Book Image

Practical Artificial Intelligence and Blockchain

By : Ganesh Prasad Kumble
Book Image

Practical Artificial Intelligence and Blockchain

By: Ganesh Prasad Kumble

Overview of this book

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.
Table of Contents (15 chapters)
Section 1: Overview of Blockchain Technology
Section 2: Blockchain and Artificial Intelligence
Section 3: Developing Blockchain Products

Introduction to Ethereum

Ethereum is a public blockchain that was designed by Vitalik Buterin in 2013 as an enhancement to the incumbent Bitcoin blockchain, by including transaction-based state management with business logic scripting using a special-purpose programming language and a virtual machine called the Ethereum Virtual Machine (EVM).

The following diagram outlines the basics of block creation in Ethereum:

Fig 1.2: Block creation in Ethereum

In the next section, we will look at a brief description of Ethereum.

A brief overview of Ethereum

This section offers historical background on the Ethereum cryptocurrency, along with factual information on its current state as well as the technical and architectural limitations perceived by experts in the market:

  • Motivation: The main motivation behind Ethereum was to support building decentralized applications on the powerful medium of blockchain. Unable to convince the Bitcoin community of the need for a scripting language, Vitalik and a like-minded group of people created Ethereum.
  • Facts: The project was open sourced with an initial release date of July 30, 2015. The research and development upgrades to the Ethereum network is managed under the Ethereum Foundation, financially supported by the initial crowd sale of the Ether (ETH) token from July to August 2014. Around 105 million ETH has been minted so far. Ethereum has one major fork called Ethereum Classic (the original Ethereum blockchain that denied the DAO hard fork and retained the original unaltered state of the Ethereum network). At the time of writing this book, each ETH is valued at around USD 156.00. The Ethereum blockchain network also incentivizes the validating nodes by charging users who make transactions on DApps or transfer ETH with a small fee, which is awarded to the winning block maker. The rules of creating blocks and the acceptance of blocks are specified by consensus algorithms called PoW or Proof of Stake (PoS). We will explore PoW and PoS in more detail in the upcoming sections of this chapter.
  • Criticism: The Ethereum community has had to face some of the earliest criticism due to the hard-fork decision taken by the team, thereby contradicting some of the ideology and values of blockchain, such as immutability and immunity from human political dynamics. The network was later criticized and heavily scrutinized by the regulatory authorities due to the alleged Ponzi schemes offered by the Initial Coin Offerings (ICOs) without a stable product or service.
A hard fork is defined as a radical change made to the protocol, thereby rendering some of the previous blocks and its transactions invalid.

With this basic understanding of Ethereum, let's move on to look at the Hyperledger platform.