Bringing together Blockchain, Internet of Things and Artificial Intelligence: Turning Skynet into reality
Author: Keith Bedell-Pearce, chairman, 4D
The events of annus horribilis 2008 changed the
world forever. The change was dubbed the "New Normal" and in turn
gave rise to shifts in economic and political power which would have been
considered the stuff of fantasy fiction as 2008 came to a close.
Fast forward 11 years. Shifts in the financial
tectonic plates apart, we have seen the rise and rise of social media as the
facilitator of both social and political change, the migration of computing
power from deskbound PCs and laptops to mobile devices and data migrating from
earth-bound hard disks to the cloud. Social media, mobile and cloud have now
become the new technological norm and while all three will continue to flourish
and develop, the next 10 years will see technological innovation dominated by
three new additions to the line-up of defining digital technologies. They are
Blockchain, Artificial Intelligence and the Internet of Things.
It is worth noting that each of these
technologies have been around for quite a while, at least in terms of the
relatively short timeline of digital computing. AI, based on the primitive
computing of the day, emerged as a defined academic discipline in 1956. The
first example of IoT was an internet-connected Coke machine in 1982. The
structure of Blockchain was first conceived in 1991. Why have these rather
ancient technologies now come into prominence around the same time? The answer
is the combination of a huge increase in available computing power of
individual devices (and even more vast power with these devices forming
peer-to-peer networks) and the equally vast proliferation of data and its
availability. These two factors have created a new digital renaissance.
While all three of these technologies deliver
standalone functionality, each has the potential to interact with either or
both of the other two. Paradoxically, this complementarity arises from the
fundamentally different characteristics of each of the three technologies.
Blockchain is an enabling technology in that it
defines protocols for decentralised databases that allow task specific applications
to deliver with (as yet) unhackable security, resilience and trust. It is an enabling
technology in the same way as TCP/IP enabled email and the world wide web to
gain global acceptance and to form the foundation of the digital economy. Many
believe that Blockchain will have similar or even bigger impact than TCP/IP.
Artificial intelligence on the other hand is
task-specific software with the ability to modify the way its algorithms
perform as a result of previous outcomes. This is sometimes called
"machine learning" although this just is one sub-field of AI which
sits along other methodologies such as artificial neural networks. The result
is the software - or the devices and machines in which it is embedded - seems
to be imbued with intelligence. The operative word here is "seems", although
the degree of sophistication already achieved by advanced AI systems can now
outperform the results of expert human counterparts.
Gartner’s definition of the Internet of Things
is a network of physical objects that contain embedded technology to
communicate and sense or interact with their internal states or the external
environment. Nest, Apple Watch and your smart phone are all part of and vectors
for the IoT.
The bringing together of Blockchain, AI and IoT
is still largely in the development stage but there are already a significant
number of real-world examples of combinations of the three technologies.
From example, in the case of AI and IoT,
Rolls-Royce launched in February 2018 its IntelligentEngine vision with an
aircraft engine that is "connected, contextually aware and comprehending."
This is based on advanced data analytics of the real-time output of thousands
of aircraft engines and AI using machine learning. Another example is
Microsoft's use of AI in providing its ScanDiags service that automates MRI
interpretation and documentation. Diagnostic outcomes now are said to be far
more accurate than those produced by specialist MRI radiologists.
There are plenty of theoretical proposals for
the bringing together of Blockchain and AI but examples of practical
implementation are thin on the ground. Conceptually, at first sight, Blockchain
and AI appear to be strange bedfellows where Blockchain is by definition
decentralised whereas centralisation in the form of specific task focus is a
key characteristic of AI.
In June 2018, at the Brains and Chains
conference in New York, Matt Turck, a managing director of US venture capital
firm First Mark, identified what he described as "two big ideas" for
the intersection of AI and Blockchain:
networks and decentralised autonomous organisations.
The Decentralised AI marketplaces turn out not to
bring together Blockchain and AI in a synergistic combination but simply use a
Blockchain platform for the management or access to AI services. These services
range from focus on specific applications (for example SingularityNET) to
betting on stockmarket movements. In the latter case, Numerai is an artificial
intelligence hedge fund based on the premise "because Numerai abstracts
its financial data, data scientists do not know what the data represents and
human bias and overfitting are overcome". Perhaps a blindfold, a pin and a
list of FTSE 100 constituents might be to do the job just as well. A review of
the various decentralised AI marketplaces shows one common characteristic -the
use of crypto-currencies and tokens. Caveat investor should be the watchword
for this sector.
The second category of AI networks and
Decentralised Autonomous Organisations looks more promising. Matt Turck’s
premise is that AI-driven bots could be provided with a Blockchain-based
organisational model "to help the various AI bots cooperate in a
transparent manner”. Fetch AI is cited as an example of this. Its website
claims it has “built the world’s first truly smart ledger, allowing data to act
autonomously. Using machine learning and AI technology, we enable data to
cooperate, solving problems instantly and presenting answers directly to
An example of this second big idea category is
Botchain – “a decentralised identity and audit ledger for autonomous AI
agents". Blockchain and autonomous AI agents (aka “smart bots”) are the
basis for the concept of AI-powered Decentralised Autonomous Organisations – or
This is where it gets scary because the
underlying idea is that an AI DAO could be a decentralised organisation
entirely run by machines with no or limited human intervention.
In these circumstances, AI, Blockchain and IoT
would truly come together and at that point, the smart bots could take over. The
decentralised nature of the infrastructure means there is no off switch. Skynet
becomes reality. Hopefully, it’s just a
coincidence that “ai dao” in Mandarin means “grief”.
Back to reality, Blockchain, AI and IoT over
the next ten years individually and in combination will have a huge impact on
both the global economy and the way we live. As with their predecessor defining
digital technologies, the new digital renaissance technologies will bring
significant positives along with new challenges, particularly in the social and
From an economic point of view, the digital
renaissance technologies will deliver huge productivity gains which will be
reflected in continued strong growth in the global economy with emerging
economies getting disproportionate benefit as there will be less legacy
infrastructure to hamper early adoption.
All three of the new renaissance technologies
will bring about major changes in the way work and processes are carried out,
with the elimination of whole swathes of activity previously carried out by
humans or the activity being carried out by smart machines, bots or smart
processes. This will mean significant change in the nature of work and with
that, social and political change. In many respects, the major challenges for
the future will be how this social and political change is managed rather than
the harnessing of the new renaissance technologies.
Keith Bedell-Pearce is the chairman of 4D. He has over 40
years’ management experience, including 10 years as a main board director of Prudential
plc. More recently he has been the chairman of a number of businesses in the
private and public sectors and until his retirement in 2014, the Senior
Independent Director of one of the UK’s largest quoted fund management
businesses. He is also an investment adviser to the Royal Society and an
honorary professor at the University of Warwick where he is a member of Council
and the University’s Treasurer. Keith has been closely involved in computing
since the late 1960s, ranging from a thesis for his M.Sc. in 1969 on the
potential of computers for running mathematical models for retail stock
forecasting to becoming the first chairman of Directgov. It’s his fault
therefore if Marks & Spencer don’t have your size in stock or you can't
renew your car tax online. In 2009, Keith was awarded a CBE for public service
in the Queen's Birthday Honours. Keith is the majority shareholder in 4D. As
well as chairing 4D's board, he also chairs the weekly management meeting and
takes the lead in the strategic development of the business.