The Impact of Blockchain and AI Convergence on Global Markets
AI's Evolution: From Labs to the C-Suite
The convergence of Blockchain technologies and Artificial Intelligence (AI) technologies is taking center stage globally, as this dynamic duo unlocks stronger authentication, augmentation, and automation opportunities across sectors and a wide range of applications.
As AI strategy has graduated from innovation labs into the C-suite, the vast majority of business leaders expect to implement generative AI solutions that they expect will lead to real-world business results. And it is only speeding up. OpenAI has noted a shift in their computing requirements, which accelerated from doubling every two years to every three and a half months from 2012 to 2018. To manage these demands, decentralized computing solutions are emerging, offering on-demand resources at competitive rates. The evolution of the use of blockchain technology is central to this.
Blockchain's Role in Decentralized Computing
To date, blockchain technology has primarily been utilized for managing cryptocurrencies, enabling the creation and execution of smart contracts, and facilitating the ownership and exchange of digital assets such as nonfungible tokens (NFTs). For example, the convergence of AI and blockchain technology can enhance the capabilities of both fields, with AI improving the functionality of smart contracts and blockchain providing a secure, transparent environment for AI operations. By harnessing blockchain’s immutable and transparent nature, companies can seamlessly integrate valuable IP guardrails into generative AI chatbot training, support in creating more efficient cybersecurity protocols, or even help with launching decentralized energy grids that can enable peer-to-peer energy trading, for example.
DePIN Projects: Revolutionizing Physical Infrastructure
The latter example is what DePIN projects are all about. DePIN projects leverage blockchain and apply the technology to physical infrastructure and systems such as energy grids, supply chains, telecommunications, transportation systems, and more. By decentralizing these networks and helping to integrate the use of interconnected IoT devices within the network, for example, DePIN is helping to automate resource management, reduce operational costs, and increase service efficiency and resiliency. It has tangible real-world applications, and the DePIN market capitalization reached US $36.58 billion by midApril 2024.
The Growth of 'Restaking' in Decentralized Finance (DeFi)
Other major developments in the blockchain space in the past 18 months that we cover in the report include the ramping up of ‘restaking’ in the decentralized finance (DeFi) sector. Total Value Locked (TVL) in staking protocols has soared worldwide, from US $1.1 billion on 1 January 2024, to US $13.97 billion by 21 April 2024.
Decentralized Identifiers (DIDs): Empowering Secure Digital Identities
Decentralized identifiers, or DIDs, are also gaining in popularity as cybersecurity becomes increasingly important. DID systems empower individuals to manage their identities securely and independently, addressing privacy and security issues prevalent in Web2 environments where data is controlled by centralized entities. The global decentralized identity market was valued at a measly US $181.8 million in 2021, but is forecasted to reach US $46.5 billion by 2030.
The Path Forward for Blockchain and AI Technologies
The interest of top-tier investors, including PayPal Ventures, Sequoia Capital, Andreessen Horowitz (A16z), Pantera Capital, Binance Ventures, and Coinbase Ventures across all of these blockchain applications show real promise of the development of each. We hope this report helps shed light on what some of the upcoming trends are, to help us understand the developments in this fast-moving arena.
To learn more about the innovations driving blockchain forward – read the full report here.
