Future of business through the synthesis of blockchain technology, data and AI

a year ago

Challenges persist

Blockchain being a new technology also faces several challenges. The following points broadly explore a few major challenges that are hindering the growth of this technology.

Bitcoin dominance

The future of blockchain is intrinsically connected to Bitcoin which dominated a bit below 50% of crypto markets (at the time of writing). This poses a challenge to projects that do not involve Bitcoin because, during a bear market, most people move out of other cryptocurrencies and hoard their funds in Bitcoin, Ethereum and a few selected stablecoins.

This causes concerns that even if a project is viable, it would be difficult for it to survive a bear market as the project tokens could be dumped in favor of Bitcoin.

Funding concerns

Several investment and wealth funds lost hundreds of billions of dollars in the crypto winter when projects either shut themselves down or halted operations. Very few of them recovered from that situation.

Bloomberg reports that in Q2 of 2023, crypto VC funding is witnessing an 80% fall since 2022. The core mentioned reason is the regulatory uncertainty. There have been some legal successes like in the case of Ripple and Grayscale, but regulatory concerns are still widespread.

This has caused a funding myth that crypto projects are doomed to fail. Also, a lot of blame can be put on projects that didn’t have much innovation at the core of their project and just sought funds for personal gains.

Reluctance of institutional players

Institutional players have conducted numerous pilot projects, several of them satisfactorily, yet they are highly unwilling to express their intentions in public.

JPM Coin by JP Morgan has been immensely successful in cross-border payments, yet there is very little information about the project. Even the Food Trust project by IBM did not receive much attention from its founders.

The reason for such reluctance appears the same as in the previous case. There has been very low regulatory clarity with each government delaying the decision for someone else to try first.

There have been some successes with the UAE and El Salvador, but there is a need for a major economy like in , China or India where there is a very large consumer base.

Concerns around AI

Unethical aspects of AI have been a very large concern for regulators where powerful players could marginalize others. Some AI-generated artworks can be stunning and even better than most skilled artists. These artworks marginalize the human ability to innovate.

There had been a case in the US that was a copyright case, where the court ruled that artworks generated by AI without human involvement cannot be granted copyright protection under US law.

Such incidents are an example of unethical use of AI.

Conclusion

AI and blockchain are emerging technologies and have a very bright future. Both of them are at the cutting edge of innovation. Together they can be used for anti-money laundering, fraud detection and handling large amounts of data. However, their successes critically depend on the challenges that they face, beyond which only the sky’s the limit to their potential.

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