Blockchain Technology and its Role in Reshaping AI's Data Challenges

Sep 18, 2023

Blockchain Technology and its Role in Reshaping AI's Data Challenges

Sep 18, 2023

Blockchain Technology and its Role in Reshaping AI's Data Challenges


The synergy between artificial intelligence (AI) and blockchain technology is undeniable. In this installment of my AI x Blockchain series, we delve deep into Decentralized Data Networks (DDNs) and how blockchain assists in resolving the data concerns AI faces.


Understanding AI's Dependence on Data:

The lifeblood of AI is data. The better and more substantial the data, the more accurate AI predictions become. Common data sources for AI include web scraping, databases, platforms like OpenML and Amazon Datasets, and marketplaces such as Snowflake & Axciom. After procuring this data, tasks like cleaning, labeling, and storing are just as vital to ensure its quality and relevance.



Hurdles in the AI Data Landscape:

A few challenges stand out when it comes to AI and data:

- The growth rate of public data stocks isn't keeping up with the demand. Forecasts suggest that by 2026, we might run out of high-quality language data.

- Quality remains a significant concern, with 53% of the stakeholders indicating a lack of quality data volume as a barrier to AI's growth.

- The financial implications are also daunting. Organizations allocate nearly 90% of their time and 58% of their budgets just on data collection and preparation.



The Promise of Blockchain:

Blockchain technology offers solutions by facilitating the creation of permissionless markets for data. This makes it possible for individuals to contribute valuable data and get rewarded (through tokens) in return, bolstering the data economy. One prime example of this in action is the Ocean Protocol.



Delving into Ocean Protocol:

Ocean Protocol brings several key features to the table:

- Privacy is paramount. With its Compute-to-Data mechanism, AI models can be trained without violating data privacy norms, staying compliant with GDPR.

- The introduction of veOCEAN tokens offers incentives, allowing users to signal dataset quality and receive rewards.

- The protocol enables the minting of datasets as NFTs, ensuring clear ownership, transparent revenue sharing, and trustless interactions.

- It also ensures data provenance, which helps in maintaining transparency and thwarting deepfakes.

- Cost reductions are apparent as direct transactions between data owners and consumers eliminate middlemen.

Unpacking Ocean's Value:

Ocean Protocol addresses multiple challenges in the AI data ecosystem. It not only curtails costs associated with data acquisition and sharing but also guarantees user privacy and promotes high-quality datasets.


Ocean's Performance Metrics:

However, when examining the Dune dashboard, it's evident that Ocean has seen a decline in paid data transactions and datasets post the Q4 2020 hype. With under 5 transactions and datasets being generated every month, Ocean hasn't scaled as one might expect, especially considering the AI boom and the expected 8% CAGR of the data market.


Pondering the Underwhelming Performance:

Several factors might be contributing to Ocean's tepid performance.

On the supply side, we have:

- Data brokers already serving data owners, making blockchain's inclusion seem redundant.

- Potential concerns around privacy, with certain proprietary data owners possibly seeing no real incentive to share.

- Confidential computing isn't a unique proposition to decentralized platforms.

On the demand side, issues arise with:

- A curation mechanism that doesn't necessarily guarantee top-tier datasets and an over-reliance on centralized brokers' reputations.

- A glaring lack of standardization which can lead to inconsistencies, especially when dealing with varied data sources.

Despite these challenges, Ocean Protocol underscores an important takeaway: the core issue lies in execution, not the foundational idea.


Improving Ocean:

To truly harness Ocean's potential, certain measures can be undertaken:

- Augmenting incentives to catalyze the formation of data DAOs.

- Introducing mechanisms like slashing to handle subpar datasets.

- Enhancing the user experience, such as by introducing simpler payment methods like credit card onramps.



The Future of Data Ownership:

A critical consideration moving forward is re-evaluating our understanding of data ownership. The ideal scenario is one where data sharing is encouraged, ushering in a democratized data value system.

In conclusion, leveraging blockchain's unique properties can pave the way for a stronger data economy, ultimately propelling AI's continued evolution.

Blockchain Technology and its Role in Reshaping AI's Data Challenges


The synergy between artificial intelligence (AI) and blockchain technology is undeniable. In this installment of my AI x Blockchain series, we delve deep into Decentralized Data Networks (DDNs) and how blockchain assists in resolving the data concerns AI faces.


Understanding AI's Dependence on Data:

The lifeblood of AI is data. The better and more substantial the data, the more accurate AI predictions become. Common data sources for AI include web scraping, databases, platforms like OpenML and Amazon Datasets, and marketplaces such as Snowflake & Axciom. After procuring this data, tasks like cleaning, labeling, and storing are just as vital to ensure its quality and relevance.



