Blockchain builds trust and privacy with AI

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Once thought of as separate trends in technology, artificial intelligence and blockchain are rapidly converging. These various subsectors include everything from decentralized energy and decentralized physical infrastructure networks to model fine-tuning and computing infrastructure.

Some skeptics may balk at startups touting the use of artificial intelligence and blockchain, two of the biggest buzzwords in business today, believing that they are simply trying to advertise the hype of both. After all, if some companies are already interested in AI washing, why don’t they go a step further and add blockchain to the mix?

In reality, the intersection of AI and blockchain is not a marketing hype. As I wrote in HashKey Capital’s H1 2024 report, AI and blockchain are uniquely complementary, enabling solutions that are much greater than the sum of their parts.

Blockchain addresses privacy concerns of artificial intelligence

Imagine how much data you enter into ChatGPT and other similar tools on a daily basis. Now multiply that by all the daily active users along with LLM developers using terabytes of data for model training. In short, the world entrusts a staggering amount of data to artificial intelligence.

Therefore, GenAI represents a major attack vector for data breaches. For example, hackers can blackmail businesses by publishing their employees’ GenAI logs, just as they threaten to leak private data in ransomware attacks. These logs are particularly sensitive given the breadth and depth of questions, content, data, and confidential information we enter into our prompts.

Fortunately, one of blockchain’s core tenets is privacy: Thanks to decentralized governance, users are freed from the public scrutiny that often accompanies centralized systems, where they are subject to scrutiny by intermediaries and other large actors.

For this purpose, blockchain has developed various technologies that can increase privacy, such as ZKML, OPML and TEEML. While each presents its own trade-offs, implementing them will go a long way in improving both data privacy and model privacy. By strengthening security around artificial intelligence, blockchain not only reduces the threat of data breaches, but also strengthens the all-important sense of trust in users.

Blockchain makes artificial intelligence sustainable

The rise of GenAI also requires huge amounts of computing power, straining the world’s energy. These demands will grow exponentially as more people and businesses adopt AI, its use cases become more diverse, and it itself becomes more powerful, such as in the development of multi-modal capabilities.

These demands present companies with an ethical dilemma: While businesses naturally want the improved productivity and efficiency that AI brings, they may rethink their use at the expense of harming the environment. This mindset isn’t just the right thing to do, it’s also good business: 77% of consumers prefer to patronize environmentally and socially responsible companies.

Blockchain can meet genAI’s enormous energy demands through decentralized energy, which aims to intelligently generate and distribute energy locally in a more sustainable and efficient way than centralized grids. With blockchain, companies no longer have to choose between efficiency and environmental responsibility. They can imagine a world improved by new innovations and moving towards that future in a sustainable way.

Blockchain could unlock artificial intelligence

One criticism of AI is that its greatest benefits will be concentrated in the hands of “a few.” The minority that will benefit most from AI are model developers such as OpenAI and Anthropic, and the big tech giants such as Meta, Amazon, Google and Apple, who have the most data.

These critics argue that AI will enrich these players at everyone else’s expense. Developers will benefit directly from their models, even if they are trained on datasets containing publicly available data. Tech giants will be able to create the most profitable use cases around AI because they have the most data on consumers.

This future is not ideal: AI should not be like gold or oil, from which only privileged elites benefit the most. Fortunately, blockchain can offer a solution here too. Because blockchain is a public ledger, organizations can use it to more easily share information, including data and even models that are at the heart of AI.

Some companies have taken advantage of this trend towards information sharing powered by blockchain. One such company is Carv, a modular data layer that enables gaming and AI companies to better own, control and monetize their data. Blockchain-powered solutions like Carv will create inclusivity, spreading the benefits of AI to individuals and organizations that would otherwise be left out of this revolution.

The world’s biggest problems

Blockchain was once criticized as a solution in search of a problem. With the rise of artificial intelligence, blockchain will no longer be a niche technology on the fringes of society. As blockchain addresses some of the challenges of AI (i.e. security risks, energy demands, and potential injustice), companies forward-thinking enough to use both will enjoy competitive advantages in the market, and the world will benefit.

Businesses will be able to tackle the world’s biggest problems while ensuring data and model confidentiality. Despite the computational requirements of this work, they could increase sustainability through decentralized energy use. Finally, and most importantly of all, sharing information via blockchain can bring the technology to more people and ultimately ensure a more equitable distribution of the transformative power of AI. And this is an imperative that we all must take seriously to unlock the full potential of artificial intelligence.

Jeffrey Hu

Jeffrey Hu is head of investment research at HashKey Capital, where he tracks the trends and data moving the industry forward. He also regularly contributes to the Bitcoin Optech newsletter to make major Bitcoin developments more accessible to the Chinese-speaking community.