We have witnessed the most prolific evolution of machines from manual to electric in the previous century. In 2024, we are spectators of a revolution where machines with cognitive capabilities make decisions for humans and store and secure human data that can’t be manipulated.
Indeed, we are talking about Artificial Intelligence (AI) and Blockchain, the two emerging technologies overhauling the business landscapes. Both AI and Blockchain development may become catalysts for a global industrial revolution.
Imagine if both technologies come together to change the business environment. Well, this blog explores the possibility of integrating AI into Blockchain technology. We are illustrating AI’s impact on Blockchain and its possible use cases. We will also explain how businesses can benefit from AI in Blockchain, the potential hurdles, and the way forward.
Terrific Trio of AI, Big Data, and Blockchain
Business leaders have always spoken about working smarter. In 2024, with the advancement of AI, big data, and blockchain technology solutions, it has become possible for humans to work smarter. Now, businesses have a super-smart analyst, an ever-secure and organized storage, and a tamper-proof record keeper.
In 2024, 80% of businesses have accepted that they are using AI development solutions in one or the other form. Big data will cover $230 billion of the market by 2025. Along the same line, the blockchain market will reach $163 billion by 2029. The data shows the massive adaptation of these emerging technologies by businesses to improve business efficiency, cut costs, stay above the competition, and spur innovations.
Understanding the Impact of AI on Blockchain
When AI and blockchain come together, it’s not 1 + 1 = 2; in fact, together, they become 11. AI brings intelligence to record-keeping, making it reliable, faster, and secure. The AI in blockchainwill be a billion-dollar market by 2027. So, don’t you want to know which 8 blockchain areas AI can make a real difference in? Here they are:
Smart Contracts:
AI can help blockchain members write and evaluate smart contracts quickly and accurately to save time and money.
Energy Use:
Blockchain consumes a lot of energy. AI can reduce consumption by 50% and turn it into an energy-efficient technology.
Security:
AI can detect contract anomalies and manipulation attempts and alert the network to make it more secure.
Scalability:
AI can speed up and scale the network, helping blockchain transact more contracts accurately—about 100,000 contracts per second.
Data Analysis:
Blockchain does not involve analytics. AI can help blockchain analyze data and create patterns to help make informed decisions.
Privacy:
Members can view personal data on the blockchain. However, AI can help maintain data privacy to avoid data breaches.
Governance:
AI can make blockchain more democratic and accessible to govern with established rules that respond to users more effectively.
User Experience:
Due to its complexities, not everyone has adopted blockchain. AI can make blockchain adoption easy and user-friendly.
Benefits of Co-Evolution of AI and Blockchain
The convergence of emerging technologies is inevitable as businesses explore more potent ways to improve efficiency, reduce costs, and enhance ROI. Although AI and blockchain impact businesses in different ways, their growth together will eventually prove a blessing for businesses, as it allows businesses to predict outcomes more accurately and innovate new products and services to make customers’ lives easy and comfortable.
AI helps blockchain work smarter and faster, while blockchain helps AI be transparent and reliable. Together, they help various industries innovate and perform better in a secure and transparent environment for the common benefit of consumers.
According to a recent study, 75% of big businesses will incorporate AI and blockchain into their operations. The AI market in the blockchain is set to grow at 30% every year until 2030. Moreover, by incorporating AI and blockchain, businesses will reduce the risk of data breaches by 50%.
Better Decision Making:
Accurate business insight is essential for businesses. AI can analyze voluminous blockchain data sets to understand trends and forecast future outcomes, helping businesses make sound choices and increase profitability. 61% of businesses have agreed that AI improves the speed and quality of analytics.
Improved Security:
Blockchain stores massive amounts of personal data. AI can help identify weird transaction patterns in smart contracts and other suspicious activities in financial transactions to prevent blockchain networks from manipulation and fraudulent activities. AI is capable of reducing cyber attacks by 50%, safeguarding data and networks.
Cost Savings:
AI and automation solutions help automate blockchain smart contracts, leading to significant labor cost savings. Moreover, AI streamlines and optimizes blockchain processes to reduce costs and energy. It also reduces manual errors and fixes associated with them. A survey suggests AI in blockchain can cut the costs of supply chain businesses by 30%.
