An Introductory Lesson on AI, IoT, and Blockchain

Amit has a degree in finance and is working as an analyst in a credit rating agency. His boss, asks him to research and come up with a plan on how technology such as AI, IoT, or Blockchain could be used to improve their services and provide better credit scoring to their clients.

Amit is now anxious. He has to come up with a plan in one week, and he is utterly clueless as to what the terms that his boss mentioned, actually mean.

“What am I going to do?” “There is so much technical jargon I have to learn” “I am not sure if I will be able to submit the plan on time” “What will my boss say?” These were the several thoughts that crossed Amit’s mind. Being from a non-technical background, he was unfamiliar with the various trends in technology and had to learn everything from scratch.

Source: pngkey

Well, Amit need not worry, as we will learn about AI, IoT, and Blockchain, one by one. Let’s begin with AI-first!

All about AI

Artificial intelligence or AI is a branch in computer science that focuses on the simulation of intelligent or human-like behaviour in computers.

Source: CNBC

In daily life, you must have tried to book a cab through a ride-sharing app such as Ola, Uber, or Lyft. Ever wondered how are these apps able to inform you about the nearest location of a driver, how much time it would take for your cab to arrive at your destination, or why is there an increase in pricing at certain times? The answer to all of these questions is AI.

Companies like Uber make use of machine learning techniques in various ways. Machine learning is applied to predict a taxi’s estimated time of arrival, optimal pickup location for a user, demand, and price of each ride. However, one of the most crucial features that Uber plans to roll out is getting rid of surge pricing. Surge pricing happens when the demand for trips soars in a given area, and therefore, the cost of rides increases by two or three times. Uber aims to remove the problem of surge pricing with the help of machine learning, wherein algorithms will be used to identify locations where the demand for cab rides is quite high and direct more drivers over there, as it would bring the prices of rides back to their usual rates.

Another important use of AI in our regular life is the application of spam filters. Usually, when you open your emails, there is a folder called ‘Spam’. Have you wondered how an email application identifies which mails should go into the ‘spam’ inbox? Well, AI has made this feature of email possible. The process takes place when AI is able to recognised learn from different signals such as the words or phrases in a message, the sources from where it was sent, whether the user has previously marked such emails as junk mail, and uses them to personalise results for a user.

Source: Lifewire

AI-backed technology has also been successful in identifying if a financial transaction is fraudulent in nature or not. By building systems that learn about the nature of transactions which are fraudulent in nature, AI utilizes neural networks, which are computing systems that understand how to perform various tasks by considering many examples without being programmed for it, to predict phoney transactions, which depend upon their number, size, and the parties involved.

However, of all the applications that have been discussed so far, one of the most common applications of AI that we see around us is in social media. Whenever a user uploads a photo on a social media site, let’s say Facebook or Instagram, AI can recognize the faces of people in the photograph with the help of machine learning algorithms that imitate the structure of the human brain to power the facial recognition software. Additionally, Facebook has also made use of DeepText; an AI initiative launched in 2016, which is basically a text understanding engine and is used by Facebook Messenger to filter spam messages or messages from strangers.

Source: wccftech

AI: Pros and Cons

AI has been a boon to several industries, ranging from healthcare to financial services. And why not, since it has many advantages:

1. AI is not prone to committing errors. Through the use of algorithms, the chances of errors in decision-making or executing a task are reduced, since machines are programmed to provide the best possible assistance over the course of various examples and patterns observed by them.
2. Unlike humans, AI-powered machines or devices do not get tired. They can endure harsh conditions, which is why they are capable of performing difficult tasks with greater endurance and responsibility and can be used for data mining and exploration processes.
3. When humans are at work, emotions have a significant impact on their work. However, with AI, there would neither be any emotions at play or distractions. In other words, AI helps make logically informed decisions, improving efficiency and work productivity.

Despite all its strengths, AI has several disadvantages as well:

1. High Costs- For small businesses, adopting AI may not be feasible, since there are enormous costs involved in its implementation, ranging from installation of a machine to its repair and maintenance expenses, along with software up-gradation on regular intervals.
2. Lack of Improvement with Time- Unlike humans, AI cannot improve or adapt itself to the changing environment, unless the programming of the machines is altered completely.
3. No Creativity- While thinking logically is one of the positives of AI, on the dark side, it cannot be creative. AI-backed machines are only able to perform what they have been programmed for, and therefore, cannot bring forth any new or bright ideas to the table.

Welcome to the ‘Internet of Things’

Now that we have learned about AI let’s dive into IoT or the Internet of Things.

