Even after the use of credit or debit cards have become commonplace, we still haven’t mitigated the threat of credit card theft. A lost card or stolen pin can result in our savings being cleared from our accounts if we’re not quick enough to catch it. In the same way, making purchases online comes with its share of security concerns, as one can become the victim of identity theft or have his data stolen from the vendor.
The use of blockchain technology for recording the transactions of digital payments has emerged as perhaps the safest and most transparent way to send money. The whole community of users can become active in verifying transactions, and there is no third party that has the power to interfere with dubious actions. What might be even more significant is the fact that blockchains have recently begun utilizing artificial intelligence to make them even more secure.
CEO of Velas and Coinpayments Alex Alexandrov commented that “the crypto space has changed the game in a lot of ways, but it still has a number of problems. AI is the answer to many of these existing issues.”
What follows are some of the ways in which the use of AI has improved the security of cryptocurrencies.
Human Dependencies Are Removed
Many forms of artificial intelligence utilize self-learning neural networks that help the platform run with maximum efficiency. This ultimately creates a fault-tolerant system in which a single error can be automatically corrected and does not have the capacity to interrupt normal processing.
In addition, by removing the need for human input into the system, you prevent an individual from being able to implement self-serving protocols. It leaves open the possibility of manipulating outcomes. Nonetheless, the concern of artificial intelligence is maximum efficiency.
The Nothing-at-Stake Problem Is Mitigated
There are several inherent issues to blockchain technology that AI has successfully been able to address. One of these is the “Nothing-at-Stake” problem that arises from the fact that users are required to verify the transactions within a “block”—the unit of information within a blockchain.
Initially, there was no incentive for users to correctly verify the information, opening the door for self-serving behavior. However, thanks to artificial intelligence, various types of reward systems have been efficiently established to encourage blockchain users to participate correctly in the process of verifying blocks.
Double Spending Is Prevented
Like with paper money, cryptocurrencies can be counterfeited—or in blockchain terms, double spent. Nonetheless, AI is being used by several companies to help verify a blockchain’s authenticity and prevent this from occurring.
Velas, for example, applies an artificial intelligence protocol named “Epoch” that provides additional security by examining the blocks and regulating the conditions within which a new block is added to the blockchain. This effectively cuts down any possibility of double spending, granting assurance to the blockchain users that their money is protected.
When making digital payments, we want to be sure that our money is safe. The invention of the blockchain is changing the way we transfer funds, making it transparent, democratic, and more accessible. The many advances in artificial intelligence and the ways it is being applied to blockchains is now ensuring that we can send this money with the benefit of the highest security.