Faster Transactions:
AI in blockchain brings speed and resource allocation optimization to ensure quicker blockchain contracts and transactions. Along with speed, AI brings reliability, transparency, and accuracy to blockchain smart contracts to make the entire network highly efficient. A recent study suggests AI boosts blockchain speed by 50% and enhances customer satisfaction.
Better Customer Service:
AI in blockchain can install chatbots and personal virtual assistants for businesses to help them provide around-the-clock customer services to help businesses transact speedily and accurately. It can lead to a higher customer satisfaction and retention ratio. It is evident that AI improves response time by 80% to boost customer confidence in brands by 35%.
New Product Development:
AI helps businesses innovate and reengineer products and services based on analytically drawn market trends. Blockchain technology can leverage AI to create new business opportunities with new products and services. 60% of the businesses that are using AI in blockchain accept that they have gained a competitive edge due to innovations through AI.
Enhanced Supply Chain:
AI optimizes order management and streamlines inventory management, reducing immense operational costs. Moreover, AI improves visibility while blockchain secures deliveries. Together, they bring efficiency and transparency to reduce product recall by 30% and improve customer experiences by 46%, overall bringing down transportation costs by 20%.
Improved Data Quality:
As businesses rely more on big data analytics for decision-making, the quality of data becomes vital. Scattered and inconsistent data can damage businesses more than competitors’ data. AI development services helps blockchain clean and authenticate data and improve data quality to eliminate errors and bugs by 40%. Reliable data helps businesses make more accurate decisions.
Energy Efficiency:
Resource allocation has been catastrophic for businesses, which increases wastage and costs related to it. Since blockchain consumes a lot of energy, AI can help blockchain optimize resource allocation to ensure blockchain networks become energy-efficient, reducing the need for energy by 50% and making blockchain networks more environment-friendly.
Risk Management:
Risk management has become a big business because, with the advancement of digital solutions, threats have increased many folds. AI is making significant strides because it eliminates cyber threats and mitigates potential financial and reputational losses for businesses. AI efficiently protects blockchain smart contracts and can eliminate 25% of cyberattack-related risks.
Personalized User Experiences:
Blockchain networks can provide personalized user experiences, and businesses on the blockchain can offer the same to their customers using AI. From protecting personal and sensitive customer information to making personal recommendations on decentralized applications, businesses can build a loyal customer base and improve customer satisfaction by 40%.
Streamlined Compliance:
AI in blockchain automates and improves KYC processes and authenticates customer data to adhere to government regulations in the blockchain ecosystem. Besides, AI helps prepare regular compliance reports based on increasing data to ensure that compliance does not become a hurdle on blockchain networks to ensure widespread adoption.
Challenges and Opportunities in AI-powered Blockchain
Every technology has two sides; while one side offers immense benefits and opportunities, the other side has challenges and hurdles. AI in blockchain throws a few challenges related to data privacy, regulations, and, most importantly, data security. Blockchain, however, solves the issue of intellectual property ownership; AI, since it empowers content creation, aggravates the challenge.
Moreover, a few AI algorithms are nothing less than a “Black Box,” which raises issues of democratization, transparency, and ethics. It is believed that 64% of businesses that are already using blockchain will integrate AI in their businesses to spread the challenges wide.
When over 70% of consumers raise the issue of data privacy and data breaches, it is essential to address the challenges AI in blockchain will face to ensure businesses are secure and their customers are confident about AI getting integrated into blockchain to create a transparent and secure business environment.
- AI consumes a lot of data, which may go against the basic nature of blockchain and raise issues of data privacy for customers.
- Due to speed, AI influences blockchain data severely. It is vital to understand how AI makes decisions to avoid bias.
- Integrating AI into blockchain is a complex technical process that requires expertise, which may prevent wider adoption.
- Businesses need to navigate the ever-evolving regulatory framework around AI and blockchain to manage businesses.
- With AI’s integration into the blockchain, new security threats may appear, requiring businesses to have a more robust security apparatus.
- Different AI tools and blockchain networks may not work together seamlessly. Developing standards needs technical know-how.
- Users are already reluctant to adopt AI and blockchain solutions due to their complex functioning, which requires training.
Conclusion:
Businesses always look for opportunities to reduce costs and make operations more efficient. For them, AI in blockchain is an astonishing opportunity as it brings numerous benefits that can help them innovate and edge out competition. It is, therefore, incumbent upon them to use these emerging technologies wisely so that their customers benefit first and, thereby, businesses themselves.
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