AI and Blockchain: The Nexus of Innovation

Artificial intelligence is marching towards greater autonomy and influence on our lives. One of the most important needs that has emerged for this progression is for frictionless, real-time transfers between machine agents. Blockchain technology is perfectly suited to pick up that demand.

Let’s explore what these two technologies are, how they synergize, and how their combined future will benefit users around the globe.

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Artificial intelligence is a field of study with the goal of creating programs, systems, and applications that can mimic the level of cognition of a human being. There are a number of subsets within AI. We’ll be focusing on AI agents.

What is an AI agent? It’s a system that autonomously perceives, makes decisions, and acts on those decisions. These systems can be goal-based, reactive/reflexive, utility based, or learning agents¹. A simple example is a chatbot system. A more complicated example would be bots used to purchase cloud compute or storage based on dynamic pricing models. In both cases, these agents would benefit from blockchain enablement.

The chatbot may need to verify existing information on a customer request. If that information is stored on a ledger, it can simply find that information and instantly confirm it to the customer.

In the case of the AI agent purchasing compete or storage, being built on a ledger with portability would allow them to query directly to vendors, transact, and settle, all on a visible chain not being hampered by traditional settlement methods.

Blockchain is a digital ledger that is distributed across a peer-to-peer (P2P) network. The ledger can be used to track assets, record transactions, and is usually completely decentralized. These ledgers provide visibility for all participants and allow for a trustless network.

Why do they need to work together? 

As AI agent usage and innovation spreads across industries, more and more burden will be placed on their ability to transact, optimize and adapt for their use cases. These agents will need a reliable, low-cost, and fast backbone to utilize to achieve those use cases.

Blockchains are perfectly suited to pick up this demand. They are already partnered with banks and corporations. They can lever these existing connections to act as a bridge between AI-managed accounts across borders, currencies, and regulatory environments.

These agents also need massive scalability. They will need to be able to process high volumes of transactions and do so while utilizing minimal energy. Blockchain that can fit that need.

What are the current issues?

Currently, there is no identity standardization across ledgers. This lack of standardization means there is no globally accepted way to identify and authenticate AI agents across blockchains. This is a huge source of friction because if AI agents can’t recognize each other nor be recognized by other participants due to protocol mismatches the system bogs down.

Regulations also present a problem. There is no legal framework around AI smart contract settlement nor is there a clear chain of responsibility for liability concerns. This means these agents can’t yet be empowered to transact without opening up the users to potential legal issues.

The last current drawback is the inconsistency of data standards. Blockchains stored and verify data differently so agents utilizing cross-ledger datasets can be unreliable due to the lack of commonality².

All of these issues are known across the ecosystem. There are concerted efforts to get regulations in place as well as test cases heard to begin building a body of legal decisions to cement how this system will function moving forward.

As these issues are ironed out, the AI agent ecosystem will become a vital part of how companies, people, and governments function.

Resources:

¹ https://www.ibm.com/think/topics/ai-agent-types

² https://lukka.tech/measuring-data-standards-institutional-crypto-investment/

The information provided on this page and its associated documents is intended to provide a broad overview for discussion purposes. It is subject to change and should not be taken as financial or investment advice. Teucrium Trading LLC and Teucrium Investment Advisors, LLC make no offers to sell, solicitations to buy, or recommendations for any security, nor do they offer advisory services.

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