – be it finance, travel, retail, healthcare, real estate, or mobile apps.

Both Blockchain and AI have set the foundation of a new business era in one way or the other. But have you ever wondered what will happen when the two technologies will converge? Will their coexistence fit into the industry world? Will they improve the economy or make it worse?

Before we dig deeper into how the fusion of two technologies will appear and how it will change the face of businesses, let’s have a quick glance at what importance does Blockchain and AI holds in the present market.

AI and Blockchain – A Brief Introduction

Artificial Intelligence is the technology that makes machines smart enough to mimic human intelligence and perform tasks on their own. The technology, with its impressive features, has brought a paradigm shift in the business world – making everyone understand why investing in Artificial Intelligence is the need of the hour.

The technology is expected to continue making a major impact on the business market as shown by the following statistics:-

  1. The global market for Artificial Intelligence will be of worth $190 billion by 2025.
  2. By 2019, 40% of digital transformations will be done via AI.
  3. AI-enabled voice assistants will hit more than 4 billion devices across the globe by this year.
  4. Companies relying on AI data will take $1.2 trillion a year from non-insight driven firms by the year 2020.

Blockchain, in layman language, is a distributed ledger that stores all the transactions in nodes in a transparent and secure manner. The technology, with its exciting characteristics, has disrupted the business world in numerous ways and made everyone interested in going through this digestible guide to Blockchain app development.

Blockchain has also demonstrated a wider future scope as depicted from the statistics:-

  1. According to IDC, $11.7B will be spent on Blockchain by the year 2022, with a compounding annual growth of 73.2%.
  2. 69% of banks across the globe are experimenting, and around 90% of North American Banks and European banks are investing in Blockchain development solutions to make their processes seamless, secure and transparents.
  3. Banks and Finance firms are predicted to save around $8-12 B annually by embracing Blockchain powered decentralized finance solutions.

While we have covered the basics of AI and Blockchain, let us bring Big Data in the mix too, to gain a better understanding of the relationship of the two disruptive technologies.

So, here we go.

The Trifecta Factor: AI, Big Data and Blockchain

Bangalore Artificial Intelligence, Big Data, Blockchain, IoT (Bangalore, India) | Meetup

Big Data prepares the ground for the advancement of both AI and Blockchain. It empowers businesses and blockchain app developers to accumulate a heap of data into structured components.

This data is further employed by AI-powered machines and applications to understand the user behavior and deliver personalized customer experience. Whereas, Blockchain relies on Big Data to get the analyzed data that can be stored in its distributed ledger and made accessible to people, depending on if it is on a public or private network.

With this, we have taken a quick recap of the basics of the disruptive technologies, let’s jump directly to how they complement each other – beginning with impact of AI on Blockchain industry.

How AI Can Change Blockchain System?

Though Blockchain has proven to be the finest technology in the marketplace to invest in, it also has some limitations. The answer to how to combine AI and blockchain will lead Artificial Intelligence in the scenario to emerge out as the right solution to make Blockchain a perfect evolution in the following ways:-

1. Better data management

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Currently, Blockchain relies on hashing algorithms for data mining. These algorithms work with a ‘brute force’ approach where the algorithm strives to find every possible combination of characters until the one that goes with the verification process is found. This complicates the whole process and demands higher efforts.

This feature of artificial intelligence can give an escape from this approach by providing a more intelligent approach which makes the data management process seamless.

2. Improved energy consumption

energy conservation clipart - Clip Art Library

By improving the data mining system, Artificial Intelligence for Blockchain can help with streamlining the whole process. This will eventually help in cutting down the number of efforts and time invested in mining the data in the Blockchain sphere.

3. More scalability

4 Tips for Building a More Scalable Business

As the Blockchain scaling problem explained by Cointelegraph, the size of Blockchain is growing at a substantial pace of 1MB for every 10 minutes – with existing data being somewhere around 85vMB. But, there’s no effective method currently in practice to deal with data optimization and elimination processes.

Artificial Intelligence, in this scenario, can help by introducing an advanced decentralized learning system or a new data sharing technique that makes the system more efficient and open new ways for Entrepreneurs to look into Blockchain for startups and Enterprises.

