The dawn of Web3 drives a transformative era for the internet, promising a secure and user-empowered online experience. However, blockchain’s technical complexities present a formidable barrier to widespread adoption.
Not only that, but crypto’s complexity may be partly responsible for some of the major meltdowns faced by the ecosystem in recent years, with FTX’s collapse notable among them. John Wang’s recent post on X (formerly Twitter) described the gravity of the aftermath and the serious technical hurdles faced by the jurors on that case, stating, “Seeing the jury made me realize how far we have to go in educating and onboarding normal individuals. Blockchain UX is still a joke.”
Enter Artificial Intelligence (AI)—the technological linchpin poised to demystify Web3 for the everyday user and bridge the gap between innovation and usability.
The Complexity of Web3
Web3 represents a leap towards an internet where users control their data, identities, and transactions through blockchain technology. Despite its revolutionary potential, the inherent complexity of understanding and interacting with Web3 platforms has limited its appeal to a broader audience. When users are not empowered to understand these technologies themselves, it can also lead to situations where they place their trust in institutions, which, in the example of FTX, can have catastrophic results. The technical nuances of managing digital wallets, engaging with smart contracts, and navigating dApps can be daunting for the uninitiated, creating a rift between Web3's potential and its practical adoption.
Simplifying Smart Contracts with AI
Smart contracts are self-executing contracts with the terms of the agreement directly written into lines of code. Integral to blockchain technology, they automatically enforce and execute the terms of a contract when predetermined conditions are met, without the need for intermediaries. This makes transactions not only more efficient but also transparent and tamper-proof, leveraging the permissionless and secure nature of blockchain. Smart contracts are a cornerstone of many blockchain applications, enabling trustless agreements and automated transactions that can redefine industries, from finance to supply chain management.
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AI, with its vast capabilities in natural language processing (NLP) and machine learning (ML), emerges as a beacon of hope in this landscape. By integrating AI technologies into Web3 platforms, the user experience can be dramatically transformed to emphasize simplicity, intuition, and accessibility.
An AI-driven Natural Language Processing (NLP) model can interpret and execute complex smart contract protocols through simple, conversational language, allowing users to engage with dApps without needing a deep understanding of the underlying code.
"AI-driven NLP models may be able to make complex smart contracts human-readable to the masses. However, with any AI system, we must remember the room for error and hallucination in the systems we build. If we do lean on AI to interpret blockchain systems we'll need to pay extra attention to adopting checks and balances that can keep our systems safe and fair in the long term,” commented Maika Isogawa, founder and CEO of Webacy.
A More Usable Interface
Many users struggle with the complexities of web3. Machine learning algorithms can analyze user behavior to personalize their experience, tailor recommendations and automate transactions based on individual preferences and patterns.
Several companies are pioneering the integration of machine learning algorithms to enhance the user experience in Web3, aiming to simplify its complexities and tailor services to individual user preferences. These firms are addressing the dual challenge of leveraging smart contracts within blockchain platforms while making their interfaces more intuitive and user-friendly through AI-driven personalization.
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While Brave is primarily known for its privacy-focused browser, Brave ventured into the Web3 space with features such as Brave Rewards and the Basic Attention Token that integrate blockchain technology for advertising, content creators, and users. It uses machine learning to personalize the user experience without compromising privacy, offering an example of how Web3 applications can tailor experiences in a user-centric manner.
Brian Bondy, CTO and co-founder of Brave, told me, "Brave’s approach for every product we build is to put users in charge of their experience and to integrate privacy by default. We have been using machine learning for years in our blockchain-based advertising platform in order to match ads with users while preserving their privacy. Our aim is to defend user data at the edge, in users’ devices, and ultimately to connect those devices via cryptographic protocols to blockchain nodes and Web3 servers that do not collect data.”
Fraud Detection
Another critical area where AI can significantly aid Web3 in achieving mass adoption is in enhancing security and fraud detection. As Web3 platforms grow in popularity, they become more attractive targets for malicious activities.
