Blockchain protocols can’t (and shouldn’t) ignore AI’s potential, but it’s important to implement it with caution and care.
Across industries, it seems all anyone is talking about is artificial intelligence. Even companies that aren’t tech-forward are scrambling to discover how AI works and what it could do for them. Given the impact AI is predicted to make, it’s hardly surprising that blockchain protocols — part of an industry that is decidedly tech-forward — are exploring what role(s) AI could play for them.
From data analysis to improving scalability to fostering interoperability, AI could prove to be a powerful tool in the arsenal of blockchain protocols. Still, it’s essential to carefully review not only all the potential benefits, but also the possible complications. Below, 12 members of Cointelegraph Innovation Circle discuss some of the things blockchain protocols should consider as they begin exploring AI.
The preservation of data privacy and security
Since AI relies on vast amounts of data for training and decision making, protocols must prioritize robust encryption, anonymization techniques and secure data handling practices. Additionally, implementing privacy-enhancing technologies like federated learning or differential privacy can mitigate the risk of sensitive information being exposed. – RJ Phillips, Zoop
The team behind an AI product
Carefully consider the team behind each product. While many AI builders promise huge results, you should always make sure to research their historical performance to determine whether their projected outcomes are actually realistic. Overall, protocols should look for companies with a consistent track record of delivering quality products on schedule and within budget. – Wolfgang Rückerl, ENT Technologies AG
Maintaining and/or enhancing decentralization
Protocols should prioritize the design of AI solutions that maintain or enhance decentralization, possibly through the use of distributed AI models or decentralized decision-making algorithms. Furthermore, protocols should consider the potential risks linked to AI, such as bias and security vulnerabilities. – Tammy Paola, Zerocap
The ethical use of AI
Ethical frameworks and guidelines should be implemented to address problems with bias, fairness and responsible data use. The user experience of protocols should also be smooth and straightforward so that AI-enabled blockchain solutions are easy to use and understand. Protocols can produce technically solid, ethically sound and user-centric solutions. – Myrtle Anne Ramos, Block Tides
Balancing privacy and power
Dance with the two titans! As you usher AI into the blockchain realm, remember it’s a dance between privacy and power. AI craves data, but blockchain champions privacy. Striking the right balance is key: Leverage AI’s might without compromising the sanctity of blockchain’s privacy. It’s a delicate dance, but when done right, it can transform the blockchain ballet! – Erki Koldits, OÜ Popspot
Whether you can offer a real value-add
A lot of the so-called “AI tokens” right now are just trading on hype — riding the marketing wave. But once the market realizes that, it will just dump those protocols. Never try to market your protocol as something it’s not. If you can’t provide a real AI value-add, but are just copying some code from ChatGPT or other sources, don’t do it. – Zain Jaffer, Zain Ventures
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How (or if) AI contributes to your mission and vision
AI can easily be a game changer for many tech companies and protocols. The key to success is to make sure that your AI angle, initiative or element contributes to your original mission and vision. If it helps you enhance it or reach it earlier, it is clearly a potential strategic pillar of your roadmap. If not, leave it entirely out, and don’t get distracted! – German Ramirez, THE RELEVANCE HOUSE AG
By design, AI is not fixed. It can give two different answers to the same input at two different times, depending on its experience. A blockchain protocol’s role is to be verifiably time-consistent. There is a fundamental tension; incorporating AI could break the value of a blockchain protocol. Using AI to learn how to write new smart contracts is a different story — if it doesn’t touch the protocol. – Stephanie So, Geeq
The increased need for pen testing
As the abilities of large language models expand, it will be ever more crucial to perform periodic (eventually perpetual) penetration tests. Additionally, there will need to be multiple, comprehensive code audits completed by reputable providers prior to a launch. – Timothy Enneking, Digital Capital Management
Projects being rushed to market
When a topic captures the popular imagination, companies will fast-track solutions to meet the growing demand. However, this can also lead to a dilution in overall services, as underdeveloped products hit the market with the sole aim of capitalizing on the craze. To protect participants, crypto leaders should vet all projects for competency and effectiveness before granting network access. – Oleksandr Lutskevych, CEX.IO
The variety of use cases
Protocols can unlock an exciting new set of use cases with AI. For example, DeFi and trading protocols could quickly identify arbitrage opportunities using AI. Governance protocols could predict voting outcomes or identify anomalies in transaction behavior. Data protocols could tag AI data and make AI output transparent, decentralized and censorship-resistant. The opportunities are endless. – Shiv Madan, Moonwalk
The fact that AI is not going away
Blockchain protocols should prepare for AI to become a permanent fixture rather than a short-term craze. Therefore, protocols must treat AI with the enormity it deserves. Companies should choose and implement AI solutions carefully to avoid embarrassing performance and scalability issues later. – Sheraz Ahmed, STORM Partners
This article was published through Cointelegraph Innovation Circle, a vetted organization of senior executives and experts in the blockchain technology industry who are building the future through the power of connections, collaboration and thought leadership. Opinions expressed do not necessarily reflect those of Cointelegraph.