Decentralized AI: How Blockchain Can Power AI Without Centralized Control
AI has transformed industries worldwide, from health to finance, offering high-speed data analysis and decision-making opportunities. However, most AI systems today are controlled by centralized entities, such as big tech companies or governments. This raises concerns over privacy, data security, and monopolies.
As technologies like blockchain evolve, questions surrounding the price of Solana and other blockchain assets become increasingly relevant, especially as they might power decentralized AI systems.
As of late 2024, projects like SingularityNET, Ocean Protocol, and Fetch.ai continue to garner attention for their potential in decentralized AI. SingularityNET is a platform for developers and businesses to share and deploy AI tools, promoting transparency. Ocean Protocol is used for data sharing while preserving ownership and prioritizing user privacy. Fetch.ai allows for “decentralized decisions across logistics, finance, and energy sectors.” A Forbes article from October 2024, written by a professor at Penn State Dickinson Law, emphasizes that blockchain’s decentralized and immutable structure offers “a pathway for AI to become more ethical, transparent, and accountable.”
What is Decentralized AI?
Decentralized AI refers to systems of AI that are not controlled by a single entity. Instead, the control and decision-making processes would be distributed across many participants within a network. That being said, in this type of system, peer-to-peer technology will be reliant and no central authority exists. Issues related to control are resolved by breaking it down into parties.
Blockchain as the Backbone of Decentralized AI
Blockchain technology is one of the most prominent elements of decentralized AI. At its core, blockchain technology refers to a distributed ledger that records transactions across numerous computers. This makes it very difficult for rogue actors to infiltrate, rendering the system tamper-proof while still being transparent.
The European Investment Bank in its 2024 reports noted how AI and blockchain “create opportunities for a green and digital economy.” However, it highlighted that the European Union remains responsible for only 7% of annual equity investments in AI and blockchain, while the US and China account for a combined 80%..
This is how blockchain helps power decentralized AI:
1. Decentralized Data Storage: AI needs tremendous volumes of data to work efficiently. In centralized systems, the data is concentrated in one location and, therefore, there is a risk that this data could be hacked or misused. Google, for example, stores more data than any other company on Earth, but its data isn’t fully decentralized. Blockchain ensures that data can be spread across a number of nodes in a network. This way, no particular individual or authority controls all the data and, thus, reduces the threat of breaches and increases privacy.
2. Transparency and Trust: Blockchain is perhaps one of the most transparent technologies that have emerged in recent times. When used in AI systems, every transaction and every single action taken are recorded and can be seen by everybody in the network. It also reduces the risk of manipulation by any party.
3. Collaborative and Innovative: blockchain-based decentralized AI promotes collaboration among all involved parties. Because no one is in control, multiple contributors can contribute data, algorithms, and insights to improve AI capabilities. This will spur innovative thinking and help build far more solid and unbiased AI systems. A 2024 update from Harvard Business Review, co-authored by a professor of strategic management in business and economics, stated that “Blockchains fundamentally alter each phase of a collaboration, including (1) partner selection, (2) agreement formation, and (3) execution.” The authors concluded that blockchains are widely used in organizations today and that “the importance of this technology will only continue to grow over the next decade.”
Benefits of Decentralized AI Using Blockchain
AI combined with blockchain has many benefits over the traditionally centralized AI system.
1. Increased Security: Decentralized AI is more secure because there isn’t a central point of failure. If someone were to successfully breach a centralized system, it only means that you’ve accessed all the data kept in one location.
2. Enhanced Privacy: Privacy is one of the largest concerns in the current data-driven world. In a centralized AI system, a user entrusts much authority to whom their data is collected, stored, and used. With decentralized AI on the blockchain, users would be able to hold more control over their data. The blockchain can make use of cryptographical methodologies to anonymize data and be accessible only by authorized parties. IBM has emphasized in 2024 updates that AI “can help advance almost every field in healthcare” while blockchain technology ensures patient privacy is preserved.
3. Democratized Access: Centralized AI systems usually come under the umbrella of a few big companies that at times restrict access to advanced AI technologies for smaller parties. Decentralized AI is open to anyone with access to the network, meaning this democratized form of AI allows for more participation in the development and use of AI. Companies like Amazon, Coinbase, and Facebook have used tools like Token Metrics, which uses AI to analyze cryptocurrency trends. The tool scans data from over 9,000 crypto and NFT projects in 2024 to help with investment decisions.
4. Absence of Bias: Centralized AI systems are perceived to be biased, primarily because the training datasets are usually owned by one or even one entity. Decentralized AI, however, is run by data generated by a myriad of sources and therefore less biased. More stakeholder involvement in the training process as well as decision-making can help decentralized AI systems produce fair and accurate results.
5. Innovation and Interoperability: Decentralized AI fosters innovation as the result of contributions from multiple parties. Organizations, developers, and researchers can interact with each other and share knowledge, which leads to quicker advancements. Further, interoperable decentralized AI systems can be designed; these make for easy interactions between the decentralized system and others using it or developing it within AI systems and platforms.
Challenges and Future Outlook
While decentralized AI on blockchain is beneficial in many ways, challenges remain. Scalability continues to be a major concern as of 2024 since blockchain networks grow slower and inefficient as their size increases. Additionally, regulatory hurdles still need to be overcome, particularly those involving data privacy laws and transactions crossing borders.
Despite these challenges, the promise of decentralized AI is bright. More decentralized AI applications are expected shortly as blockchain technology continues to evolve, with such innovation and growth at unprecedented levels. In 2024, SingularityNET released its “Decentralized AI Economy Framework,” a document outlining future pathways for decentralized AI and blockchain integration.
Conclusion
Blockchain-based decentralized AI can transform the whole notion of the creation and regulation of an AI system. Distributed control via a network will make it more secure, transparent, and accessible.
The landscape will change as the technology grows, which will lead to the era of decentralized AI as a new norm in AI development. These blockchain-AI systems will be perfectly suited to fuel further growth and accelerate technological development. The rapid integration of decentralized AI in 2024 indicates that we are on the brink of a paradigm shift in AI development and application.