AI can help mitigate these risks by analyzing patterns, detecting anomalies that may indicate fraudulent activity, and enhancing the overall security infrastructure of blockchain networks. By leveraging AI's predictive capabilities, Web3 platforms can proactively identify and respond to security threats, ensuring a safer ecosystem for users and fostering greater trust in blockchain technology.
Quantstamp leverages AI in its mission to secure crypto applications. It provides security audits for smart contracts and blockchain networks, using AI algorithms to automatically scan and identify vulnerabilities. This proactive approach to security helps to safeguard the integrity of Web3 applications and protect them from exploits and hacks.
Chainalysis is known for its comprehensive blockchain data analysis tools, which governments, banks, and businesses use to detect fraudulent transactions and understand blockchain activity. By applying AI and machine learning to vast amounts of blockchain data, Chainalysis helps in identifying and preventing illegal activities across the Web3 ecosystem. This not only enhances security but also promotes regulatory compliance, making blockchain technology more palatable for mainstream adoption.
According to Pratima Arora, Chief Technology Officer of Chainalysis, “Our products have utilized a combination of machine learning and algorithms for years now. We see the potential of LLMs as an extension of this; that the efficiency and accessibility this technology can offer to customers is game-changing, helping them save time and get to results faster. However, we’re undertaking this work with a whole-of-company approach, to ensure it's done safely, responsibly, and with utmost consideration for unintended consequences.”
He continued with, “At Chainalysis, our mission is to build trust in blockchains by creating solutions for governments and the private sector to investigate bad actors, curb illicit activity, and understand the blockchain. As adoption of our solutions increases, compliance teams and government agencies are able to change the paradigm and proactively mitigate risk and find illicit actors. We see AI as a mechanism for how our products will be able to help our customers become even more proactive with how they manage risk, ultimately making them more effective at curbing illicit activity and staying ahead of criminals.”
By addressing security concerns with AI-driven solutions, these companies play a pivotal role in advancing the mass adoption of Web3 technologies, ensuring that trust and safety remain at the forefront of the crypto ecosystem.
Take for instance, POG Digital. POG Digital is the interoperable universal gaming ecosystem created by THE WORLD POG FEDERATION™, a beloved 90's game and collectibles brand. They have over 150 million individuals spanning 40 countries that are Poggers, who are collectors. In June, 2022, POG moved to placing their collections on-chain. Their CEO and founder, Kyler Frisbee,came from Google
As Kyler told me, “In 2017, a team I helped build at Unity earned an award from Forbes for a top 5 breakthrough in AI as we built AI game agents to play video games built on Unity. This technology was provided as a service to game developers for better understanding bottlenecks and pain points in gameplay. Places in games where players got stuck or had too much difficulty moving forward.”
He continued with how he is using this at POG, “We have expanded on this technology at POG and are excited to utilize AI Game Agents to both better understand our games as well as to identify cheating and fraudulent gameplay in which bots attempt to mimic human behavior. “
“This technology is critical for widespread adoption as we want our games to be accessible, engaging, and fair. And as we mix in web3 game assets and digital collectibles, the need for us to install the highest level of fraud detection within our gameplay is paramount. “
Impact on Widespread Adoption
The integration of AI into Web3 platforms is not just a technical enhancement; it's a paradigm shift toward making blockchain accessible to a wider audience. By simplifying the user experience and reducing the barrier to entry, AI has the potential to catalyze the mass adoption of cryptocurrencies.
Despite the promise, integrating AI with Web3 is not without its challenges. Issues of scalability, data privacy, and the development of standardized AI frameworks for blockchain applications must be addressed. Yet, as these challenges are overcome, the future of a user-friendly, AI-enhanced Web3 looks increasingly bright.
The Pivot
AI stands as a pivotal force in bridging the reality of today's complex Web3 technologies with the promise of a user-centric internet. As AI continues to evolve and integrate with Web3, the barriers that once hindered widespread adoption begin to crumble, paving the way for a future where the full potential of the web can be realized by everyone. The journey towards this future is just beginning, but the path is clear: together, AI and Web3 are reshaping the digital landscape into one that is more accessible, empowering, and inclusive for all.
