Page 4 - Logistics News July 2019

Thought Leadership
Why blockchain and
AI haven’t clicked yet
Discover three major reasons why a fusion between blockchain and AI should not be
expected in the short term.
ARTIFICIAL INTELLIGENCE (AI) and blockchain
have reached the pinnacle of the technology
hype cycle, so it’s time to combine them, right?
At least, that is what some commentators seem
to think.
But fi rst to the basics: AI, and machine
learning, is software that mimics human cognitive
capacities and autonomously improves itself.
While AI has been around since the 1950s, the
exploding processing power and abundant data
resources of recent years have fuelled a new
wave of optimism. Deep learning – the latest
nuance of machine learning – is employed to
recognise patterns, write and translate texts, or to
let cars drive autonomously.
The blockchain, on the other hand, is a new
form of distributed ledger technology invented
to power a monetary system aside from banks
and governments. This cryptographically-
secured, unchangeable and transparent chain
of transaction blocks enabled digital currencies
and a peer-to-peer movement of money. After
decoupling the blockchain from the currency
idea, techno-enthusiasts’ imaginations ran wild.
They attested to blockchain, amongst others, the
potential to transform supply chains, safeguard
democratic elections or enable energy trading.
Recently, cries for merging AI and blockchain
to create a presumable super-technology
are growing louder. So-called decentralised
intelligence or decentralised AI is the next ‘big
thing’ in the minds of many tech-enthusiasts. And
the narrative is enticing; both technologies power
automation (yet both have their shortcomings).
Among the most serious are the data’s integrity
and privacy when used for machine learning. If
combined, AI would do all the crunching of big
data, and the data to be crunched would be
cryptographically secured by the blockchain. This
could presumably unlock the potential of both
technologies.
Yet, despite the vivid speculations, up to
this day, there are hardly any applications or
pilots. In fact, there are not any proposals that
go into much detail of how blockchain and AI
could be combined. The truth is that lumping
them together is not motivated by real synergy
2 July 2019 | Logistics News
Courtesy www.koganpage.com
potential or, the way it should be, a business
problem, but rather by the hunt for clicks-
generating headlines. Here are the three major
reasons why a fusion between the two should not
be expected in the short term.
Reason #1: Companies haven’t mastered
either technology yet
While many companies claim to be using AI,
that is rather a stretch. Often the term is a fancy
disguise for predictive analytics and other tools
that have been around for decades. What AI
feeds on is big data. Without vast amounts of
datasets, computer algorithms cannot be trained
to ‘think’ by themselves. But, big data has only
been available recently, and often not in the
industries where the implementation of AI would
make the most sense. Thus, the technology is not
yet ready for prime time.
The situation around blockchain is similar.
Most industries are still struggling to fi nd where
best to employ this new technology. Some areas,
such as fi nance and supply chains, have seen the
defi nition of concrete use cases, but even they
are busy making blockchain an effi cient surrogate
for current systems.
There are two large roadblocks ahead. First,
while the blockchain world is converging around
a handful of standards, there is still no clarity
which platform will eventually come to dominate,
and many niches work with chains aside from
the large platforms. The second big issue is the
compatibility between blockchains. Even when
they are built on the same platform, it doesn’t
mean that they can communicate with each
other.
Another limitation in both technologies is
the hardware. AI and blockchain both gobble
immense computing resources – processors and
electricity consumption are pushed to their limits.
In short, neither AI nor blockchain is mature
enough to be blended.
Reason #2: Potential use-cases are built
without a business problem
The wish to combine AI and blockchain is
stronger than the actual need, as can be seen in