4. Enhanced efficiency

7 Ways To Leverage Analytics For Enhanced Efficiency And Profitability - Talentedge

The speed and effectiveness of performing a P2P transaction in a Blockchain system costs around $600 million a year. And one of the reasons behind is that each node executes the same task on its own copy of data so as to be the first one to come up with a solution.

AI can improve this situation by providing an intelligent system that looks into which node is going to deliver the solution at the earliest and informing other nodes to shut down their efforts. This will eventually cut down the cost involved as well as upgrade the efficiency of the whole system.

5. Higher security

Higher security ranking for 4D web sites – 4D Blog

Though Blockchain is known for its unbeatable security characteristics, the applications designed using the technology are not so secure. This is another sphere where AI can prove to be a requisite addition.

Artificial Intelligence can integrate natural language processing, image recognition, and multi-dimensional real-time data transformation capabilities into Blockchain peer-to-peer linking. This avails data miners with an option to turn a large-scale system into several micro-economic environments and optimize data transactions in a secure and effective manner. Above all, it adds flexibility to the process with the help of Machine learning intelligence.

6. New data gates

In the coming years, all the data will be stored on a Blockchain and the organizations will tend to directly buy them from the data holders. In a scenario like this, AI will help with providing an intelligent method of tracking data usage, granting access, and other such tasks. They will act as data gates from where the whole Blockchain data flow will be maintained.

Now, while these are some of the ways Artificial Intelligence can improve the Blockchain system, let’s head towards how blockchain can change AI world.

How Blockchain can Transform the AI World?

The technology behind Bitcoins and other cryptocurrencies will also bring major changes into the Artificial Intelligence ecosystem in the following ways:-

1. Better transactions

Cashless economy: Better digital security will make India a world leader - The Financial Express

Blockchain, with the help of Smart contracts and Consensus models, ensure that all the app data, customer details and that of financial transactions are immutable, publicly accessible and recorded in real-time. This guarantees data authenticity and accuracy, and eradicate the need for involving intermediaries, which eventually results in faster, secure and fair transactions.

2. High-Quality data

How We Maintain Data Quality While Handling Large Scale Extraction - PromptCloud

By providing real-time patient data access, AI is transforming healthcare and various other business verticals. But, one challenge the AI-enabled apps and software are facing is that they have limited access to data. They often could not access data that is governed by some other entity. Besides, they find hard to look into data authentication. An outcome of which is low-quality data is considered many times to predict the results.

Blockchain, in this situation, provides a heap of data which is not owned by a single entity, is immutable and accessible to all. It also empowers the implementation of certain rules, data and analytics into compliance in a sequential and secure manner with the help of Smart contracts. This, as a whole, helps to gain high-quality data in real-time without compromising on data privacy and security compliances.

3. Decentralized intelligence

WTF is Decentralized Artificial Intelligence? | by Ben Stewart | The Startup | Medium

As we covered in the last point, the existing AI-powered business models faces various issues due to centralization of data. This makes it difficult for an AI system to render the most accurate decisions.

Blockchain, in this context, can enable frictionless access to information that is shared and authenticated by all the stakeholders involved in the network. Besides, the consensus algorithm can ensure that the data written in the blockchain are not limited to any particular scenario and do not lose their credibility. Once it is proved, the AI system can go for a comprehensive study of the data, its behavior, study pattern, and much more to unveil the information never noticed before. These insights can further be used by deep learning algorithms to derive factually accurate decisions and make better predictions for the end customers.

4. Lower market entry barriers

Overcome 9 of the most common market entry barriers with these strategies - Trade Ready

Apps and software designed using Artificial Intelligence suffer from various market barriers due to lack of authentication, involvement of intermediaries, risk of inaccuracy, monopoly ownership on data, etc. Convergence of AI with Blockchain technology can lower down the ownership of a single entity, eliminate intermediary, and assure that the data is secure, accurate and authenticated by the stakeholders involved. In this way, it paves a way to enter the market at the earliest and in a profitable manner.

5. Greater transparency

With Greater Powers, Greater Transparency? - The Cape Breton Spectator

Blockchain technology features will add transparency to the Artificial Intelligence system. It posts all the detailed involved in making a decision by AI machine on a blockchain, which is accessible in real-time. Whenever a decision goes wrong, the businesses can look into the blockchain to inspect what is the root cause of the failure or issues encountered and plan for a better strategy.

