How Machine Learning and A.I Benefit the Blockchain Industry

Artificial Intelligence and Blockchain are the two hottest disciplines in Computer Science today. The potential of these two technological innovations is limitless, individually as well as together. However, since Blockchain is a newer technology than AI, its integration with the broader spectrum of technology is still being explored. One such aspect of Blockchains that is being actively studied is how AI algorithms can help optimize them. In this article, we will explore the potential benefits that AI can bring to the Blockchain industry.

To understand why AI is needed for Blockchain development, we must understand the disadvantages of how Blockchains are implemented in their current form. They are slower than centralized databases, harder to scale, and can be very energy inefficient because of their decentralized nature. However, with just one decade of standalone development, Blockchains have already cemented themselves as a generational concept in computer science, most notably by becoming the basis of all cryptocurrencies.

As it currently stands, cryptocurrencies are a $2.4 trillion market, and one bitcoin is worth approximately $60000. Most of these coins are backed by robust next-gen software that is being actively developed by some of the best minds in the tech world to usher in the age of an entirely digitized worldwide economy. Thus, one of the central aspects of future development is building better, faster, and more efficient Blockchains.

AI makes Blockchains Efficient

Cryptocurrencies are produced by a process known as mining. Essentially, this means a mining computer has to solve some complicated math problems to come up with the correct cryptographic hash that generates a coin. This is a brute force method, and every day, millions of computers across the world are dedicated to performing this task exclusively around the clock.

What makes mining such an energy-inefficient process is that whoever comes up with the correct cryptographic hash first gets the coin. The effort of the other millions of computers is thereby wasted. The Bitcoin Blockchain demands the active participation of such miners to mine coins and keep the network secure. Miners have a secondary job of verifying transactions on the network, which also involves cryptographic hash checking.

Evidently, having millions of high-powered computers running 24/7 to solve complex problems consumes a lot of electricity. This negatively affects the environment by raising carbon emissions. Thankfully, AI can help reduce the carbon footprint of the mining industry.

By integrating machine learning into mining algorithms, developers can develop smarter and more efficient mining software. The AI in these mining tools can study the pattern of cryptographic hashes and learn how to come up with patterns that have a higher chance of matching and mining a coin. This reduces the sheer wastage of computation power of the brute force approach by a large margin. It would also minimize mining times significantly, speed up the block verification process and reduce carbon emissions simultaneously.

AI helps Blockchains manage data

Artificial Intelligence thrives on data. As a general rule of thumb, the more data you can train an AI algorithm with, the better it gets at its desired job. The decentralized nature of Blockchains ensures that you can store the data required to train AI models securely. No one can tamper with sensitive datasets to change values at their will. This will lead to the creation of unbiased and fair AI algorithms.

Using Blockchains, we can also design parallelized algorithms that can use multiple nodes on the network for much faster model training. Blockchains can also efficiently distribute and share training data across various AI algorithms, all running on different nodes connected to the same Blockchain. An Amsterdam-based start-up named SingularityAI is working on this very concept to create a collaborative marketplace for AI services.

In turn, expertly trained AI can optimize the data-storing method of Blockchains. Chains get larger as more blocks of data are added to it every minute or so. AI algorithms trained in Blockchain mechanics and data storing can help warehouse this data efficiently.

AI helps in Crypto Trading

As discussed earlier, Blockchains are the basis of most cryptocurrencies being traded today. These coins largely prop up the Blockchain industry and their value in the open market, which supports multiple projects that are being worked actively on today. As more mainstream investors turn their attention towards crypto, this market is set for growth, and the Blockchain industry will gain further prominence with it.

Algorithmic Trading is not a new concept, but when AI is added to the mix, things get a lot more interesting. As the cryptocurrency market grows and expands, AI algorithms can help traders perform accurate technical and fundamental analyses to make sound trading decisions. In fact, many traders who already use AI-powered trading software have reported higher profits and fewer losses already.

AI makes the Blockchain Industry more Secure

Crypto Exchanges regularly get attacked by hackers trying to steal money. On the other hand, exit scammers operate shady services to close up shop and leave with all invested capital as soon as possible. A 2020 report said that about $9 million in cryptocurrency is lost to scammers every day. This is indeed a huge problem, but thankfully, AI can help fix this.

AI-based cybersecurity systems can identify threats in real-time. Typically, with Blockchains, attacks are time-sensitive, and you can train an AI algorithm to be extra vigilant during moments of vulnerability. Not only that, with every new method of attack that an intelligent algorithm is trained with, it grows stronger and more efficient at keeping hackers at bay.


Some have heralded Blockchain technology as the fourth industrial revolution. It is the inevitable next step in the evolution of our digital lifestyles, with the potential to revolutionize most sectors of modern human society.

In this upcoming era, the marriage of AI and Blockchains is poised to be a long and happy one. Aside from the advantages that we just discussed, there can be many more. For instance, you can use AI algorithms to verify the data being added to Blockchains, which will help reduce errors and make information more reliable and immutable.

Thus, as Blockchain technology progresses hand-in-hand with AI, the technology of the future looks pretty promising.

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