AI and Blockchain: Complimenting Technologies

Humans tend to want to compartmentalize things. This is something that watchers of technology have learned to ignore.

The old saying is "what business is a technology company in? Anyone it wants".

This stems from the fact that technology, as a whole, affects most everything. It is counter to our common way of thinking which frames things in categories, with competition at the core. Hence, we look at things in a non-complimentary way.

At least this is the case until we train ourselves to overcome it.

Here is where we find the most powerful of technological advancements: convergence. This is nothing more than seemingly unrelated technologies brought together as one. My go to example is the smartphone which merged mobile, compute, and the Internet into one device.

We are going to see that with blockchain and AI. Actually, because of the former, we can add cryptocurrency to the list.

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AI and Blockchain: Databases On Steroids

The idea that AI is somehow competing or separate from blockchain is a curious one.

AI is certainly affected data in a multitude of ways. This applies to the use case, creations, and application. What this means is databases are taken on even greater importance. They are also being supercharged.

When it comes to blockchain, this is, at its core, a database. We are looking at nothing different from every other server. While we are dealing with a structure that differs from the client-server model, it is still the recording of data.

After all, what does a private key in a wallet do? It allows the holder of that to write to the blockchain. Absent that, there is no access.

If AI is having an impact on databases all over the world, taking data to an entirely new dimension, it would stand to reason that blockchain would also be impacted.

This really becomes evident when we consider the rise of AI agents.

Blockchain: Providing Trust

When it comes to our systems, trust is always key. This is especially true when it comes to matters relating to finance (or money). We went to great lengths to establish a system where there were entities that operated as trust agents.

Unfortunately, due to the actions over the last few centuries, those agents, i.e. banks, have lost that trust. Fortunately for them, there are really no alternatives. At least that was the case until cryptocurrency and digital wallets showed up.

Blockchain is a mechanism designed to provide trust in a manner that does not require a third party. It is something that was regularly discussed over the years. Blockchain provides trust in a trustless environment.

Code is king.

A large part of trust comes from the ability to verify. Here is where we get into the nitty-gritty of systems.

This is where we see the potential combination of blockchain and AI, most notably AI agents.

AI Assistants

The future is one of AI assistants.

For the moment, we are unsure of how this will look exactly. Some of the ideas that are likely is an agent handling online bookings. If you need an airline ticket or a hotel reservation, the agent will handle it. Eventually, we could see it doing the grocery ordering based upon what is depleted from the refrigerator.

If we go further out, we can perhaps envision a time when our edge devices provide compute to those around us, as the users want to immerse themselves into a virtual world.

All of this requires verification. This means the ledgers have to be trusted when interacting with other parties. While this can be controlled via smart contracts, the challenge is getting different institutions to agree.

Our present system is one of intermediaries.

Visa operates as an intermediary between buyer and seller. This company enables financial purchases to occur. When payments are made, we are usually dealing with different banks, which settle through another intermediary who is tasked with those operations.

What happens when we start removing them from the equation? How is AI going to operate since it requires none of them?

Also, since many of this institutions are not going to just disappear but instead adapt, how are they going to relate?

All of this ties back to blockchain. At some point, it is going to have to be part of the enterprise stack that companies build. While their tendency is to want to keep things to themselves, so they control the ledger, this is not going viable going forward.

The verification of ledgers is going to be crucial. AI is going to reflect the speed of compute. That means the old, 3 day settlement system isn't going to work. We also can see how the AI agent requires verification which, ultimately, means access to the ledgers.

Present financial institutions are not about to open that up to external companies.

The solution is blockchain.

Naturally, there are still layers that are required, such as privacy. Nevertheless, this is being worked on so as to enable the integration into the present system.

Over time, we are going to see the tokenization of everything. This means that blockchain will be at the heart of it all.

AI is not going to be separate from blockchain. It is going to be interwoven fully.

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