AI and blockchain are some of the biggest human innovations of our time.
The influence of both of these tech niches has spread into finance (as we have mostly seen with blockchain), medicine, construction and even education.
However, what happens when we start to mix these two distinct, yet powerful niches?
Some might think that this merger will turn out to be the next best thing. However, people like Vitalik Buterin, the co-founder of Ethereum think that the world should be a lot more careful when it comes to combining AI and Blockchain technology.
Let's start with the benefits.
In a recent blog post published earlier in the week on 30 January, Vitalik Buterin highlighted the potential benefits (and pitfalls of merging blockchain and AI tech).
Some of the insights in this post were very interesting.
In this blog post, Buterin acknowledged the potential benefits of merging blockchain and AI.
In essence, he means that there are some areas in which AI and blockchain can work together in harmony and create value.
A good example of this would be in prediction markets.
AIs are capable of spotting patterns better than any human on a micro-scale, making them the perfect bet for predicting things like the future price of specific assets, weather, et cetera.
Buterin also says that a merger between AI and blockchain could also be used to improve the user experience (UX) of crypto wallets.
AI could be used to explain things like transactions and signatures to layperson users, as well as detect scams, long before they do any harm.
By so doing, users can understand and safely interact with crypto, without the risk of billions of dollars being stolen.
It gets darker from here.
Buterin went further to mention that there may be some scenarios where an AI and blockchain merger could present significant challenges.
A good example is using AI as Oracles or as sources of external data for smart contracts.
Buterin explained that AI oracles can be attacked easily in what he calls "adversarial machine learning" attacks. When these attacks happen to these AI-based oracles, they lead to the loss of huge amounts of money in as little as an instant.
He says that for example, if someone builds a stablecoin that relies on one of these AI oracles to determine the exchange rate, a bad actor could manipulate the underlying AI, causing a depeg and a brutal collapse.
"For the decentralized world, however, it is important to be careful:
if someone builds eg. a prediction market or a stablecoin that uses an AI oracle, and it turns out that the oracle is attackable, that's a huge amount of money that could disappear in an instant."
Buterin also argues that another risky area in which AI can be used is when it comes to enforcing the rules or governance of crypto ecosystems.
The risks come in when open-source AIs (which are available and can be edited by the public) are used.
What happens when someone performs an adversarial attack on one of these models by degrading their performance or even fooling them into producing wrong values?
Buterin says that a fix for this would be to use closed-source AI models which are proprietary and kept from the public (but are not transparent, and can easily be manipulated).
Buterin says that this tradeoff between security and transparency might be the way to go when it comes to merging blockchain and AI and for this…
He mentions WorldCoin.
Not only is Worldcoin closed-source, the Tools for Humanity Foundation (parent company of Worldcoin) also has proprietary iris scanners called Orbs, with which they assign users World IDs.
Worldcoin's mention in Buterin's post may have caused the current spike in $WLD in the weekly timeframe, as shown in the snapshot below:
Not only that, Worldcoin's trading volumes have also gone up by a whopping 281%, to around $214 million processed on WLD over the last day.
According to the charts, Worldcoin is currently testing an important support line and could be poised for a massive 120% rally to $5.3.
According to the chart above, WLD currently trades at around $2.4, and investors should watch the $2.2 support very closely.
If we don't see a break below this line, WLD will likely rebound off the ascending trendline shown above, targeting the $4.8 local high.
And if a break above $4.8 occurs at that point, the cryptocurrency will be free to take things even further to its $5.3 all-time high.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.