I have written extensively about artificial intelligence (AI), noting its far-reaching tentacles, diverse applications, and ubiquities. But there’s a companion platform that has been raging for a few years now, and that platform is Blockchain.
Unless you’re a tech geek, you probably have a cursory at best understanding, having heard of it in news reports. The best way to put Blockchain into context is to understand its most popular application: Bitcoin. This cryptocurrency has caused volatile swings in the financial markets, has caused the biggest banks and lending institutions to take notice, even throwing millions in R&D to bone up on the technology.
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What’s important to understand is the relationship between Bitcoin (and other lesser known cryptocurrencies) and Blockchain. Bitcoin runs on blockchain and currently needs blockchain to function.
As such, the marriage between AI and Blockchain is a natural one, although not necessary. The appeal, however, is the security features that blockchain promises, and the egalitarian way in which information is stored and distributed.
The Israeli Connection
Israeli startups are at the forefront of both of these sectors, receiving notable attention and investments from global players which are further propelling Israeli development in these industries.
As recently reported in NoCamels.com:
In Israel, the average investment per deal in AI grew five times in value, from $2 million in 2016 to $10.2 million in 2017. Subsequently, the growth in this sector is reflected in the overall investment numbers for AI in Israel, with the market growing from $55 million in 2016 to $472 million in 2017, according to the Geektime Annual Report 2017: Startups and venture capital in Israel, published in January.
A major setback.
For a few years now, financial institutions have been experimenting with Blockchain for its “very strong” security features. Not so fast, however. What was lost by most was FPI special investigator Robert Mueller’s recent charges filed against senior Russian military leaders, many of whom take their orders directly from Vladimir Putin. What the filing showed, in great detail, is how Mueller’s team was able to deconstruct the way in which the Russians used Bitcoin to pay for everything from website hosting, domain registration, and even paying for Facebook ads. According to many Bitcoin experts, the advantage of Bitcoin/Blockchain is its ability to remain anonymous throughout the transaction process. And while we still don’t know how Mueller’s team was able to attribute a Bitcoin account directly to its true owner is proof positive that the technology is vulnerable.
Netting it out.
What this means is simple. Blockchain may have some appealing features for the marketplace, but security isn’t one of them. As such, the fledgling marriage between AI and Blockchain may be short-lived and was never a necessary one.
Diane Israel is a Chicago native and long-time supporter and advocate of the American Israel Public Affairs Committee (AIPAC). She is also famous for her culinary recipes. Diane can be reached at Diane@IsraelOnIsrael.com