6. Improved artificial trust

How to Build Trust With A.I. | Inc.com

AI is bringing a major impact on businesses, but it is still facing major challenges in terms of trustability. Blockchain, in this scenario, will ensure that a publicly accessible yet immutable public registry is maintained that will contain your data and related models in the form of a cryptographic digital signature. Every user can access the information authenticated and verified by smart contracts and consensus models in real-time. This, altogether, will eliminate the need for introducing intermediaries and eventually, upgrade the trustability into the AI ecosystem.

With this, we have seen the impact of AI on Blockchain and vice-versa. So let’s look into the next main part of the article, i.e, what are the advantages of the convergence of the technologies.

Benefits of Co-evolution of the Two Technologies

Artificial Intelligence and Blockchain, when treated as a single entity, will resolve various challenges and come up with a myriad of new opportunities. Some of these possibilities are:-

1. Better decision making

Critical questions for better decision making | Training Journal

The co-evolution of AI and Blockchain technology will also improve the decision-making process. On one side, AI algorithms will help to detect the frauds and risks associated with any transaction or app, on the other side Blockchain will assist in improving the accuracy of the data used for fraud prediction by AI algorithms with its simple and secure data auditing process.

2. Secured personalized experiences

Personalized Customer Experience - Complete How to Guide! | CommBox

The AI and Blockchain convergence will also enhance the personalized experience delivered to the customers. While AI will continue to work with highly sensitive personal data, Blockchain will ensure that the data remains immutable and secure using the best cryptography encryption technique. This will prevent the circumstances when AI fails to serve customers with the right personalized experience due to data violation done by data intruders or others.

In other words, Blockchain will offer security with encryption, while AI will provide more privacy to the end users in terms of their experience on platforms like Netflix and Amazon using the Blockchain-secured data.

3. Higher trustability

What is a high trust culture and what are its benefits? | Workstars

Merging the two technologies will empower users to look into what and how their sensitive data is stored, managed, and employed without compromising on the privacy and security front. It will help them to audit every single step into the decision-making process, which will boost public trust.

4. Increased accessibility

Increased Accessibility Can Lead to Increased SEO | TechWell

Blockchain and AI together will cut down the hassle associated with payment methods. While Blockchain-based cryptocurrencies will put the currency barrier to end and foster international trading, AI will improve the operational efficiency of the process, ensure higher security, and reduce the cost associated.

5. New business models

Another benefit of dual technologies is the introduction of newer business models. The Blockchain will provide frictionless access to the information of the complete business ecosystem, with all the stakeholders contributing immutable data without worrying about the ownership of the network. This will provide an AI system with the opportunity to get deeper insights from the patterns, behaviors and other factors related to the working of a business. And thus, deliver with more factually accurate decisions, or better say, newer business models.

6. Improved smart contracts

Smart contracts still miles away from living up to their name | CIO

Smart contracts, as explained in our Smart Contract guide, are offering various perks like higher speed, minimum to zero disputes, improved data storage, etc. to the business world. But, their use is confined due to the sophistication of the program. AI, by integrating with Blockchain, will make it possible for smart contracts to encode and validate complex commercial relationships on a blockchain. Thus, improved smart contracts will come into existence. Besides, the self-executing contracts will provide different levels of quality based on the price changes managed by AI-based system.

7. Data monetization

How you can make your organization ready for data monetization

Another advancement that may be feasible by joining the two technologies is the approval of information. Monetizing gathered information is a big revenue for big organizations, like Facebook and Google. Having others choose how information is sold to make profits for organizations, shows that information is being weaponized against us.

For AI algorithms to learn and develop, AI organizations will be needed to purchase information directly from its makers, through data centers. This will make the entire technique a way more honest strategy than it is in today’s time, without tech giants misusing its users. Such data centers will additionally open AI for more small corporations. Creating and feeding AI is unrealistically expensive for organizations that don’t generate their insight.

