Blockchain
What can blockchain do for AI? Not what you’ve heard.
Industries everywhere are asking “What can AI do for us?”
But the blockchain industry, known for challenging norms, is also asking the opposite question: “What can blockchain do for AI?”
While there are some compelling answers, three narratives have emerged around this question that are frequently misleading and, in one case, potentially even hazardous.
Narrative #1: Blockchain can combat misinformation caused by generative AI
An expert panel at a recent Coinbase event concluded that “blockchain can counter misinformation with cryptographic digital signatures and timestamps, making it clear what’s authentic and what’s been manipulated.”
This is true only in a very narrow sense.
Blockchains can record digital-media creation in a tamper-proof way, i.e., so that modification of specific images is detectible. But this is a far cry from clarifying authenticity.
Consider a photo of a flying saucer hovering above the Washington Monument. Suppose that someone has registered its creation in, say, block 20,000,000 of the Ethereum blockchain. This fact tells you one thing: The flying saucer image was created before block 20,000,000. Additionally, whoever posted the image to the blockchain — let’s call her Alice — did so by digitally signing a transaction. Assuming that Alice’s signing key wasn’t stolen, it’s clear that Alice registered the photo on the blockchain.
None of this, however, tells you how the image was created. It might be a photo that Alice snapped with her own camera. Or Alice might have gotten the image from Bob, who Photoshopped it. Or maybe Carol created it with a generative AI tool. In short, the blockchain tells you nothing about whether aliens were touring Washington, D.C.—unless you already trust Alice to begin with.
Some cameras can digitally sign photos to authenticate them (assuming their sensors can’t be fooled, which is a big if), but this isn’t blockchain technology.
Narrative #2: Blockchain can bring privacy to AI
Model training is a data-hungry operation. The bigger and better the training data set, the better the resulting model. For many applications, training on private user data is essential. For instance, creating a good machine-learning model to diagnose medical conditions requires data from a population of real patients. Handling such highly sensitive data securely is a challenge. Some are trumpeting blockchain technologies as a solution.
Blockchains, however, are designed for transparency — a property at odds with confidentiality.
Proponents point to privacy-enhancing technologies advanced by the blockchain industry to address this tension — especially zero-knowledge proofs. Zero-knowledge proofs, however, don’t solve the problem of privacy in AI model training. That’s because a zero-knowledge proof doesn’t conceal secrets from whoever is constructing the proof. Zero-knowledge proofs are helpful if I want to conceal my transaction data from you. But they don’t enable me to compute privately over your data.
There are other, more relevant cryptographic and security tools with esoteric names, including fully homomorphic encryption (FHE), secure multiparty computation (MPC) and secure enclaves. These can in principle support privacy-preserving AI (specifically, “federated learning”). Each has important caveats, though. And claiming them as blockchain-specific technologies would be a stretch.
Narrative #3: Blockchains can empower AI bots with money — and that’s a good thing
Jeremy Allaire, CEO of Circle, has noted that bots are already performing transactions using cryptocurrency and tweeted that “AI and Blockchains are made for each other.” This is true in the sense that cryptocurrency is a good match for the capabilities of AI agents. But it’s also worrisome.
Many people fret about AI agents escaping human control. Classic nightmare scenarios involve autonomous vehicles killing people or AI-powered autonomous weapons going rogue. But there’s another vector of escape: The financial system. Money equals power. Give that power to an AI agent and it can do real damage.
This problem is the topic of a research paper that I co-authored in 2015/6. My colleagues and I examined the possibility of smart contracts, programs that autonomously intermediate transactions on Ethereum, being used to facilitate crime. Using the techniques in that paper and a blockchain oracle system with access to LLMs (Large Language Models) such as ChatGPT, bad actors could in principle launch “rogue” smart contracts that automatically pay bounties for committing serious crimes.
Happily, rogue smart contracts of this kind aren’t yet possible in today’s blockchains — but the blockchain industry and crypto enthusiasts will need to take AI safety seriously as a future concern. They will need to consider mitigations, such as community-driven interventions or guardrails in oracles to help enforce AI safety.
The integration of blockchains and AI does hold clear promise. AI may add unprecedented flexibility to blockchain systems by creating natural language interfaces to them. Blockchains may provide new financial and transparency frameworks for model training and data sourcing and put the power of AI in the hands of communities, not just enterprises.
It’s still early days, though, and as we wax lyrical about AI and blockchain as an enticing mix of buzzwords and technologies, we need to really think — and see — things through.
Source: Blockworks
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Blockchain
Glidelogic Corp. Announces Revolutionary AI-Generated Content Copyright Protection Solution
Blockchain
Ethereum ETFs Aren’t Blockchain But Is A Revolutionary Tech: Top 6 Amazing Reasons To Invest In Them
The financial landscape is rapidly evolving, with the integration of blockchain technology and cryptocurrencies becoming more prominent. Among these, Ethereum ETFs (Exchange-Traded Funds) have emerged as a significant investment vehicle, offering exposure to the Ethereum blockchain’s native cryptocurrency, Ether (ETH), without requiring direct ownership. However, it’s crucial to understand that Ethereum ETFs are distinct from the blockchain itself and serve different purposes in the investment world.
Understanding Ethereum and ETFs
Ethereum: A decentralized platform that enables the creation and execution of smart contracts and decentralized applications (dApps). It operates using its cryptocurrency, Ether (ETH), which fuels the network.
