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Home»BLOCKCHAIN NEWS»How the EU is creating tech magic
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How the EU is creating tech magic

By Crypto FlexsMay 27, 20246 Mins Read
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How the EU is creating tech magic
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What happens when the secure world of blockchain meets the intelligence of AI? Find out how the EU is blending these technologies to create something magical.

Blockchain and AI are two buzzwords you’ve probably heard a lot. But what happens when these technologies join forces?

The European Union (EU) is exploring this very issue. In fact, the European Blockchain Observatory Forum (EUBOF) under the European Commission recently published a report mentioning the potential integration of blockchain technology and artificial intelligence (AI).

According to the EUBOF report prepared by the Office for Telecommunications Networks, Content and Technologies, the possibilities are enormous.

Think about it. AI data, which must be highly secure, can be stored on blockchain. This is a big problem for industries like healthcare and finance, where data security is critical.

EUBOF also points out that combining blockchain and AI can create a decentralized AI network. This means there could be a more collaborative approach to AI development, rather than a few large companies managing all the data. In other words, it levels the playing field.

Another cool thing about this tech duo is how AI can make smart contracts smarter. These contracts, which execute automatically when conditions are met, can benefit from AI capabilities to make them more efficient and reliable.

To lead this charge, EUBOF recommends that Europe become a global hub for blockchain knowledge. We also suggest greater communication with various stakeholders and addressing challenges posed by new innovations.

In addition, the EU plans to revise the regulations for the European High-Performance Computer Project (EuroHPC), which manages supercomputers across Europe. These supercomputers will support AI development and enhance their capabilities through new AI factories.

So what does this mean for us? Let’s explore.

Why AI and blockchain are a perfect match

AI and blockchain are two of the most popular topics that have investors paying attention. It’s easy to be skeptical, but there are solid reasons to be excited.

So how can AI power blockchain? One key area is scalability.

Blockchains like Bitcoin (BTC) and Ethereum (ETH) are notoriously slow. Bitcoin processes about 7 TPS (transactions) per second, and Ethereum manages about 30 TPS. Compare that to Visa, which processes 6,800 TPS.

This speed gap is a looming obstacle to blockchain adoption. Enter AI. It can help make blockchains faster and more efficient by predicting periods of congestion and optimizing transaction flows.

Imagine AI as a traffic controller, analyzing data to identify potential slowdowns and reroute transactions to keep everything running smoothly. This not only speeds up operations, but also makes the blockchain more stable and ready for larger, more complex applications.

AI can also enhance blockchain security. Try Ethereum’s sidechain solution known as Rollup. These rollups process off-chain transactions and then add them to the blockchain.

Zero-knowledge rollups use cryptographic proofs to verify transactions, keeping sensitive information private. Optimistic rollups, on the other hand, assume that transactions are valid unless challenged by proof of fraud.

Validation typically takes a long time depending on network traffic, which can create a bottleneck. However, AI can speed up the overall system and make it much more efficient by analyzing trading patterns, predicting potential problems, and optimizing the verification process.

Additionally, AI’s ability to quickly analyze massive amounts of data makes it a powerful tool for auditing blockchain applications. Instead of waiting for vulnerabilities to be exploited, AI can proactively identify and fix them.

Fraud detection is another area where AI shines. AI can monitor blockchain networks for unusual activity, flagging possible fraud in real time. As blockchain becomes more integrated into the financial system, this functionality will be invaluable. Early detection can prevent massive losses and maintain the integrity of the blockchain network.

However, integrating AI with blockchain is not without challenges. Regulations are a big obstacle. The European Union’s (EU) new Artificial Intelligence Act (AI Act) adds levels of compliance for companies using AI for the first time.

The law requires risk assessment, disclosure and cooperation with authorities and has global implications. Even companies from outside the EU must comply if they wish to operate within EU borders.

Despite these regulatory challenges, the synergies between AI and blockchain are undeniable. AI can make blockchain faster, safer, and more stable, and blockchain can provide AI with a secure and transparent data storage solution.

The EU recognizes this potential and is taking steps to lead the charge by setting the stage for technological advancement.

The future of AI and blockchain integration

The integration of AI and blockchain offers a future where these technologies not only coexist, but enhance each other’s capabilities. Let’s take a look at the potential implications of this powerful combination.

One of the most promising fields is supply chain management. Current supply chains are often complex and opaque networks where it can be difficult to trace the origin and path of goods.

Blockchain can provide a clear, tamper-proof ledger to record every step of the supply chain. Combining the analysis of vast amounts of data with unparalleled AI allows companies to optimize logistics, predict demand, and identify potential disruptions before they occur.

For example, IBM’s Food Trust blockchain, which tracks food from farm to fork, has been enhanced with AI to detect patterns and better prevent foodborne illness.

In the healthcare field, the convergence of AI and blockchain can bring new developments. AI algorithms can analyze patient data to provide personalized treatment plans, while blockchain ensures that this sensitive information is stored securely and only accessible to authorized parties.

This combination can also streamline clinical trials, where AI can help identify suitable candidates and predict outcomes, and blockchain can maintain the integrity of clinical trial data to prevent fraud and ensure transparency.

Financial services is another sector that requires change. Decentralized finance (DeFi) platforms built on blockchain can leverage AI to power trading algorithms, improve credit scoring models, and detect fraudulent activity.

AI’s predictive capabilities can provide more accurate risk assessments, while blockchain’s security features can protect user data and transactions.

According to a report by PwC, AI is expected to contribute $15.7 trillion to the global economy by 2030, with blockchain expected to add another $1.76 trillion. Together, we can create a safer, more efficient, and more innovative financial ecosystem.

the way forward

Moving forward in this era, we can imagine a world where smart cities are powered by AI and blockchain.

Traffic management systems can use AI to analyze data from a variety of sources, including cameras and sensors, to optimize traffic flow and reduce congestion. Blockchain can ensure the integrity and security of this data, preventing tampering and unauthorized access.

Likewise, energy grids can benefit from this integration, with AI predicting energy demand and blockchain facilitating peer-to-peer energy transactions between consumers.

Simply put, the future of AI and blockchain together looks incredibly promising. Together, they can solve the most pressing challenges across a variety of industries and pave the way for a more efficient, safer and innovative future.

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