Practical Artificial Intelligence and Blockchain

A guide to converging blockchain and AI to build smart applications for new economies

Ganesh Prasad Kumble

• Verlag: Packt Publishing
• Jahr: 2020
• ISBN:
  9781838825072
• Auflage: 1
• Thema: Computer Science
• Thema: Artificial Intelligence (AI) & Semantics

Learn how to use AI and blockchain to build decentralized intelligent applications (DIApps) that overcome real-world challenges

Key Features

• Understand the fundamental concepts for converging artificial intelligence and blockchain
• Apply your learnings to build apps using machine learning with Ethereum, IPFS, and MoiBit
• Get well-versed with the AI-blockchain ecosystem to develop your own DIApps

Book Description

AI and blockchain are two emerging technologies catalyzing the pace of enterprise innovation. With this book, you'll understand both technologies and converge them to solve real-world challenges.

This AI blockchain book is divided into three sections. The first section covers the fundamentals of blockchain, AI, and affiliated technologies, where you'll learn to differentiate between the various implementations of blockchains and AI with the help of examples. The second section takes you through domain-specific applications of AI and blockchain. You'll understand the basics of decentralized databases and file systems and connect the dots between AI and blockchain before exploring products and solutions that use them together. You'll then discover applications of AI techniques in crypto trading. In the third section, you'll be introduced to the DIApp design pattern and compare it with the DApp design pattern. The book also highlights unique aspects of SDLC (software development lifecycle) when building a DIApp, shows you how to implement a sample contact tracing application, and delves into the future of AI with blockchain.

By the end of this book, you'll have developed the skills you need to converge AI and blockchain technologies to build smart solutions using the DIApp design pattern.

What you will learn

• Get well-versed in blockchain basics and AI methodologies
• Understand the significance of data collection and cleaning in AI modeling
• Discover the application of analytics in cryptocurrency trading
• Get to grips with open, permissioned, and private blockchains
• Explore the DIApp design pattern and its merit in digital solutions
• Find out how LSTM and ARIMA can be applied in crypto trading
• Use the DIApp design pattern to build a sample contact tracing application
• Get started with building your own DIApps across various domains

Who this book is for

This book is for blockchain and AI architects, developers, data scientists, data engineers, and evangelists who want to harness the power of artificial intelligence in blockchain applications. If you are looking for a blend of theoretical and practical use cases to understand how to implement smart cognitive insights into blockchain solutions, this book is what you need! Knowledge of machine learning and blockchain concepts is required.

Section 1: Overview of Blockchain Technology

In this section, we will cover the basic concepts of Blockchain and AI, and compare their various forms and implementations.

This section comprises the following chapters:

• Chapter 1, Getting Started with Blockchain
• Chapter 2, Introduction to the AI Landscape

Getting Started with Blockchain

"A blockchain a day keeps centralization away!"

Emerging technologies such as blockchain and AI have reached the pinnacle of visibility, acceptance, and also some speculation from various academics and industry experts. With a common aim to reduce operational inefficiency and add transparency, these two emerging technologies are now in great demand. From disruptive start-ups to large-scale enterprises, everyone is racing toward the opportunity to become a leader in blockchain- and AI-based solutions. This book aims to prepare you for the next leap of convergence of these two technologies and guide you to become technically capable of building these solutions.

This chapter provides a brief overview of the current blockchain landscape. The key topics covered in this chapter are as follows:

• Blockchain versus distributed ledger technology versus distributed databases
• Public versus private versus permissioned blockchain
• Privacy in blockchains
• Understanding Bitcoin
• Introduction to Ethereum
• Introduction to Hyperledger
• Other blockchain platforms – Hashgraph, Corda, and IOTA
• Consensus algorithms
• Building DApps with blockchain tools

Technical requirements

This chapter assumes you have a basic awareness of blockchain and its impact on traditional systems for transactions.

Blockchain versus distributed ledger technology versus distributed databases

There have been several debates on how to differentiate blockchains from Distributed Ledger Technology (DLT) and distributed databases. Based on some of the user- and application-level features and heuristics, we can observe the following differences:

Feature	Blockchain	DLT	Distributed Database
Immutability	The information persisted in blockchains cannot be removed or updated without a new identifier to the target data.	Although most DLTs are pro-immutability, there are a few exceptions where immutability is not a design constraint.	Most distributed databases are not immutable due to design limitations.
Logical execution	Smart contracts can be used to enforce business logic on data from a blockchain.	DLTs offer the execution of logic on the data within them, as well as on user inputs.	User-defined functions and stored procedures are normal approaches that are used here.
Accessibility	Data in a public blockchain is stored in the form of a transaction or account states in a block and is visible and accessible with middleware.	Data is private in a DLT and may, in some cases, be encrypted in the DLT entry. Data can only be accessed by participating stakeholders.	Data is persisted within the distributed data clusters spread across the globe for faster access, using traditional client-server techniques.
Verifiability	All the transactions are verified before a change is made to the state of an account.	Most DLTs do not offer verification algorithms or modules as a design restriction to applications.	The verifiability of data is not offered as the state of accounts is not persisted in a specific structure.
Incentivization	Most blockchains use several economic models to incentivize their stakeholders.	Stakeholders in a DLT group host the nodes and are self-incentivized to run their business more confidently.	The company manages the data for sustainability and so no extra incentivization can be observed.

