Web3 Promised to Decentralize the Internet—AI Might Actually Make It Happen

PwC estimates that by 2030, AI will contribute a staggering $15.7 trillion to the global economy, resulting in a 14% increase in global GDP. Web3 seeks to democratize the internet by providing users control over their data. Artificial Intelligence and Web3 are coming together to transform how we transact globally and reshape our world.

With an AI and Web3 driven digital and financial ecosystem anyone with internet access has the ability to invest in digital assets, transact across boarders and get loans. For many of the world’s unbanked population this will finally level the financial playing field.

Major crypto and DeFi industry leaders have put their full support behind Web3 as a means of global financial inclusion. Binance CEO Richard Teng explains the company’s vision, "We are committed to promoting the adoption of Web3 and blockchain technology to foster financial inclusion and reduce transaction costs, while working closely with regulators to establish a globally harmonized regulatory framework that balances innovation with consumer protection."

What are Web3 and AI?

Web3 is the third generation of the internet that moves away from the monolithic tech giants and centralized servers of the Web2 era. The web was meant to democratize the world, and instead, Web2 created all-powerful tech giants that were more powerful than governments. It replaced one kind of authoritarianism with another. Web3 is different.

Based on blockchain technology, Web3 is built on a decentralized system that relies far less on authority and trust. Blockchain technology allows us to tokenize goods, services, and processes and control them all with smart contracts that take human oversight and inefficiency out of the equation. It’s a faster, simpler, and more transparent way of doing business.

Artificial Intelligence is a system or machine designed to think and make decisions, and increasingly employs machine learning, natural language processing, and computer vision.  AI can automate complex tasks, improve efficiency and ultimately promises to streamline many of the Web3 driven transactions.

AI-Powered Smart Contracts

On the Ethereum and Solana blockchain, among others, smart contracts are built into the fiber of the code that allows them to execute agreements when certain terms and conditions are met. That can be as simple as releasing a payment for delivery of goods, or it can be as complex as a series of thousands of checkpoints and deliveries in a global supply chain.

Adding AI to the mix means that smart contracts can evolve to deal with external changes, too, all while respecting the integrity of the blockchain structure. Intelligent contracts and dApps will open up new doors, and we’re seeing the early stages of this with AI-enhanced DeFi platforms that can adjust loan offers, essentially in real-time, based on disparate collateral.

Decentralized AI Networks

Who controls the AI? This has been a big question lately as we have come to grasp the sheer power of AI tech. Right now, the old problem persists, and one of the most powerful technologies we have ever seen is held in centralized servers by increasingly powerful individuals and businesses.

Decentralized AI, which uses blockchain to distribute and process technology without a central authority, could be the answer. This approach ensures data privacy and that AI technology is available to all. That could be one of Web3’s fundamental gifts to the world.

Enhancing Blockchain Security

Blockchain technology is essentially more secure than Web2 tech, thanks to its decentralized nature. However, too many high-profile breaches still result in catastrophic losses for companies and lingering doubts about the mass adoption of blockchain tech.

AI can work as a guard dog for the blockchain, sniffing out anomalies and constantly checking for weaknesses and threats. The systems will get better and better at spotting red flags and fraudulent activity, which will cut the hacks and help the wider world get comfortable with decentralized systems. Projects like Chainalysis and CipherTrace are leading the charge for improved blockchain security.

Predictive Analytics

We think we know about predictive analytics, but we haven’t seen anything yet. In hours, AI can process a lifetime’s worth of data and spot near-invisible patterns that could go on to change everything from medicine to stock trading. The combination of blockchain and AI is the key, as laying outpatient records, photos, and other data on the blockchain can preserve individual confidentiality while shining a light on potential cures and treatments for diseases.

The world of crypto and stock trading is changing radically, too, as the likes of Numerai and Covalent leverage AI to provide constantly evolving trading strategies and insights. Again, with AI evaluating millions, even billions of trades on the blockchain, new triggers and patterns are changing the face of investment.

Nagging Doubts With AI and the Blockchain

The benefits of AI and blockchain working together are just too big to pass up, and they are already happening. There are, however, some lingering concerns about giving the computers the reins.

Data privacy is an ongoing issue and a legacy of the Web2 era, where data breaches, regular ID checks, and constant privacy policies became the norm. Web3 has most of the answers to this already, but there are concerns about how AI will respect user privacy while accessing decentralized data.

Scalability is another real concern. The Ethereum blockchain is ingenious, but it suffers from congestion, variable fees, and excessive energy consumption. AI could produce all the solutions to those problems with tiny efficiencies at every step of the process, or simply ramp up the power demands and issues.

Finally, regulation is always a thorny subject, and finding a set of clearly defined rules and laws is an arduous task. There are so many unknowns with AI and the blockchain that this could be a critical step if we are to avoid clipping this tech’s wings.

The Future of AI in Web3

We have barely scratched the surface of these technical advancements, and the true potential of their combined might will take time to even comprehend. AI and the blockchain can change the world on their own. Together, they could reshape it entirely.