AI, blockchain and IoT: the three-way that needs to happen

Blockchain technology has often been described as a solution in search of a problem. This negative view has its origins in the fact that so many blockchain movers and shakers (purposefully) misunderstood the revolutionary vision of a peer-to-peer electronic cash that Satoshi Nakamoto detailed in his 2008 Bitcoin white paper.

Bitcoin was temporarily limited in its size and scope to allow this emerging technology to take root before imposing significant demands on it. Satoshi said at the time that, as the network’s individual blocks grew to accommodate more transactions and the block reward ‘halved’ every four years, transaction fees would eventually become Bitcoin miners’ primary compensation.

But once Satoshi was out of the picture, these self-sustaining growth plans were abandoned. In 2017, the protocol’s block-size was permanently constrained by the BTC Core developers, with throughput limited to seven transactions per second (TPS). As the block reward continued to shrink—often along with the BTC token’s fiat value—and transaction fees failed to ride to the rescue, the mining economy became unsustainable.

Every day brings new stories of mining groups ‘pivoting’ to artificial intelligence (AI), repurposing their racks of GPUs for more profitable purposes supporting AI data centers. This is arguably a less wasteful expenditure of energy than keeping the slots spinning at the ‘crypto casino,’ but it spells trouble for blockchains focused on ‘digital gold.’ 

With fewer mining companies engaged in proof-of-work consensus mechanisms, the security of these blockchains is impaired. Worse, hash power is becoming more concentrated, making a mockery of ‘decentralization’ mantras.

I never bought into that ‘digital gold’ nonsense, which is why I support the BSV Blockchain , the only protocol that can trace an unbroken history to the Bitcoin Genesis block. BSV honors Satoshi’s vision by imposing no artificial ceiling on its block-size, allowing it to process over 1 million TPS, thereby ensuring a sustainable economy.

I also don’t agree with miners who appear to believe that they can do blockchain or AI, but not both. I think each of these groundbreaking technologies has a lot to offer the other, provided the blockchain in question is up to the task.

The insatiable data demands of AI large language models (LLMs) are the stuff of legend. But training LLMs on public data alone has its limitations, and AI companies are increasingly interested in adding private data to this mix.

Some individuals point to the possibilities of combining blockchain tech with federated learning, a form of collaborative machine learning that focuses on data stored across multiple servers or devices—including personal devices—without the need to publicly share that data. Blockchain’s immutable and distributed nature could offer both transparency regarding interactions with this data as well as verification that this data hasn’t been fiddled with before it's fed into the machine.

LLMs are also notorious for serving up ‘hallucinations’ in response to customer prompts. While the causes of these factual gaffes remain somewhat opaque, AI’s omnivorous gorging on any and all public data sources ensures that a significant volume of erroneous data goes into the secret sauce of these LLMs.

LLMs trained on immutable blockchain data from verified sources could help reduce the frequency and severity of AI fantasies. Admittedly, these would have to be select areas of focus rather than the standard ‘I know everything about everything’ LLM, but there are likely numerous cases in which accuracy would trump variety.

But the immediate value of an AI-blockchain marriage will be seen in the Internet of Things (IoT) sector. The ongoing adoption of the IPv6 standard is opening the floodgates in terms of the number of unique addresses to which IoT devices can be assigned. This is creating an unprecedented flood of data, the volume of which defies any human capacity to process with any degree of understanding.

AI will be required to manage and interpret this autonomous data tsunami, as will a blockchain like BSV, thanks to its ability to process millions of transactions with fees measured in small fractions of a cent. BSV, with the help of Amazon Web Services and Aerospike, is currently conducting tests of its Teranode vertical scaling project  that will serve the needs of high-volume transaction nodes for enterprises and governments. 

Even better, the marriage of AI, BSV and IoT will help bring about Metanet, a better, more inclusive and dynamic internet. Metanet is an economically integrated online system that enables cost-effective, instant micropayments, allowing easy access and monetization of webpages, services and every single piece of online data. This will bring about a global democratization of access to data and services—a world unconstrained by bureaucracy. 

So when I hear people say blockchain is a solution in search of a problem, I suspect the real problem is that some blockchains chose to ignore Satoshi Nakamoto and prioritize big bucks over big blocks.