8. Smart computing power

Smart Elevators, Self-Driving Cars Require More Computing Power at Network's Edge - WSJ

If you somehow happened to work a blockchain, with all its encrypted information on a laptop, then you’d like a massive amount of process power. The hashing algorithms used to mine Bitcoin blocks, for instance, take a “brute force” approach – which consists of efficiently systematically identifying all potential candidates for the solution and checking whether every candidate fulfills the problem’s statement before confirming a dealing. Imagine an AI based algorithm, which could practically polish its abilities in real-time if it was provided with appropriate training data.

With this now attended to, it’s time to dive deeper into the concept and determine what will be the impact of technology on your business.

Impact of AI-Blockchain Convergence on Industries

The applications of Blockchain and AI combination are almost similar in all the businesses. But, to ease the process, let’s check the impact of AI-Blockchain collaboration on all the industries individually.

1. Healthcare

The 9 Biggest Technology Trends That Will Transform Medicine And Healthcare In 2020

Both Artificial Intelligence and Blockchain technology in Healthcare industry are offering new opportunities for both patients and healthcare service providers at their independent level. But when it comes to work altogether, the healthcare organizations and patients will experience the next level of services.

Intersection of blockchain and AI in Healthcare will offer the opportunity to safeguard the medical records against cyber attacks as well as access the data in a decentralized layer and give people ownership of their data, eliminate the monopolistics power of the top tech giants like Google and Apple, and empower patients to share their data with anyone on their own terms and receive personalized responses.

2. Retail

The 5 Biggest Retail Trends In 2021

Merging AI with blockchain technologies will double the impact of AI in Retail business. It will empower the retailers to save the insights of their customers in immutable blocks and record the whole process so as to determine what factors were involved, if their marketing plan fails. Besides, it will enhance the payment process and eradicate the risk of frauds.

3. Supply chain

Top 25 Supply Chains of 2020 | IndustryWeek

Benefits of combining blockchain and AI will result into an all new world. The technologies, as a single unit, will help to optimize supply chain in a far secure and effective manner as well as offer better insights into what should go in the first place. This, in turn, will enhance the experience of everyone involved and result in higher business profits.

4. Finance

The best finance news websites: A wealth of information! | SmartBrief

Integrating Blockchain with AI will also streamline the processes in Finance sector. While Blockchain will build trust into the industry in the form of Smart Contracts, AI will cut down the dependency on humans to understand human emotions and predicting the next step to be taken, which will eventually enhance the automation and performance level.

5. Government

The government is hyping digitalised services, but not addressing a history of e-government fails

Blockchain and AI merge paths together to revamp the definition of democracy. The technologies will transfer the control over data from big group of people to the whole public, while maintaining the security and quality of data.

Besides, the AI and Blockchain technologies will aid in tracing e-voting procedures and making them accessible to all the citizens in real-time.

6. Mobile applications

How to Find the Perfect Team for Mobile Application Development | | Atimi

Basically the combination of AI and blockchain can increase the efficiency and the reaction time. For example, there is a payment to be made. Thus, blockchain will make the payment channel smooth and transparent, consequently improving the speed. Simultaneously, AI will characterize which gateway should be utilized, and how the client intends to finish the payment. This way both the technologies will accelerate the payment page, hence expanding the checkout experience.

Use Cases of the AI-Blockchain Convergence

Some of the companies that have invested in the combination of blockchain and AI projects to enhance their existing processes are:-

1. Engima

Enigma - Company Culture, Jobs and Blockchain Careers

Enigma is serving with a data marketplace that empowers secure off-chain computation. This marketplace is designed with an aim to let companies share data that users can subscribe to and obtain via smart contracts.

2. Numerai


Numerai supplies crowdsource machine learning issues to data scientists and empower them to record their results into an AI-meta model for a short/long period of time and bet on the effectiveness of their proposed output/model. Once the turn period is over, they can check whose result is nearly correct and share the earning based on the terms and conditions pre-decided.

3. SingularityNET

SingularityNET - Home

SingularityNET collaborates the use of AI in Blockchain to develop a decentralized open market for Artificial Intelligence where anyone can monetize AI. That implies anyone can buy and sell AI algorithms at a larger scale, and thus improve its capabilities. One of the popular use cases of SingularityNET is Sophia.

