Artificial Intelligence (AI) and Web3: How are they Connected?

What is AI?

Simply put, Artificial Intelligence (AI) is the ability of machines to do functions that we usually associate with a human mind – for example, doing a reasoning task, solving a mathematics problem, stock market trading, and much more. At its core, AI combines computer science with robust datasets to enable problem-solving.

Since its inception, AI has had many cycles of hype, but the release of OpenAI’s ChatGPT last year has taken the excitement and anticipation of AI to new heights, marking a significant milestone, particularly in the field of Natural Language Processing. Furthermore, generative models have proven their adaptability beyond language, showcasing the capacity to learn the grammar of diverse data types such as software code, molecules, natural images, and more.

The applications of AI are evolving day by day, and in this article, we will discuss its role and use cases in Web3.

What is Web3?

Web3 is defined as a series of inter-connected and open-source applications. Powered by the blockchain computing architecture, these applications are decentralized, enabling trust and transparency where data and transactions are secured and distributed across a network of nodes, eliminating the need for central authorities or intermediaries.

Web1 (1990-2004) was static and read-only (e.g. Yahoo News), with users consuming information. Web2 introduced interactivity (e.g., Facebook, YouTube) but led to privacy concerns (exploiting user data for targeted advertising) and centralized control (making decisions unilaterally, like blocking any particular account). Web3 aims to be decentralized, giving users ownership and governance through blockchain, addressing Web2’s limitations, and fostering a more user-controlled internet.

An example of a Web3 application is the Brave Browser, a Chromium-based browser renowned for its Web3 integration and cryptocurrency integration. Operating on public blockchains and leveraging IPFS (a transfer protocol that sends and delivers data faster than HTTPS), Brave enables users to earn crypto, link wallets, explore NFTs, and access DApps seamlessly. With robust security features and a focus on online safety, Brave offers an ideal browsing experience for Web3 enthusiasts.

Role of AI in Web3

Autonomous Agents

Autonomous Agents could be provided with real-time data and a set of predefined rules to enhance the capabilities of smart contracts in Web3 platforms. Additionally, these agents can negotiate, execute transactions, and provide personalized services. The use of such agents automates complex processes, minimizes intermediaries, and enhances the overall Web3 ecosystem.

Personalization

In the Web3 context, artificial intelligence (AI) is pivotal in crafting tailored user experiences through data analysis, interaction patterns, and preferences. AI employs collaborative and content-based filtering techniques, generating personalized recommendations and enhancing various facets of Web3 platforms. 

Such personalization fosters deeper user engagement by aligning content and interactions with individual needs and preferences, ultimately enriching the decentralized Web3 experience and facilitating efficient content discovery and curation.

Decentralized Data Marketplaces

By harnessing AI, decentralized data marketplaces can be created that empower individuals with enhanced data control. AI algorithms enable selective data sharing and monetization while upholding privacy. They facilitate data analysis, categorization, and efficient, secure transactions, optimizing matching between data buyers and sellers in these decentralized markets.

Analytics & Insights

By leveraging AI methods like machine learning and natural language processing, Web3 networks can efficiently process and analyze extensive data. This empowers users with predictive analytics, sentiment analysis, and personalized recommendations, enhancing their understanding of decentralized dynamics and improving navigation within the landscape.

Security & Privacy

Web3 ecosystems can improve cybersecurity and safeguard user data privacy by utilizing advanced AI techniques. AI models can analyze extensive data to identify vulnerabilities, malicious behavior, and anomalies. Machine learning algorithms can prevent cyber threats like phishing and DDoS attacks. By proactively ensuring security, AI enhances user trust and confidence in Web3 platforms and applications.

Decentralized Autonomous Organizations (DAOs)

AI is pivotal in the development of Decentralized Autonomous Organizations (DAOs). These blockchain-based organizations automate voting, fund management, and operations and achieve greater transparency and adaptability by integrating AI and optimizing Web3 governance models.

Real-World Examples of Use of AI in Web3

Medibloc

Medibloc, a decentralized healthcare platform, utilizes the Ethereum blockchain and smart contracts to facilitate secure data sharing and healthcare access. Its native cryptocurrency, MED, supports transactions and rewards for data contributions. 

AI is harnessed for personalized treatment advice, data analysis, and automation. The platform fosters patient connections and experience sharing while AI processes medical data, spotting trends, generating tailored recommendations, and automating tasks like medication reminders.

Chainalysis

Chainalysis, established in 2014, is a blockchain analytics platform utilized by various entities, including cryptocurrency exchanges, law enforcement, and financial institutions, to uncover and prevent unlawful activities within the blockchain.

The platform employs a proprietary database of known illicit addresses and transactions to centrally store the data from diverse blockchain networks like Bitcoin and Ethereum. The system detects irregularities like unusually large transactions or links to fraudulent addresses through AI-driven processing, subsequently issuing alerts for potentially suspicious transactions. 

Augur

Augur is a decentralized prediction market on the Ethereum blockchain. Users create and trade event outcome predictions, aided by AI that analyzes diverse data sources like news, social media, and historical data to enhance accuracy. This analysis guides users in making more informed predictions and trades, with accurate predictions earning rewards fostering AI-driven prediction improvement.

Ocean Protocol

Ocean Protocol focuses on constructing a decentralized data exchange for secure data sharing and monetization, safeguarding privacy. The company’s scope extends to developing decentralized autonomous organizations (DAOs) and other Web 3.0 innovations. 

Enterprises contribute supply chain data to the platform, with Ocean Protocol’s AI processing it to extract valuable insights, aiding in supply chain enhancement such as identifying bottlenecks and predicting demand. The system automates tasks like issue resolution and logistics optimization. Data services are facilitated by the native cryptocurrency, Ocean Token (OCEAN).

MyCryptoHeroes

MyCryptoHeroes is a blockchain-based gaming platform where players collect, train, and battle with distinctive digital heroes using non-fungible tokens (NFTs) on the Ethereum blockchain. The platform’s native cryptocurrency, GUM, acquires in-game assets and facilitates trades, while AI offers personalized suggestions and automates tasks. Alongside this, a social dimension enables hero trading and player interaction within the game.

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