Let's now compare these technologies with an example use case discussed in the following section.

Comparing the technologies with examples

The following scenario is provided to aid your understanding of the core differences between the preceding three implementations.

Imagine that you plan to create a new digital platform for stock photography. If you want to invite photographers all over the world to use the platform and allow them to upload their work and be incentivized with their royalties automatically paid off by the consumers, you'd want to use blockchain to offer public access and incentivization and to transfer the royalties directly from the consumer to the photographer, thereby eliminating the need for a third party performing the duty payment collection, guaranteeing the return of royalties but with a service fee.

However, if you want your platform to form a private consortium of photographers, with their art exclusively available to a limited audience, and to handle royalties in conjunction with other means, you would use a DLT.

Finally, if you intend to use your platform to exhibit art by an eligible set of photographers that are accessible across the globe, with or without royalties (which is handled offline), you'd form a cluster of nodes that host this data and logic to handle access and payments. So, you would use distributed databases.

Let's now further discuss the types of blockchains available for different use cases.

Public versus private versus permissioned blockchains

Public blockchains were designed and developed with a focus on ensuring that any number of interested parties can execute the business logic and access transactional information. Similarly, any interested party can also verify and validate the transactions incoming to the network, as well as be rewarded for the process.

Private blockchains are implemented to ensure that access to business information is limited and only accessible to a limited set of participating stakeholders.

Permissioned blockchains are a hybrid implementation of what both public and private blockchains have to offer. Permissioned blockchains are implemented if data is to be accessed by a specific stakeholder. This is achieved by leveraging private networking, as well as the encryption of transactional user data, which is also stored in blocks that may consist of transactions relating to other stakeholders in the consortium.

Comparing usage scenarios

The following table shows how the three types of blockchain can be used in various scenarios. They are:

Attribute versus variant	Public blockchains	Private blockchains	Permissioned blockchains
Network barrier	Access to the network is not restricted. The details inside public blockchains are widely accessible to all users.	Access to the network is limited by an IP or a DNS. Only a few people with suitable credentials can join the network.	Access to the network is limited to verified participants. Only selected people can join the network with limited permissions to read, write, or both.
Restrictions	There are many different actions that the user can perform, such as develop a smart contract and use it, host a node as a validator, and so on.	Virtually, there are only two common roles for members in a private blockchain—facilitated nodes as validators and DApps users.	Based on the role of the members, the users may be able to deploy DApps, use DApps, validate transactions, or all three.
Encryption	Almost all of the user data in blocks is not encrypted as the general goal is to serve the information to a public audience.	Encryption may not be used if there is a trust quotient between the participating stakeholders.	Encryption is widely used as it involves various stakeholders in the networks with potential conflicts of interest.

In the next section, we will further understand the privacy options in blockchains.

Privacy in blockchains

Blockchains add new values, such as transparency and provenance of information. However, many people mistakenly believe that all transactions are publicly viewable in a blockchain. However, in reality, not all the blockchains necessarily facilitate transactions with public viewability:

• Motivations: Several applications on blockchains are not just built for enterprise use cases. Many blockchain applications are now targeting mass consumer audiences. The internet, in recent years, has become a testbed for various approaches in preserving the privacy of users. Unlike any other trend or improvement on the current state of the internet, most blockchain projects aim to deliver a privacy-first mode of operation to users by leveraging pseudonymous cryptographic wallets without revealing the identity of the senders and receivers. Some examples of privacy-first blockchains include Monero, Quorum, and Zcash.
• Approaches: As we already know, public blockchains have design limitations with respect to privacy. As global access to user data is one of the prominent objectives of a public blockchain, we see very few applications of cryptography in them. However, the emerging blockchains such as Zcash, Monero aim to offer untraceable, secure, and analysis-...

Inhaltsverzeichnis

• Title Page
• Copyright and Credits
• About Packt
• Foreword
• Contributors
• Preface
• Section 1: Overview of Blockchain Technology
• Getting Started with Blockchain
• Introduction to the AI Landscape
• Section 2: Blockchain and Artificial Intelligence
• Domain-Specific Applications of AI and Blockchain
• AI- and Blockchain-Driven Databases
• Empowering Blockchain Using AI
• Cryptocurrency and Artificial Intelligence
• Section 3: Developing Blockchain Products
• Development Life Cycle of a DIApp
• Implementing DIApps
• The Future of AI with Blockchain
• Moving Forward - Resources for you
• Other Books You May Enjoy