Artificial intelligence has grabbed headlines for over a year now with the breakout of ChatGPT, yet its application to blockchain technology is still somewhat unclear. As with any system, the quality of the data it’s built upon is paramount – the rule of garbage in garbage out applies – and factual certainty could be one of the first ways blockchain enhances AI, said Paul Brody, global blockchain leader at consultancy EY.

“The Internet is succumbing to what I feel is this exoflood of not quite garbage but not quite particularly good content. Just mountains and mountains and mountains of it,” Brody said to me in an interview. The sheer volume makes it difficult to discern what was written by an expert and what was written “by a fairly mediocre AI,” he said.

Blockchain technology has come a long way since Bitcoin was first deployed in 2009 – with a market value of $2 trillion -- but it’s still very early in its intersection with AI. More broadly, Brody is upbeat on the prospects for Ethereum and other chains as regulatory uncertainty diminishes and institutional money is close to having a green light to invest in and use the sector.  

The problem of a middling AI program that “regurgitates the conventional wisdom” is illustrated if you ask an AI to explain if private blockchain networks are a good idea, rather than using a public chain like Ethereum, Brody said.

“It’ll give you a synthesis of a bunch of press releases that are completely wrong,” he said. “There is no circumstance when a permissioned blockchain is a good idea.” Blockchains are good at attesting to a document’s authenticity, which could help improve the results of AI queries if the artificial intelligence program pulled only from blockchain-verified sources, Brody said.

Still, there’s a ways to go. “We’re really in the early stages” of AI meets blockchain, Brody said. “The answer is no one is doing this now.”

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Looking at the global blockchain industry, Brody is optimistic about Europe’s Markets in Crypto-Assets Regulation, or MiCA. “That basically provides a regulatory framework for all the crypto assets and digital assets structured in Europe,” he said. While the European Union isn’t the largest economic region in the world it still represents a huge step forward when taken together with regulatory advancements in the UK and Middle East.

“It’s still the world’s second-largest overall financial market and it’s really quite comprehensive,” Brody said about the EU region and MiCA. The stakes are high.  

“There’s a couple hundred trillion dollars in institutional finance and assets which has largely been barred from using the crypto environment, and all of that is gradually being onboarded,” Brody said. “People are finally opening up the floodgates.”

As firms work to create artificial intelligence systems with a blockchain element Brody sees a brighter future for digital assets in general.

“I’m optimistic on this on the financial side, but I don’t think AI is going to drive this,” he said. Another development to look out for next year (perhaps) is the number of EY clients that are building systems to handle secure private transactions on the public Ethereum network using zero-knowledge proofs, a way to verify a transaction without revealing any of its underlying details.

“That is a really big milestone because large enterprises simply will not use public blockchains without a strong comfort level in the privacy infrastructure,” Brody said.