How AI, with blockchain, can transform everyday life: Opinion

Artificial intelligence and blockchain technology can be considered two of the greatest innovation drivers of the last decade, already having influenced various sectors such as finance, supply chain management and more. Thus, it stands to reason that combining the two technologies can unlock even further possibilities.

While the use of artificial intelligence in the crypto industry is still relatively new, it is showing promising potential for further growth, as the blockchain AI market is projected to reach a valuation of US$980 million by 2030.

Let us explore the possible AI applications in blockchain and how they can bolster the crypto industry and its adoption in mainstream finance.

Enhanced cybersecurity and fraud detection

One area where applying AI can benefit people is the security of blockchain transactions, creating more resilient payment systems. Firstly, AI algorithms can be used to analyze transaction patterns and data, allowing for the detection and prevention of fraudulent transactions on the blockchain before they occur.

Secondly, AI can employ machine learning algorithms to enhance the privacy aspect of transactions. Artificial intelligence can analyze large amounts of data and identify patterns that may indicate an attempt at data theft or unauthorized access to a user’s account. This makes it easier for businesses to deploy proactive security measures, as they can set up automatic alerts for suspicious activity and protect sensitive data in real time.

There are already examples of projects that implemented such AI utility. The crypto-tracking platform Scorechain deployed artificial intelligence to improve its anti-money laundering transaction monitoring software and implement better fraud prediction measures. Another recent example is CipherTrace, a blockchain security branch project of Mastercard, that adopted AI on its platform to harness on-chain data and assess the riskiness of various crypto merchants based on their activities.

In short, by incorporating AI algorithms into blockchain technology, organizations can create a more reliable and trustworthy ecosystem for conducting their operations. 

Data analysis and management efficiency

Artificial intelligence can help companies gather and analyze vast amounts of data. A major part of running any business is access to relevant information and its accuracy. In this regard, blockchain is a very efficient instrument, as it affords swift access to new information that is completely transparent and immutable. 

The application of AI can then further add to this advantage by enhancing the process of data analysis. AI-powered algorithms can process large amounts of data from blockchain networks in real time, identify patterns that human analysts might miss, and generate insights to support business operations. All of which is accomplished at great speed, as a lot of time-consuming manual processes get automated, further improving operational efficiency.

Furthermore, the usage of artificial intelligence can also streamline such aspects of running a business as supply chain management and financial transactions. AI can automate financial processes on the blockchain, such as invoicing and payment processing, eliminating the need for intermediaries and improving efficiency. It can also help track products on the blockchain and ensure authenticity and transparency, as all members of the network can see the same records.

Back in 2020, IBM launched a blockchain-based platform for tracking food manufacturing and supply chain logistics, and it onboarded many European manufacturers, distributors and retailers, all of whom shared tracking and accounting information. This is a good example of how such technology can be applied to enhance business practices, reduce operational costs, improve efficiency, and ensure the quality of goods and services important for everyday life.

Bolstering DeFi 

The intersection of AI and blockchain can also be utilized to bolster decentralized finance and Web3, allowing for improved creation of decentralized marketplaces. 

Many of blockchain’s advantages revolve around the usage of smart contracts that help with automating processes and eliminate the need for intermediaries. However, creating smart contracts can be complex and time-consuming. AI algorithms like ChatGPT employ natural language processing that can simplify this process by allowing developers to write smart contracts using plain language. This can help reduce the possibility of errors, improve coding efficiency, and lower barriers to entry for new developers, making it easier to create decentralized applications.

Beyond that, AI can also be used to optimize user experience in Web3 marketplaces. By tracking user search patterns, artificial intelligence can provide personalized recommendations, matching buyers and sellers. AI-powered chatbots and virtual assistants can improve customer service and facilitate transactions, while blockchain technology can ensure the authenticity of goods.

We can also once again raise the subject of AI’s ability to analyze large amounts of data, which would allow it to identify trends, predict demand and supply patterns, and enable better decision-making for users and operators of Web3 marketplaces.

We are already seeing examples of AI integration in this manner, with one of the newest examples being the French luxury goods giant Kering. Earlier this year, the company introduced a new marketplace that combines both artificial intelligence and crypto elements. Not only does the platform offer services of an AI-powered chatbot that assists shoppers with browsing through its selection, but customers can also connect their crypto wallets and buy items using Ethereum cryptocurrency. 

Synergies of crypto with AI 

While AI implementation in the crypto industry is still in its early stages, we can see that there is no shortage of promising ways in which this union can be realized. In DeFi and Web3 alone, artificial intelligence holds the potential to vastly improve aspects of the market, making it more appealing to new users.

