Artificial Intelligence Meets Blockchain and Decentralized Data

Blockchain technology can become an effective foundation for decentralized artificial intelligence systems, characterized by transparency and fairness – ensuring access for everyone not only to the technology, but also to the rewards it offers.

Blockchain technology has immense potential to democratize access to artificial intelligence by addressing concerns related to the centralization that has emerged with the increasing dominance of companies like OpenAI, Google, and Anthropic.

Decentralized artificial intelligence systems built on blockchain can help democratize access to essential artificial intelligence resources such as computational power, data, and large language models. These systems are also essential; with the increasing power of artificial intelligence models, their thirst for data and computational power increases, raising the barrier to entry into the industry.

Using blockchain technology, artificial intelligence resources can be distributed through open decentralized networks accessible to anyone, ensuring equal opportunities for small operators while promoting the spirit of openness and collaboration necessary to drive the industry forward. Blockchain can create a more fair system that ensures those creating the data used to train LLM are rewarded fairly for their contributions.

Challenges in Decentralized Data

There is much to like about the possibility of a decentralized artificial intelligence ecosystem, but the reality will not materialize until some key challenges related to accessing and managing data in blockchain are overcome.

For artificial intelligence, blockchain technology can be a crucial tool for securely and transparently managing data that is accessible to anyone. However, blockchains suffer from structural problems: they are fundamentally slow single-table databases that sequentially record information – not flexible or fast enough to handle the massive amounts of data required by artificial intelligence systems.

Another challenge is that blockchains do not easily integrate with other data environments or other blockchains. For this reason, most institutions using blockchain technology need to deploy a range of ad-hoc solutions to extract data from the ledger, convert it to a relational format, bring it into a traditional database, and transfer it to a data warehouse for analysis. At the same time, to bring external data into any blockchain, complex and risky data oracles are necessary. All these tools introduce centralization and security risks into the equation.

Innovative Solutions Paving the Way

Fortunately, several innovative solutions are being proposed to help facilitate integration between blockchain and artificial intelligence. One such example is Space and Time, which has created a decentralized data repository replacing traditional data sets and acting as an untrusted intermediary between blockchain and enterprise data systems, enabling them to communicate smoothly.

Space and Time’s secret sauce is the proof-of-SQL consensus mechanism, which cryptographically verifies the accuracy of SQL database queries and proves the integrity of the core data set. This allows smart contracts to interact with external data, paving the way for more advanced blockchain applications using artificial intelligence. For example, Space and Time can enable AI chatbots like ChatGPT to access blockchain data without any modifications.

OG, formerly known for standard artificial intelligence blockchain, recently rebranded as the Decentralized AI Operating System called dAIOS. The system uses blockchain to coordinate decentralized artificial intelligence resources including storage, data availability, and computational power, allowing artificial intelligence applications to work securely and transparently on the chain while ensuring users retain control of their fed data.

OG’s dAIOS system consists of three main components – storage for managing large amounts of data, data availability for validating data, and service for running data retrieval, training, and inference – which can be used by any developer to access the resources necessary to run their artificial intelligence models.

In addressing the challenge of accessing blockchain data, SQD is a developer of advanced data indexing tool that works by aggregating data on the chain into parquet files and distributing them across the contracts in a decentralized data lake. SQD addresses the architectural flaws in blockchain, namely the way data is serialized in blocks, a structure that makes querying inefficient.

When an application needs to access blockchain data, it sends a query to the contract hosting the required data. Each node is assigned a specific part of blockchain data, and SQD provides a detailed index of that information so decentralized applications can quickly find what they need. Typically, the same blockchain data is assigned to multiple contracts to ensure availability, using an algorithm to manage query sizes.

What AI Will Do for Blockchain?

Modern blockchain infrastructure paves the way for a number of new artificial intelligence/blockchain applications. One promising area is security. Artificial intelligence can enhance blockchain security by monitoring transactions and network activity to detect anomalies in real-time and mitigate any suspicious activity.

Artificial intelligence can also enhance smart contract capabilities and make them smarter. Using analytics, artificial intelligence algorithms can predict any issues when executing contract terms. Natural language processing algorithms supported by artificial intelligence can enable smart contracts to understand legal contracts. Generative artificial intelligence technology can be used to automate the creation of smart contracts, eliminating the need to learn a specialized programming language like Solidity.

It is also expected that the tokenized real-world assets industry will benefit from the influx of artificial intelligence, used to analyze the source and status of RWAs such as stocks and fine arts. By linking analysis to market trends, artificial intelligence can more accurately calculate the fair market value of tokens. It can also be used to monitor data fees in real-time to continuously update their values. In addition, it can be used to automate the process of converting RWAs into digital tokens.

Lastly, artificial intelligence can be used to predict future price movements of digital assets by monitoring market trends and industry news. Traders will be able to use analysis to enhance decision-making, hedge their investment portfolios, and attempt to profit from market volatility.

AI for All

The artificial intelligence industry is growing at an unprecedented pace, and decentralization has become more important to ensure the industry remains open and competitive. Blockchain technology will provide the foundation for advanced decentralized artificial intelligence models, leading to the creation of artificial intelligence tools that meet the needs of the majority, focusing on simplicity, privacy, and ease of use.

Dr. Jay White, founder and head of research at SxT, and the inventor of Proof-of-SQL, said: “Space and Time is delighted to lead Web3 into a new era of data-driven smart contracts and the next generation of DeFi protocol.”

With the accelerating convergence of artificial intelligence and blockchain, these two technologies will democratize access to artificial intelligence resources, fairly rewarding data contributors, and enabling any company to securely use its proprietary data. It’s no wonder that industry experts like Miguel Palencia, co-founder of Qtum, express confidence in the potential.

Palencia told Forbes: “Granting real ownership and the source of artificial intelligence assets is critically important.” “There is an urgent need to address the concentration of AI power in the hands of a few companies.”