Decentralisation and AI, a stable and trustworthy Partnership?

In a world where trust is becoming increasingly scarce, it's no surprise that people are searching for new ways to secure their assets and transactions. And that’s where blockchain technology comes in.

You may have heard of blockchain because it’s the base layer for cryptocurrencies like Bitcoin, but the technology has the potential to do so much more.

At its core, blockchain is a decentralised, digital ledger that allows for secure and transparent transactions. But what makes it so special?

Well, in the institutionalised world that we have been living in since Bretton Woods, traditional institutional systems like banks and governments rely on a centralised authority or single arbiter to maintain and verify transactions. This means that there's always the potential for fraud and corruption, and more importantly, that there is a single point of failure.

With blockchain, there is no central authority. Transactions are verified and maintained by a network of computers, or nodes. And there is no company, no corporate structure, no board, no CEO. Most importantly, there is no single point of failure. This is what makes blockchain so secure.

But decentralisation isn't just about security; it's also about trust. In a decentralised system, there's no need to rely on a single institution to ensure the integrity of transactions. Instead, trust is built into the system itself, through a network of computers or nodes that work together to verify and maintain the blockchain.

Decentralisation also means that there's no need for a middleman in transactions. For example, when you use a traditional bank, NBFI or payment gateway to transfer money, one or more actors take a cut of the transaction as a fee. Whereas with blockchain, transactions can be made directly between parties, without the need for a middleman.

So, I pose the following rhetorical question. If crypto exchange FTX was all above board with a single focus on providing a safe, trustworthy and reliable exchange, it would have been set up as a decentralised exchange with smart contracts to execute the customers’ chosen exchange of crypto and other digital assets, no?

But blockchain isn’t just about money. Blockchain has the potential to revolutionise all kinds of industries, from music royalties to art, gaming, supply chain management and voting systems, etc. The possibilities are endless.

Now, in a post-open.ai world, it’s time to talk about the role of Artificial Intelligence (AI) in blockchain technology.

AI has the potential to enhance the trust in blockchain technology by providing new ways to secure and validate transactions, for example, by using AI-based smart contracts. Additionally, AI can also be used to improve scalability and efficiency of blockchain networks.

On the other hand, if not implemented properly, AI can also decrease trust in blockchain technology by introducing new vulnerabilities and potential attacks that could disrupt the network.

As you’ve no doubt picked up over the many years that I’ve been writing, I am a blockchain and crypto fan that believes decentralisation in blockchain technology is the key to a trustworthy future.

But its interplay with AI is a matter that’s not quite clear at present. Sure, the combination of blockchain and AI can provide new ways to secure and validate transactions, improve scalability and efficiency of blockchain networks. However, it's important to note that the implementation of AI in blockchain technology should be done with caution to avoid any potential vulnerabilities that could decrease trust in the network.

Overall, AI has the potential to enhance blockchain technology and provide new opportunities for innovation and growth. This could be done safely provided an epoch-appropriate level of ethics and regulation is wired in.

Bring it!

Mike

Michael GanonJanuary 14, 2023NextLevelCorporate Advisorycorporate advice, mergers and acquisitions, M&A, takeovers, money, business, finance, economics, monetary policy, ceos, #CFO, #ceo, #mining, #construction, #bitcoin, #btc, #blockchain, #ethereum, #solana, #gold, #silver, #economy, #finance, #business