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In our previous article ( Ethereum and Know-Your-Customer Requirements), we discussed anti-money laundering and Know-Your-Customer requirements while building Ethereum applications in the Fintech.
In this article, we learn about how to integrate Ethereum with Artificial Intelligence, Machine Learning and Internet-of-Thing technologies.
So far, in most parts of this article series, we've been talking about blockchain, Ethereum, and cryptocurrency. There are a few other areas worth mentioning as well. One is the integration of different blockchains, while another is about the intersection between blockchain and big data, Artificial Intelligence (AI), and Machine Learning (ML). The last one is to integrate Internet of Things (IoT) and smart devices with blockchain.
Internet of blockchains
Unlike the electoral college system in the United States, where the winner takes all in the state, the future of blockchain's infrastructure will be an integration and coexistence of all major blockchain platforms. No matter how dominating Ethereum could become, it is not going to be the only platform running all DApps. New platforms, such as EOS or IOTA, will come up and fit into the space Bitcoin or Ethereum may have left. An integration of different blockchain technologies and a network of many independent blockchains are emerging trends in the Blockchain ecosystem.
Previously we discussed Plasma, an organic multi-chain hierarchy and cross-chain integration concept from Ethereum. We briefly mentioned the Cosmos network too. Cosmos is intended to provide the network infrastructure of blockchains. It has its own consensus layer based on Tendermint Core, as well as a Byzantine Fault-Tolerant (BFT) blockchain consensus engine that's also leveraged by BigchainDB 2.0. Polkadot is another one in this space. It provides a composability framework to enable intercommunication between different blockchain platforms.
Artificial Intelligence (AI) and Machine Learning (ML), together with big data technologies, are another set of disruptive technologies that have a profound influence on business and technology advances in the world. Artificial intelligence has been around for many decades, but thanks to Google's AlphaGo, AI/ML has returned to the forefront of technological innovation and disruption. Businesses are rushing to leverage techniques from AI, ML, and data science to make sense of the myriad of data they have gathered over the years, and get business insights and drive informed business decisions.
Intersections between blockchain and AI/ML are often discussed. There are three ways this intersection may go. The most common one is to leverage blockchain, big data, AI, and ML together to address complex business issues. This approach takes advantage of each technology appropriately to solve any particular problem. However, as a whole, they are able to solve large fundamental issues in the business. For example, some large enterprises may use blockchain to streamline the cross-border payment process, and at the same time use big data, AI, and ML to find out about their customers and define intelligent and concierge customer engagement platforms.
The second one is to leverage AI/ML to solve problems with blockchain and cryptocurrency. There are lots of applications that have been developed in the blockchain community to leverage AI and ML to analyze data and transactions on the blockchains, usually via off-chain processes. AI/ML is an evolving technique that brings real-time trading insights to the trade table. In the same way, it applies to crypto trading on blockchain transactions too.
The last one is real-time on-chain analytic AI/ML capabilities. Some claim these to be the true benefits of bringing AI/ML capability to the blockchain, though they have yet to be seen. One that should be watched is SingularityNET, which provides an AI service marketplace and a decentralized AI network for blockchain. Another one in this space is DeepBrain Chain, which is more focused on a decentralized artificial intelligence computing network and platform for a variety of artificial intelligence products. Both intend to bring AI/ML capability to the blockchain and smart contracts.
Speaking of smart things, this means that all the smart IoT devices are interconnected with each other and integrated with the IoT platform. They become new neurons of the enterprise in the digital world. They generate a large amount of real-time data through all kinds of sensors and communicate with each other through edge devices or IoT platforms to act or react to events they have seen, felt, or sensed. With the combination of big data, AI, and ML, it has become as sophisticated as an autonomous device. For example, a driverless car has the ability to sense its surroundings and take action accordingly. It can leverage AI/ML to make sense of the information at hand and make autonomous decisions.
There have been some attempts to connect IoT devices to the Ethereum blockchain, but blockchain may not be the right platform for collecting, processing, and transacting on such a large volume of real-time, low-level sensor data.
IOTA is an emerging and promising platform that's been designed as the transaction settlement and data transfer layer for IoT. It is envisioned to be the public and permissionless backbone protocol for IoT that enables true interoperability between all smart devices. It doesn't use blockchain technology; the sensor data is recorded as the distributed ledger using a Distributed Ledger Technology(DLT) called Tangle. Instead of blocks in the blockchain, Tangle uses a Directed Acyclic Graph (DAG) data structure to record all valid transactions. Each connected device in the IOTA network serves as a node and is active in the consensus and validation of transactions. By protocol, each node has to validate the two previous transactions on the network before making its own transaction. The current transaction, as well as the pointers to the previous two transactions, will piece together a directed acyclic graph.
IOTA is still in its early stages of development, but it is worth watching. At the same time, some Layer 2 solutions on the Ethereum blockchain may be a good choice for smart devices and IoT. To get there, Ethereum will need to address its pressing scalability issues with the Casper implementation and be able to scale up to the transaction volume like Visa and MasterCard did.
Ethereum is making inroads into the enterprise space too. Microsoft was a pioneer among large technology firms in offering Ethereum-based Blockchain as a Service (BaaS) on its Azure cloud platform, which was announced as early as Nov 2015. Late last year, during the re-Invent event in November 2018, Amazon Web Services (AWS) unveiled a new service that allows its clients to build Ethereum-based blockchain applications on the cloud. Using the AWS blockchain template for Ethereum, you can choose to run smart contracts on a private Ethereum network within AWS, or join the public Ethereum network. Earlier this year, it was rumored that JP Morgan is rolling out the first US bank-backed cryptocurrency, a digital US dollar, to transform its payments business. The blockchain technology they are using is called Quorum, the private version of Ethereum. Additionally, the Quorum network is partnering with Microsoft to integrate cloud-computing services. The social media giant Facebook unveiled its plans for a cryptocurrency called Libra, and its Calibra digital wallet on June 18, 2019. Libra will let you buy things or send money to people with nearly zero fees. With a 2.7 billion user base worldwide, Facebook has become a potential game-changer regarding the outlook for many existing crypto industry players. Similar to Facebook's Libra, the retail giant Walmart has also applied for a digital coin patent.
The "Walmart Coin", like Libra, will be a stablecoin. With over 265 million customers visiting Walmart's stores, across 27 countries, Walmart Coin will provide financing for all of them. These stablecoins are decentralized. The service will be available to anyone who connects to the blockchain, with low fees and costs. As such, we think the momentum in the enterprise space will continue.
This is an exciting time for Ethereum, as blockchain is still at the primordial stage of technology evolution we haven't seen for decades. The future of Ethereum is largely dependent on its ability to pull together and resolve the pressing scalability issues it currently has with its 2.0 roadmap. With a portfolio of scaling solutions, from state channel, Plasma, sharding, eWASM, to PoS, we see Ethereum on the way to becoming the backbone of the new internet infrastructure, and it may not be the only one. Blockchain and Ethereum are here to stay, and all that means is that there's a myriad of opportunities out there, now and in the future.
This article is written in collaboration with Brian Wu who is a leading author of “Learn Ethereum: Build your own decentralized applications with Ethereum and smart contracts” book. He has written 7 books on blockchain development.
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