Taking a deeper look into AI and Blockchain
Technology, especially new technology, has always had something of a divisive effect; that is it can be seen as black or white, working in good ways or bad. If we look back in history, any technological advance is greeted with great enthusiasm by early adopters and shunned and ridiculed by those with a more traditional outlook on life.
The evangelists often only focus on the future potential and dismiss any concerns or risk factors, whilst the luddites ignore any immediate and possible future benefits and instead highlight any potential downsides, even if these are greatly exaggerated or done from a stance of not having enough knowledge of the matter.
By very definition, when first introduced, groundbreaking technology is new and untested, and whilst its immediate and future benefits might be seen by some, to others the risk of the unknown far outweighs any possible gains. On top of that, many people are simply adverse to change for any reason and this seems to only get worse with age.
Technology is, of course, all around us, and the speed of growth in the use of technology means that it is now present in one form or another in almost every aspect of our lives. Some of the ways in which we interact with new technology is very obvious, such as the internet or smart phones, whilst other new technology has become prevalent but is nevertheless working away in the background and is not known about by many.
Two such technologies are Artificial Intelligence (AI) and Blockchain. These are both now in operation in so many aspects of our lives and yet they are behind the scenes and their very presence is unknown by many people. More importantly, their benefits are going unused by many companies, both large and small, although that is now changing. Perversely though, it is tech startups that are at the very forefront of developing these technologies and developing best use cases for them that are then taken on by larger corporates.
So what exactly are these technologies and how are they being used?
According to the Harvard Business Review “Broadly speaking, AI can support three important business needs: automating business processes, gaining insight through data analysis, and engaging with customers and employees”. But what this means in reality is that the computers or systems actually learn as they go along, much in the same way as humans do. The initial programme is written but then each and every action adds to the programme and enables it to make better, quicker, and more detailed decisions.
This process of constant improvement means that the more information and data that is processed the better able the system becomes. This in turn means that it reacts more quickly to any given set of circumstances and can even predict what will happen next as it compares a series of events with what has been analysed before. Humans do this all the time but it is the speed of analysis and therefore action that can make systems using AI truly stand out. Indeed, AI is capable of finding patterns in data that humans cannot or, at the very least, do so more quickly.
As mentioned above, AI is now operation in the background and is all around us, from running investment portfolios, to powering apps on smart phones, and from predicting the weather through to learning to drive driverless cars. Other typical use cases include spotting unusual and therefore potentially fraudulent transactions on credit cards or bank accounts, targeting advertising, chatbots used in customer services and many other situations, assessing insurance risk and advising in risk reduction, legal documentation, combatting welfare fraud, and so much more. In fact, the number of uses for AI is increasing so rapidly, and its cost has decreased so much, that it is now being adopted by businesses of every size.
Early stage businesses are often the ones focused on developing the technology which becomes their product for sale to larger end users, as well as simply developing systems to power their own service offering directly to the user. Major AI projects are of course also being undertaken by large tech companies but the proliferation of startups focussed on AI underlines the fact that many entrepreneurs are still finding many new applications for developing it.
If anything, blockchain is even less well known and understood than AI. But, just like AI, it is being used in ever increasing ways by ever more companies. Again, just like AI, its use is making many procedures possible that, until now, have not been possible.
In simplified terms blockchain records events as a series of time stamped individual events that are then added to a chain of previous events which together form an immutable record of what has happened and when. This record is not stored in any one place such as a single server but rather it uses distributed ledger technology (DLT) and is stored on thousands of different servers. Any changes need to be agreed by each and every server, and this ensures that it is not possible to amend any historic data as it simply would not be accepted by all the other servers.
As such, the use of blockchain is now considered in most cases to be a far superior and safer way to store data and record transactions. In transactional cases it is also considered to enable activities such as manufacturing, shipping, trade finance, supply chains, and payments, to name but a few, to operate much more securely, faster, and with reduced costs than was previously possible.
Just a few examples of how blockchain is being used by larger companies include:
- Microsoft is collaborating with Accenture and Avanade on a blockchain-based identity prototype that uses Microsoft Azure in order to aid the 1.1 billion people around the world without legal forms of ID
- Maersk formed a joint venture with Hyperledger to help shippers, ports, customs offices, banks, and other stakeholders in global supply chains track freight and replace related paperwork with tamper-resistant digital records
- UPS and FedEx are just two of the 200+ big names in an alliance exploring blockchain technologies in freight transport
- UBS, Barclays, Credit Suisse, and others are piloting a compliance platform on Ethereum
- Walmart, Kroger, Nestle, and Unilever, among many others, have partnered with IBM to use blockchain to improve food safety through enhanced supply chain tracking
- United Nations Climate Change Coalition is researching how blockchain technology could improve its climate change initiatives
- Nasdaq and Citi have teamed up to use DLT to integrate payments between banks whilst JPMorgan has filed a patent for a blockchain-powered network for interbank settlements
- Docusign and Visa created a blockchain prototype for buying a car in minutes
- Allianz confirmed that it’s testing a token for moving money between its global affiliates to mitigate currency conversion costs and other inefficiencies between the units
And so I could continue, but what is very clear is that when such a diverse range of global top companies from virtually every sector, as well as governments worldwide, understand the benefits of using blockchain and the need to implement it in their business then it is clear that it is the time for every other company to make sure that it does not get left behind.
My new book, Growing with Blockchain, discusses the many ways that in just a few short years blockchain has moved from disruptive potential to operational reality. It examines Blockchain from every angle and cites examples of how startups are adopting the technology and, in so doing, are then bringing about change in entire industries as the larger, more established, players are forced to follow suit.
Between them, AI and Blockchain are revolutionising almost every aspect of our personal and business lives. Whilst this is a quiet revolution, and as individuals it could be argued that we do not need to understand about them, as startups and early stage businesses we really do need to be part of the revolution and that means having at least a basic understanding.
Both AI and Blockchain really are the technologies of the future and if you are the founder, director, or owner of an early stage business then if your own business is not already involved I strongly recommend you find out what AI and Blockchain can do for your business.