Hurdles in the AI Data Landscape:

A few challenges stand out when it comes to AI and data:

- The growth rate of public data stocks isn't keeping up with the demand. Forecasts suggest that by 2026, we might run out of high-quality language data.

- Quality remains a significant concern, with 53% of the stakeholders indicating a lack of quality data volume as a barrier to AI's growth.

- The financial implications are also daunting. Organizations allocate nearly 90% of their time and 58% of their budgets just on data collection and preparation.



The Promise of Blockchain:

Blockchain technology offers solutions by facilitating the creation of permissionless markets for data. This makes it possible for individuals to contribute valuable data and get rewarded (through tokens) in return, bolstering the data economy. One prime example of this in action is the Ocean Protocol.



Delving into Ocean Protocol:

Ocean Protocol brings several key features to the table:

- Privacy is paramount. With its Compute-to-Data mechanism, AI models can be trained without violating data privacy norms, staying compliant with GDPR.

- The introduction of veOCEAN tokens offers incentives, allowing users to signal dataset quality and receive rewards.

- The protocol enables the minting of datasets as NFTs, ensuring clear ownership, transparent revenue sharing, and trustless interactions.

- It also ensures data provenance, which helps in maintaining transparency and thwarting deepfakes.

- Cost reductions are apparent as direct transactions between data owners and consumers eliminate middlemen.

Unpacking Ocean's Value:

Ocean Protocol addresses multiple challenges in the AI data ecosystem. It not only curtails costs associated with data acquisition and sharing but also guarantees user privacy and promotes high-quality datasets.


Ocean's Performance Metrics:

However, when examining the Dune dashboard, it's evident that Ocean has seen a decline in paid data transactions and datasets post the Q4 2020 hype. With under 5 transactions and datasets being generated every month, Ocean hasn't scaled as one might expect, especially considering the AI boom and the expected 8% CAGR of the data market.


Pondering the Underwhelming Performance:

Several factors might be contributing to Ocean's tepid performance.

On the supply side, we have:

- Data brokers already serving data owners, making blockchain's inclusion seem redundant.

- Potential concerns around privacy, with certain proprietary data owners possibly seeing no real incentive to share.

- Confidential computing isn't a unique proposition to decentralized platforms.

On the demand side, issues arise with:

- A curation mechanism that doesn't necessarily guarantee top-tier datasets and an over-reliance on centralized brokers' reputations.

- A glaring lack of standardization which can lead to inconsistencies, especially when dealing with varied data sources.

Despite these challenges, Ocean Protocol underscores an important takeaway: the core issue lies in execution, not the foundational idea.


Improving Ocean:

To truly harness Ocean's potential, certain measures can be undertaken:

- Augmenting incentives to catalyze the formation of data DAOs.

- Introducing mechanisms like slashing to handle subpar datasets.

- Enhancing the user experience, such as by introducing simpler payment methods like credit card onramps.



The Future of Data Ownership:

A critical consideration moving forward is re-evaluating our understanding of data ownership. The ideal scenario is one where data sharing is encouraged, ushering in a democratized data value system.

In conclusion, leveraging blockchain's unique properties can pave the way for a stronger data economy, ultimately propelling AI's continued evolution.

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Loch, Inc. © 2023

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Loch, Inc. © 2023

The content made available on this web page and our mobile applications ("Platform") is for informational purposes only. You should not construe any such information or other material as financial advice in any way. All information provided on the Platform is provided on an as is and available basis, based on the data provided by the end user on the Platform. Nothing contained on our Platform constitutes a solicitation, recommendation, endorsement, or offer by us or any third-party service provider to buy or sell any securities or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction. All content on this Platform is information of a general nature and does not address the circumstances of any particular individual or entity. Nothing in the Platform constitutes financial advice, nor does any information on the Platform constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content on the platform before making any decisions based on such information. In exchange for using the Platform, you agree not to hold us, our affiliates, or any third-party service provider liable for any possible claim for damages arising from any decision you make based on information or other content made available to you through the Platform.

2261 Market Street,

San Francisco, CA 94114

Loch, Inc. © 2023

The content made available on this web page and our mobile applications ("Platform") is for informational purposes only. You should not construe any such information or other material as financial advice in any way. All information provided on the Platform is provided on an as is and available basis, based on the data provided by the end user on the Platform. Nothing contained on our Platform constitutes a solicitation, recommendation, endorsement, or offer by us or any third-party service provider to buy or sell any securities or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction. All content on this Platform is information of a general nature and does not address the circumstances of any particular individual or entity. Nothing in the Platform constitutes financial advice, nor does any information on the Platform constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content on the platform before making any decisions based on such information. In exchange for using the Platform, you agree not to hold us, our affiliates, or any third-party service provider liable for any possible claim for damages arising from any decision you make based on information or other content made available to you through the Platform.

2261 Market Street,

San Francisco, CA 94114