4. Computable labs

Computable () - All information about Computable ICO (Token Sale) - ICO Drops

Computable Labs is creating new Internet infrastructure for AI to get democratize access to data and algorithms and is striving to supply a Token Curated Registry (TCR) that act as a hub for buying/selling of data.

5. Ocean protocol

Art — Ocean Protocol

Another use case of AI-Blockchain coevolution is Ocean Protocol. It is an ecosystem for data sharing and monetization that offers a tokenized service layer with an aim to provide safe, transparent and secure access to data, especially to AI-enabled entities.

6. Synapse AI

Synapse.ai Kicks Off SYN Token TIER 2 Public Sale After Hitting $7M+ In Private Sales

Synapse is employing the AI Blockchain convergence to build a decentralized data and intelligence marketplace for trainers, researchers, processors, and contracts that can be approached in real-time programmatically.

As seen in the above Blockchain and AI use cases, the idea of integrating these technologies is attracting a vast number of entrepreneurs and venture capitalists. However, the process of combining the two technologies is not as easy as it seems. There are various challenges associated with the convergence of Artificial Intelligence and Blockchain, about which we will cover in the next section.

7. Hanson robotics

Sophia, the Humanoid Robot, and Dr. David Hanson, Robotics and AI Expert, Confirmed to Deliver ITW 2018 Keynote

World popular robot Sophia, created by Hanson Robotics, is taking machine intelligence to another level. Sophia has been wired to physically manage data and decide her reactions and responses accordingly. She utilizes various AI modules to take her activities keenly.

8. Namahe AI – supply chain

Namahe (NMH) ICO Rating, Reviews and Details | ICOholder

Aiming to acquire transparency and connect the different components of significant value chains, Namahe AI monitors the inventory and supply chain process in real time and reports glitches, delays and fakes in the framework and highlights such information so that professionals can review it. It leaves less scope for any misuse. Namahe AI will additionally send machine learning that will permit AI to predict future business and irregularities.

Challenges Associated with the Integration of Blockchain and AI

How Blockchain Trains AI

When talking about integrating Blockchain and AI technologies, various challenges come into play, such as:-

  1. Blockchain technology is decentralized and its nodes are heterogeneous in nature. Because of this, if Blockchain is public and open-sourced, it will be difficult for AI outputs to come at a single point.
  2. The two technologies are poles apart and the concept of combining the two is still new. Because of this, a huge amount of time and money is required for exploring AI and Blockchain and look into similar grounds.
  3. Another challenge related to Blockchain integration with AI is Security. Blockchain is a publicly distributed, decentralized and securely encrypted database that serves AI with unlimited and reliable information. The technology is based on cryptography algorithms which make stealing of data a daunting task. But, in order to make AI make changes into the secured data and drive better predictions, it is crucial to decrypt the files first, which results in data hacking.
  4. The ecosystem implementing the convergence of the two technologies demand a higher computing power. For example, a single search on Google search engine will take around a trillion times more time to ensure security and progressiveness. This makes it tough to maintain the speed into the process.

So, here were some of the challenges that prevent companies to leverage the benefits of blending AI and Blockchain together. While you can discuss them with our Blockchain consultants via this simple contact form, let’s head towards what are the future holds for the collaboration of the two technologies.

What Future Beholds?

If you consider Artificial Intelligence and Blockchain individually, both are proving to have a brighter future. On one side, the AI software market is expected to reach %59.8 billion by 2025, while on the other side, the global market for Blockchain is predicted to be worth $3 trillion by 2024.

But when talking about the convergence of Blockchain and AI, the concept of combining the technologies is still in its nascent phase. The collaboration of these technologies through AI development company and blockchain development companies has gained a fair share, but in the experimental phase only, which implies we still have to wait for a while to understand what opportunities the integration offers and how to embrace them.

With our global platform of AI development services in USA, Asia and other countries, we assist our customers and clients to leverage the latest technology to the utmost and provide better ROI for your business.


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<b><strong>Karan Makan</strong></b>

Karan Makan

Technology Engineer and Entrepreneur. Currently working with International Clients and helping them scale their products through different ventures. With over 8 years of experience and strong background in Internet Product Management, Growth & Business Strategy.

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