Beyond that, if traditional organizations are added into the equation, the union of AI and blockchain has the potential to vastly enhance business practices, improving efficiency, user experience and decision-making. In the coming months and years, we will no doubt see further development of the bond between these two technologies, and I look forward to seeing what will come of it.

MiCA Regulation – A Catalyst for B2B Crypto Integration and Adoption

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With the recent crackdown of the Securities and Exchange Commission (SEC) on such big-time crypto industry players like Binance, Coinbase and Ripple, the global crypto community is once again focusing its attention on the need for official crypto regulation.

By now, cryptocurrencies have gained considerable popularity both as an investment asset and a method of conducting payments.

The technology behind them is being adopted by many traditional players, from tech and business giants like Microsoft, Amazon and Shopify, to banks and major financial companies like JPMorgan and Goldman Sachs.

However, the absence of a proper regulatory framework remains a factor that interferes with crypto’s broader adoption.

Regulators all around the world are taking steps toward resolving the existing legal ambiguities, but it is a work in progress.

One of the most significant milestones achieved in recent times in this regard is the ratification of the MiCA (Markets in Crypto-Assets regulation) framework that aims to clear up the rules for crypto-related activities across the European Union.

This article will examine what MiCA is all about and how it can affect the global acceptance of digital currencies in the coming years.

European Union supports crypto innovation and transparency

First of all, let’s take a closer look at what MiCA actually is and what it entails.

It is a regulatory framework proposed by the European Commission (EC) to regulate crypto-assets and related activities within the European Union (EU).

The original proposal was put forth by the EC all the way back in 2020 as part of a larger initiative to develop the digital finance sector and foster technological advancement in the EU.

MiCA’s intended purpose is to introduce a comprehensive set of rules for regulating crypto-assets, bringing much-needed clarity and certainty for individuals and businesses operating in the crypto space.

The framework sets out to protect investors in this market by increasing transparency and putting in place a harmonized set of rules across all EU member states.

This will create a level playing field for crypto assets, their issuers and providers of crypto-related services.

MiCA was fully adopted by the European Parliament in May 2023 and is expected to fully come into effect somewhere in the latter half of 2024.

It has become the first fully ratified crypto regulation framework in the world, which sets an excellent example for other jurisdictions to follow in the future.

What effect will MiCA have on the B2B sector

The lack of regulatory clarity in regard to cryptocurrencies has been a major block to their adoption among traditional players for a long while now.

Due to the considerable uncertainty about how this industry should be governed, businesses and institutional investors often find it daunting to join this market.

They do not wish to risk being punished by regulators over breaking one ambiguous rule or another.

By establishing uniform regulation across the whole of the EU, MiCA reduces market fragmentation, enabling B2B (business-to-business) players to navigate the regulatory landscape and engage in crypto-related activities with greater ease.

Having a streamlined regulatory environment can promote a sense of certainty and trust, fostering confidence in businesses that are interested in working with crypto-assets.

It can encourage them to explore and embrace cryptocurrencies as a means of performing transactions or raising capital thus setting up a perfect stage for widespread adoption.

Not only that but MiCA also introduces requirements for issuers of crypto-assets to obtain licenses from proper authorities.

Having such authorization processes in place ensures that only compliant and reputable projects enter the market. This acts as a safety blanket, protecting investors and users from fraudulent or unreliable actors.

By instilling a greater sense of credibility in the crypto ecosystem, MiCA enhances investor protection and mitigates risks associated with engaging with crypto-assets.

And this, in turn, can lead to increased confidence among businesses that are considering integration of crypto into their operations.

Bottom line MiCA sets the foundation for mass adoption

To sum up, MiCA regulation has all it needs to be a massive catalyst for increased crypto adoption.

It provides legal clarity across the EU member states, enhances investor protection and promotes greater trust in the crypto industry as a whole.

All these factors contribute to creating an environment where businesses can confidently explore the potential benefits of integrating cryptocurrencies into their operations while minimizing risks associated with regulatory uncertainty or fraudulent actors.

I believe that in the future especially after MiCA entirely comes into force we can expect it to trigger a new wave of crypto adoption among the European B2B players.

And hopefully, the EU’s example will inspire regulators in other industries to follow in MiCA’s footsteps, further improving the crypto regulatory climate on a global scale.

Eugen Kuzin is a CMO at the crypto payment ecosystem CoinsPaid. He is an accomplished entrepreneur and marketing expert with deep roots in the technology market. Having studied business administration at the International Business School in Budapest, Eugen went on to apply his skills in full-cycle company management. At CoinsPaid, he is responsible for devising CoinsPaid’s marketing strategies, developing its brand and promoting its solutions for broader usage in the e-commerce market.


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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

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