Can AI Make Smart Contracts Even Smarter?
With the advent of the new age of technology, the data from various silos has grown in complexity, and their management has become cumbersome and time-consuming. For the proper administration of the data, teams of data scientists must aggregate data from multiple sources and reconcile any inconsistency in the said data. From such ‘purified versions of the data, we then attain a clean repository of ‘information.’ This is easier said than done, especially with the ever-increasing compliance requirement and regulatory overlook.
In contemporary times the most efficient and effective method of streamlining such data management is via a smart contract. But the potential of smart contracts in managing complex data can be boosted exponentially when combined with Artificial Intelligence (AI) and Machine Learning (ML).
Platforms like AIWORK use blockchain to enable a marketplace that helps create, verify and validate AI data sets that make AI more intelligent. But how do both these technologies work together?
Before we understand that, let us learn what a blockchain is, how AI works and what the future has in store for both these technologies.
Blockchain: The Basics
In simple words, a blockchain is a system that records information and makes it either difficult or impossible to change, hack or cheat such information. It is a digital ledger that keeps a record of transactions. These records of transactions are duplicated and distributed with many computers in a network. A block in the blockchain will contain several transactions. Every time a new transaction is added, the same is recorded to every ledger on the numerous computers. This distributed data is managed via Distributed Ledger Technology (DLT).
A smart contract is a program on the blockchain which will only run when some predetermined conditions are met. Once these predetermined conditions are met, the contract will automatically execute. Due to such automation, all participants can ensure the authenticity of the outcome and eliminate any intermediary’s participation.
Smart contract technology is spreading everywhere and includes the popular Ethereum platform. The platform allows smart contracts to be executed on network nodes. As a bonus, in this network, the smart contract can deal with the financial aspects using the Ether Coins. But Ethereum is not the sole player in this field. There are various up-and-coming smart contract platforms in the market.
AI: The Basics
Artificial Intelligence is commonly defined as “a branch of computer science dealing with the simulation of intelligent behavior in computers and the capability of a machine to imitate intelligent human behavior.”
AI can be very simple or very complex. In its range of complexity, it can go from rule-based systems where it is designed to make decisions based on rules and inputs. It can also go up to more adaptive systems such as neural networks, Natural Language Processing, knowledge graphs, and Expert Systems.
Smart Contracts and AI
Experts believe that AI is the next logical evolutionary step for smart contracts.
Currently, Smart Contracts work on the decision based on the inputs and rules. AI can further the effectiveness of smart contracts by making them more adaptive. Such adaptive systems will include logic, neural graphs, and neural networks. AI can generate and execute smart contracts based on powering vital analysis, i.e., AI will be making the predictions whether or not the contract will be executed.
Consider the following example. Mr. A enters into a smart contract with an Insurance company. As per the contract terms, Mr. A must pay a premium at the end of the month. AI can read into the bank accounts of Mr. A and also predict the income sources in the coming future. If AI concludes that Mr. A will not be able to discharge his obligation, then it will notify the insurance company. The firm can then be ready with its legal team to tackle the situation. Thus, saving them money and time.
In essence, AI and smart contracts can be used in two manners:
- In the negotiation of the agreement terms on behalf of the party
- Regulating the self-executing nature of smart contracts
AI and smart contracts are fast revolutionizing many sectors heavily reliant on human labor, such as translation services (but more later).
The Future Of Smart Contracts
Modern AI technology can perform complex tasks previously thought possible only for humans and in much less time. Distributed ledger technology (DLT) provides distributed consensus over a shared ledger in untrustworthy networks, which may contain, for example, unreachable or maliciously behaving nodes. Although the most well-known applications of DLT today are in the field of cryptocurrencies, other applications have emerged across multiple industries beyond finance, such as insurance and healthcare. There is a growing landscape of use cases where AI and distributed ledger technology applications overlap.
One of the main reasons AI and DLT work well together is because the two significantly improve data management. We have succeeded in converging DLT underpinnings to exchange data and computing resources to make AI applications more efficient and effective than traditional data management technologies.
Converging DLT with AI allows data providers to share their data while keeping it confidential and maintaining the right to manage data access. This enables businesses to safely and efficiently train algorithms on the data to derive insights.
This combo works for sectors beyond finance. Take translation services, for instance. Enterprises like AIWORK leverage the best of AI and smart contracts to make translation and transcription better, more accurate, and less cost-effective.
AIWORK is an advanced AI enterprise that facilitates an open, distributed, and crowd-sourced community for transcription and translation. The team’s mission is to advance the field of AI machine translation and transcription through a trusted network of human professionals — to unlock the potential of artificial intelligence for the translation industry and beyond.
About AIWORK
AIWORK is a decentralized and open-source blockchain protocol and ecosystem. The protocol is built on a network of AI computing resources and a community of human experts, which generate normalized and enhanced data for video content. Human experts can help create, verify and validate AI datasets, helping improve AI efficiency.
