The seemingly unstoppable expansion of AI has created as many challenges for organizations as there are opportunities, with some of the most complex pertaining to issues of security and privacy and the protection of sensitive data.
Companies that want to leverage AI to increase their productivity and boost their competitiveness must be careful to avoid the legal pitfalls that will surely arise if they throw caution to the wind and adopt the technology without considering the downsides.
That’s why there’s a lot of interest in the idea of “decentralized AI”, which sits at the intersection of blockchain and AI models. Decentralized AI models are different to services like ChatGPT, and often require AI crypto tokens to access them.
What Is Decentralized AI?
Unlike traditional AI offerings, decentralized AI combines powerful large language models and AI agents with the decentralized ledger technology that underpins cryptocurrencies such as Bitcoin and Ethereum. Proponents of decentralized AI argue that it provides substantial advantages over centralized offerings such as ChatGPT, Google’s Gemini, Anthropic’s Claude, and even Meta Platform’s open-source Llama models.
For one thing, the lack of centralization means greater transparency. Decentralized AI models are completely open-source, which means anyone can examine the underlying code and the data used to train them to figure out how they work and generate responses. This is in stark contrast to centralized LLMs, which are often said to be a “black box”, with little to no inkling of how they work.
Another major plus is the decentralization of control. These models are owned by their users, who make all of the decisions via democratic governance processes, ensuring that no one can exert disproportionate control over the technology or restrict access in any way.
They are also much more inclusive. Because they’re open and controlled by everyone, developers, users, and even AI agents can collaborate, evolving and improving these models, with the benefits being shared with everyone else.
Leading The Charge
One of the most notable projects in the decentralized AI industry is SingularityNET, which claims to have built up the largest open-source AI research network in the world. It’s focused on building up an entire ecosystem of decentralized AI models and is one of the founders of the Artificial Superintelligence (ASI) Alliance, which is working to create a shared artificial general intelligence system that’s as creative as any human is.
Fetch.ai is also a key partner in the ASI Alliance, having built a decentralized marketplace through which anyone can create and sell access to autonomous AI agents. Users can search through the marketplace to discover different low-cost agents, which can then be adapted to power different kinds of AI applications.
Developers can create these AI agents using a platform such as Giza Protocol, which has built an architectural foundation that transforms complex interactions into standardized operations secured with smart contracts and cryptoeconomic guarantees. To showcase the power of its AI agent infrastructure, Giza developed an autonomous DeFi investing agent called ARMA, which is programmed to analyze crypto asset markets around the clock and execute complex yield-farming strategies on behalf of investors.
The ARMA agent, which controls more than $980,000 in assets, is a telling example of how AI can help improve blockchain. The model helps investors trying to deal with the overwhelming complexity of a growing DeFi world that’s made up of hundreds of protocols and thousands of tokens. It analyzes the broader DeFi market in comprehensive detail and in real-time, so it can adapt its strategies based on changing conditions.
Creating Synergies
Decentralized AI projects are extremely promising and have attracted a lot of interest, as they provide a solution to some of the most pressing problems associated with proprietary AI models. Perhaps the most compelling advantage is the way decentralized AI bridges the divide between the “haves” and the “have-nots” by making powerful AI capabilities available to everyone.
Another compelling benefit is the way it defuses tensions over copyright. OpenAI, due to its status as the flagbearer of centralized AI models, has become embroiled in numerous legal debates over the way it scrapes the public internet for data, including copyrighted news reports, intellectual property such as author’s works and videos, and songs posted on sites like YouTube.
Decentralized AI platforms can help AI to get around these issues through the use of blockchain, which can provide a verifiable record of which data sources an AI model uses to generate a response to a user’s prompt. Using this, it’s possible to create mechanisms that can pay rewards to creators when their content is used by AI.
Sahara AI is noteworthy for building such a system. Its platform enables anyone to create or collaborate on the creation of AI training datasets, where users can compile the data, label it, provide verification services, and more. These contributors will then be rewarded with small amounts of crypto anytime an AI model taps into one of the databases they helped to create.
What’s Holding It Back?
As promising as decentralized AI is, there’s also a need to recognize that it brings up some of its own challenges, particularly with respect to governance and regulation.
Whereas platforms like ChatGPT fall under the control of a centralized company, decentralized AI models operate in a regulatory grey zone, as there is no governing organization that can be held accountable should they misbehave.
Under existing laws in the U.S, it is stated that a “controller” is held responsible for issues relating to compliance with data protection laws. In the case of ChatGPT, that means OpenAI is held responsible. But in decentralized AI, there is no clear controller, and so these models don’t fit squarely with existing legal frameworks and standards.
There are technical challenges too. For instance, the scalability of blockchain networks can potentially hinder large-scale deployments, as these networks often struggle to process massive transaction volumes. The inability to scale could cause serious performance bottlenecks that impact the efficiency of decentralized AI models.
It remains to be seen if the decentralized AI industry will be able to solve these challenges quickly enough to close the gap that exists between it and centralized AI. For now, centralized AI models are out in front, but if decentralized AI projects can solve the issues relating to regulations and performance, they can potentially alter the balance of power within the wider AI industry.
A More Hopeful Future
The synergies between blockchain and AI make for a compelling argument in favor of decentralized AI. Blockchain makes it possible to address concerns around AI privacy and security, and can help to solve headaches around copyright. At the same time, it can help to ensure that AI technology remains accessible and its benefits are available to all.
AI meanwhile, can help democratize access to DeFi. By utilizing advanced AI models such as ARMA, it becomes possible for any DeFi investor to navigate the increasing complexity of digital asset markets and employ sophisticated strategies to maximize profits.
For now, it’s not yet clear if decentralized AI has enough traction to catch up with centralized AI and truly rival its capabilities. But the potential benefits are so incredibly tantalizing that we desperately hope it does.
This publication is sponsored. Coindoo does not endorse or assume responsibility for the content, accuracy, quality, advertising, products, or any other materials on this page. Readers are encouraged to conduct their own research before engaging in any cryptocurrency-related actions. Coindoo will not be liable, directly or indirectly, for any damages or losses resulting from the use of or reliance on any content, goods, or services mentioned. Always do your own research!
Kosta Gushterov
Reporter at Coindoo
Kosta has been a part of the team since 2021 and has solidified his position with a thirst for knowledge, incredible dedication to his work and a “detective-like” mindset. He not only covers a wide range of trending topics, he also creates reviews, PR articles and educational content. His work has also been referenced by other news outlets.
Source: https://coindoo.com/decentralization-the-key-to-democratizing-ai-and-defi-to-benefit-us-all/