IoT is defined as the ability of computing devices to transfer information over a network without requiring human-to-human or human-to-computer interaction. For instance, an individual wearing a heart monitor transplant or an automobile having an in-built sensor to alert drivers in case of any malfunction, are instances where IoT is applied.

Source: InformationAge

How does IoT work? The process is quite simple. IoT comprises web-enabled smart devices that use embedded systems such as processors, sensors, and communication hardware. Through these systems, data is collected and acted upon, which is then transmitted to an IoT gateway or edge device where the information is sent to a cloud to be analyzed.

Some of the applications of IoT include driverless cars, which are equipped with sensors and cloud architecture to process real-time data like road conditions which are then communicated to the controller, and wearables, which also have sensors that collect and analyze user data. The data is then sent to other technologies, which then use it for improving public safety.

World’s largest online retailer Amazon has also been using IoT in its retail stores. Known as Amazon Go, the application ensures that customers have a hassle-free shopping experience in Amazon’s brick and mortar stores by eliminating the need for cash counters. While shopping customers simply pick up a product and leave. The equivalent amount would be deducted from their Amazon Wallet.

Source: Business Insider India

Advantages and Disadvantages of IoT

Since it is widely in usage, IoT definitely has its own advantages:

1. IoT can access information from anywhere, anytime, and on any device as and when required
2. IoT has significantly improved communication between connected electronic devices
3. With the help of IoT, several mundane tasks have been or are in the process of being automated that would assist businesses in improving the quality and efficiency of their services with minimal human intervention.

Some of the cons of IoT include:

1. Since data is being shared on multiple devices at the same time, it becomes easy for hackers to infiltrate and get access to confidential information.
2. In the event of a malicious or cyber attack, all the devices that are connected to an IoT network would become affected, raising privacy concerns.
3. As a growing number of devices become connected to IoT, it would become increasingly difficult to manage large volumes of data on similar networks.

What is ‘Blockchain’?

Now that we have learned both AI and IoT, we shall finally come to ‘Blockchain’. As difficult as the term sounds, it is one of the most interesting concepts in technology today.

So what is meant by ‘Blockchain’? Blockchain is a record of transactions that are stored and linked together using cryptography, which is a system of converting data in the form of secure codes. These transactions are stored on multiple systems and are linked together in a peer-to-peer network. The computers that are connected together in a single Blockchain are referred to as ‘nodes’.

Source: JOC.com

One of the most popular applications of Blockchain is the use of decentralized cryptocurrencies. Here, coins are passed through an electronic network via a coded address to make a transaction. Each transaction is a digital block that is verified by every computer on the network. After verification, the transaction enters the system, and later, to every block.

Beyond cryptocurrencies, you can see the application of Blockchain in various areas of healthcare, where personal health records are encoded and stored through surgery receipts on Blockchain networks, which are then sent to insurance firms as proof of insurance.

Source: Health Transformer

The music industry too has been using Blockchain off late. Blockchain has been able to solve the issue of ownership rights of artists, which have often been ignored or overlooked by production houses. Through Blockchain, a decentralized database of music rights has been created to provide transparent transmission of artists royalties and real-time distribution to everyone involved with various music labels.

Pros and Cons of Blockchain

There are several pros and cons of the application of Blockchain. Let’s understand the advantages first:

1. Since data is stored on multiple devices on a distributed network, it becomes highly resistant towards malfunctions or attacks, as all networks can replicate and store a copy of the database on their system.
2. Once a piece of information has been stored on a Blockchain network, it is permanent and cannot be removed or replaced, making it easy for users to refer to it anytime they want.
3. Blockchain eliminates the need for intermediaries or third parties involved in transactions since the network of nodes helps to verify transactions through data mining, thus, reducing transaction costs.

Some of the cons of Blockchain are:

1. While in most cases, Blockchain data cannot be manipulated, if a single entity controls more than half of a distributed network, it is possible for the entity to easily delete or modify the information as per convenience.
2. Once data has been entered on a distributed network, it is a time-consuming and challenging process to change it in the case of discrepancies. As a result, one has to enter new data again.
3. Currently, hard drives and networks are at risk of losing nodes if their growth is not able to keep pace with the rise in Blockchain ledgers, which can expand exponentially over a period of time.

Conclusion

Amit now appears more confident and is sure of drafting a plan that his boss had asked him to do. We hope that you too, have understood and are willing to dive deeper into the world of AI, IoT, and Blockchain.

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