ETF (Exchange-Traded Fund): A type of investment fund that holds a collection of assets and is traded on stock exchanges. ETFs can include various asset classes, such as stocks, commodities, or bonds.
Ethereum ETFs: The Intersection of Traditional Finance and Cryptocurrency
An Ethereum ETF provides a way for investors to gain exposure to the price movements of Ether without directly purchasing the cryptocurrency. This is achieved through an ETF structure, where the fund holds assets linked to the value of Ether, and investors can buy shares of the ETF on traditional stock exchanges.
Key Features of Ethereum ETFs:
- Indirect Exposure: Investors gain exposure to Ether’s price changes without needing to manage or store the cryptocurrency themselves.
- Regulatory Compliance: Unlike the relatively unregulated cryptocurrency market, ETFs operate under the oversight of financial regulators, offering a layer of investor protection.
- Accessibility: Ethereum ETFs are available through traditional brokerage platforms, making them accessible to a broader range of investors.
Why Invest in an Ethereum ETF?
- Diversification: Including an Ethereum ETF in a portfolio can provide exposure to the cryptocurrency market, potentially enhancing diversification beyond traditional assets.
- Convenience and Familiarity: ETFs are a familiar investment product, simplifying the process of investing in cryptocurrencies.
- Professional Management: ETF managers handle the investment decisions, including the buying and selling of assets, which can be advantageous for those less familiar with the cryptocurrency space.
- Regulatory Oversight: ETFs are subject to regulatory scrutiny, potentially offering more safety and transparency compared to direct cryptocurrency investments.
- Potential for Growth: As the cryptocurrency market grows, ETFs linked to assets like Ether may benefit from rising prices.
Key Differences Between Ethereum and Ethereum ETFs
While both are related to the Ethereum blockchain, Ethereum itself and Ethereum ETFs represent different forms of investment:
- Ethereum (ETH):
- Direct ownership of the cryptocurrency.
- Full exposure to Ethereum’s features, including staking and network participation.
- Traded on cryptocurrency exchanges.
- Highly volatile and largely unregulated.
- Ethereum ETF:
- Indirect exposure through shares representing Ether’s value.
- Traded on traditional stock exchanges under regulatory oversight.
- Offers a more stable and familiar investment structure.
- Typically lower volatility compared to direct cryptocurrency ownership.
Future Considerations for Ethereum ETFs
The approval and launch of Ethereum ETFs mark a significant milestone in bringing cryptocurrencies closer to mainstream finance. They offer a convenient and regulated means for investors to gain exposure to the growing digital assets market. However, they also come with limitations, such as not allowing direct participation in the Ethereum ecosystem’s innovations, like dApps and smart contracts.
As the market evolves, we may see more sophisticated financial products that better capture the full potential of the Ethereum ecosystem. For now, Ethereum ETFs provide a balanced option for those interested in cryptocurrency exposure within the framework of traditional finance.
In conclusion, while Ethereum ETFs offer a gateway into the world of digital assets, they should be viewed as complementary to, rather than a replacement for, direct investment in the underlying blockchain technologies. Investors should carefully consider their investment goals, risk tolerance, and the unique attributes of both Ethereum and Ethereum ETFs when making investment decisions.
Source: blockchainmagazine.net
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Nexo, a leading institution in the digital assets industry, has reinforced its commitment to data security by renewing its SOC 2 Type 2 audit and attaining a new SOC 3 Type 2 assessment without any exceptions. This rigorous audit process, conducted by A-LIGN, a respected independent auditor specializing in security compliance, confirms Nexo’s adherence to stringent Trust Service Criteria for Security and Confidentiality.
Key Achievements and Certifications
- SOC 2 and SOC 3 Compliance:
- SOC 2 Type 2: This audit evaluates and reports on the effectiveness of an organization’s controls over data security, particularly focusing on the confidentiality, integrity, and availability of systems and data.
- SOC 3 Type 2: This public-facing report provides a summary of SOC 2 findings, offering assurance to customers and stakeholders about the robustness of Nexo’s data security practices.
- Additional Trust Service Criteria:
- Nexo expanded the scope of these audits to include Confidentiality, showcasing a deep commitment to protecting user data.
- Security Certifications:
- The company also adheres to the CCSS Level 3 Cryptocurrency Security Standard, and holds ISO 27001, ISO 27017, and ISO 27018 certifications, awarded by RINA. These certifications are benchmarks for security management and data privacy.
- CSA STAR Level 1 Certification:
- This certification demonstrates Nexo’s adherence to best practices in cloud security, further solidifying its position as a trusted partner in the digital assets sector.
Impact on Customers and Industry Standards
Nexo’s rigorous approach to data protection and compliance sets a high standard in the digital assets industry. By achieving these certifications, Nexo provides its over 7 million users across more than 200 jurisdictions with confidence in the security of their data. These achievements not only emphasize the company’s dedication to maintaining top-tier security standards but also highlight its proactive stance in fostering trust and transparency in digital asset management.
Nexo’s Broader Mission
As a premier institution for digital assets, Nexo offers a comprehensive suite of services, including advanced trading solutions, liquidity aggregation, and tax-efficient credit lines backed by digital assets. Since its inception, the company has processed over $130 billion, showcasing its significant impact and reliability in the global market.
In summary, Nexo’s successful completion of SOC 2 and SOC 3 audits, along with its comprehensive suite of certifications, underscores its commitment to the highest standards of data security and operational integrity. This dedication positions Nexo as a leader in the digital assets space, offering unparalleled security and peace of mind to its users.
Source: blockchainreporter.net
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