The yin and yang of AI and blockchain

September 20, 2016

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Artificial intelligence is the yin and blockchains are the yang of digital business.

Artificial intelligence is the yin and blockchains are the yang of digital business. While AI helps us assess, understand, recognize and decide, blockchains can help us verify, execute and record. While the machine learning methods that are a part of AI help us find opportunity and improve decision making, smart contracts and blockchains can automate verification of the transactional parts of the process.

AI and blockchains in that sense are complementary and synergistic. They are two ends of a continuum chock full of powerful emerging tech included in PwC’s Essential Eight. AI, for its part, can add intelligence and insight to the decision making process. Blockchain, in its role, adds integrity, assurance and decentralization to the core transactional environment and can help enormously in process improvement.


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Here are just a few thoughts on how the two compare and contrast.

The yin

The challenge of AI is to get machines do our educated guesswork for us, at a scale and level of precision we couldn’t manage as humans on our own. Machines “learn” by processing special data designed and gathered to train them. It’s a probabilistic group of methods, with those machines continually heading in the direction of what they see as the most likely reality.

And that reality changes constantly. By processing more and more of that data, machines continually tune their model of reality, guessing at what they’re “seeing,” “hearing” or “interpreting”. An intelligent assistant such as Alexa in Amazon Echo, the new Apple Siri, or Sony’s Xperia Agent takes the model it has for human conversation and the nature of your voice, listens to what you tell it, guesses at how to interpret it, and then guesses again with the answer it gives you. Is it the answer you want? Maybe not, but Alexa learns after guessing wrong; it adjusts and improves. Maybe it will guess better next time.

The yang

Blockchains, by contrast with AI, are more about validation, permanence and greater degrees of certainty and control.  In a proof of stake scenario, users prove their power of ownership via a stake they hold in the cryptocurrency. In a proof of work scenario, miners compete in a mining power contest to solve a puzzle.

Solving a puzzle block by block, a chain of transactions gets encrypted and immutably preserved. While intelligence is the scout leading the opportunity discovery and sizing up the risks, blockchains bring up the rear once it’s time execute the plan. In that sense, smart contracts and blockchains must be deterministic overall. They cannot themselves be probabilistic.

Blockchains would be the Joe Fridays, the pragmatists on the team: just the facts, ma’am. Let’s wrap this up quickly so I can write my report about what really happened here. Blockchains validate all identities and transactions, automate the validation and generate the audit trail that goes back as far as the chain does.

AI and blockchains both use algorithms. Whereas AI’s algorithms are central to its perceptual and cognitive goals, blockchains are merely a means of permanently validating and recording transaction truth. The data in a blockchain becomes the canonical reference for who did what when, why, and for how much. That reference can then be globally shared in a tamperproof way.

How the two can work together

AI would be the creative one on the team, the abstract thinker and observer who studies the fuzzy complexities of the business environment, the unruly customer data, the tidal wave of social media, the complexity that needs to be abstracted, and the imagery and voice input that needs quick assessment. It provides the educated guesswork to make sense of a complicated business environment and suggest a path forward.

A blockchain by contrast would play the role of the truth teller, guarantor and mediator, the one bringing two parties together to forge and document an agreement immutably. That immutability (whether blockchain based or otherwise) can imply much greater potential for establishing trust between parties expeditiously at machine scale, particularly important when it comes to scaling the internet of things. By doing so, they fill a trust gap. Filling that trust gap makes it possible for machines to act on our behalf outside enterprise boundaries.

To learn more about how the two technologies might work together in practice, see Blockchain’s role in an internet of everything and From the internet of things to the collaboration of things.

 

Subhhankar Sinha contributed to this post.

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