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Blockchain technology can provide a range of industries with decentralized and immutable ledger systems, which enhance transparency, security, and efficiency. It can simplify supply chain management, track financial transactions efficiently, and transfer data securely across fragmented systems such as healthcare networks.

One of the key sectors where the technology has made significant inroads is in recording financial transactions. But with the increasing complexity of blockchain ecosystems and the need for regulatory compliance, auditing these transactions has become a challenge.

One potential solution is using explainable artificial intelligence (XAI), which can handle and analyze large volumes of data to help auditors and regulators gain insights into complex transaction histories and verify compliance. However, this raises ethical concerns, as blockchains are designed to protect users anonymity.

Can XAI be implemented in ethical ways? What would this mean for the industry?

Explainable AI is a form of artificial intelligence (AI) and machine learning (ML) designed to develop models that explain the decisions they make. This allows users to understand how and why an algorithm makes decisions, which can help them to make better decisions and increase their confidence in the model. It can also help to identify mistakes and make improvements.

This is particularly important in industries such as healthcare and finance, where it is critical to ensure that decisions are not based on incorrect data or bias. Organizations need to provide transparent explanations of how decisions are made to demonstrate that they are committed to ethical and responsible data management.

When AI and ML are used in auditing procedures, audit evidence standards require auditors to provide appropriate and sufficient evidence to support their conclusions.

By integrating XAI into the auditing process, auditors and regulators can gain deeper insights into complex transaction histories and ensure they comply with regulatory requirements.

Blockchains distributed ledger approach facilitates secure transactions and data tracking. Transactions are processed across a decentralized peer-to-peer network of nodes, and the data is stored and shared cryptographicallyin a way that can ensure it is not manipulated or misused.

Traditional financial audits are relatively straightforward for auditors, as they can quickly gain access to centralized records and databases they need to analyze and verify transactions. However, as a blockchain is not controlled by a centralized entity, it can be difficult for auditors to access information. Additionally, transactions processed on a blockchain can be highly complex, involving multiple senders or recipients and the execution of smart contracts.

Blockchains provide transparency, as the details of each transaction are stored publicly and visible to any network users. This creates a challenge for auditors that need to verify transactions while protecting sensitive data.

A lack of standardization across the blockchain industry for reporting and documentation also presents a challenge. Each blockchain can have its own unique protocol and data structure, making it difficult for auditors to access and analyze transaction data consistently.

The introduction of explainable AI to blockchain technology can change the automation of auditing and compliance.

Blockchain technology provides a secure means of tracking transactions and data in an immutable and tamper-proof system, while XAI can help to automate auditing with efficiency and transparency, bringing tools such as:

ML algorithms can process large volumes of blockchain data in minutes. This is useful for complex transactions and records, where trust is crucial. It also reduces the time and effort required to conduct audits while increasing detection and enhancing accuracy.

XAI can provide auditors with detailed explanations so that they understand why a transaction was flagged as non-compliant or irregular. Auditors can validate the algorithms conclusions to ensure no important or relevant considerations were overlooked.

XAI algorithms can analyze blockchain transactions to identify suspicious activity, anomalies, and potential fraud and then explain how the model detected them. This provides a transparent and accountable approach to fraud detection, which can help organizations to avoid financial losses and improve their compliance systems.

XAI can identify potential system errors and alert users before any damage occurs. This can help to reduce the risk of malicious attacks.

Auditors can use blockchain technology to store and share audit trail records in a secure environment, ensuring they remain accurate and any changes can be traced.

The intersection of XAI and blockchain has potential in several industries. It can be used in healthcare to help providers share patient data securely and understand medical decisions. It has applications in finance to help financial institutions trace transactions and provide secure services to clients.

While there are clear advantages, implementing XAI for tracking blockchain transactions raises important ethical questions, particularly in the context of blockchains core principles of decentralization and anonymity.

Blockchain technology was designed to empower individuals by providing a decentralized and immutable record of transactions, ensuring user privacy, and reducing reliance on centralized third parties. Introducing AI to track and audit blockchain transactions could compromise these principles.

AI could lead to increased surveillance, potentially infringing on users privacy rights. Additionally, centralized oversight of transactions through AI models could contradict the idea of decentralization that underpins blockchain technology.

To address these concerns, any implementation of AI for auditing blockchain transactions must be approached cautiously and with a focus on preserving the fundamental principles of the technology.

It is essential to strike a balance between transparency and anonymity, ensuring that AI-driven audits enhance security and compliance without compromising on the features that set blockchain systems apart from centralized systems.

Introducing XAI-based auditing solutions for blockchain transactions could have far-reaching implications for the industry:

There are clear challenges to auditing blockchain transactions, given the decentralized and complex nature of the technology. Implementing explainable AI can help address these challenges, providing auditors and regulators with insights into complex datasets.

The ethical considerations must be carefully weighed, but responsible integration of XAI into the auditing process could introduce a new level of transparency and accountability to the blockchain ecosystem. Organizations can save time and money while ensuring they comply with industry regulations.

XAI can play an important role in making the use of blockchain technology in critical transactions more trustworthy. There is also the potential to combine XAI and blockchain technologies to drive innovation in creating new applications.

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How Explainable AI Can Clarify Blockchain Transaction Auditing - Techopedia

The drive for smart cities is starting to accelerate as municipal leaders look for ways to cut costs, streamline processes and bolster their green credentials.

The challenge, however, is managing all the data that is required to push intelligent algorithms into the workaday functions of modern urban living: everything from traffic management to criminal justice.

Much of this data is generic, but a good portion is private, which means it must be protected to a high degree even as it is shared among the numerous automated systems that contribute to smart city operations.

First of all, how and why are cities looking to become smart?

Many municipalities are exploring blockchain technology as a way to deliver their services.

In large part, the addition of the blockchain as a component of smart city operations is being driven by the technologys adoption by the business community.

A recent paper by a team of international researchers posted on the Multidisciplinary Digital Publishing Institute (MDPI) website noted that the blockchain is influencing virtually all aspects of the modern digital economy, bringing transparency and efficiency to financial transactions, trade agreements, contract management, and business administration.

As the world gravitates toward this new way of working, governments will have to upgrade their operations as well if they are to maintain critical functions like regulation, legal enforcement, and tax collection.

As a distributed ledger technology (DLT), blockchain offers several advantages when it comes to sharing and combining data without compromising trust or security.

For one thing, it is extremely difficult to tamper with data once it has been added to a blockchain ledgersince this would require hacking into numerous hardened storage sites simultaneously. Sophisticated management software also provides data on a need-to-know basis, which prevents the widespread dissemination of personal and private information.

While blockchain has applications across a wide range of municipal activities, the MDPI team recommended five key areas where it can serve as an enabler:

Blockchain is also seen as a key adjunct for emerging fog and edge networks that support a wide range of municipal functions. A recent article in the journal Frontiers in Sustainable Cities describes how blockchain can create a computing and data marketplace that streamlines interactions between consumers and providers of digital resources, data, and services.

Such a system offers greater support to intelligent agents that can fulfill essential requests from users and connected devices, many of which are intelligent themselves, that populate the ever-expanding Internet of Things.

Such a system can be used to improve traffic management, for example. Data from vehicles, stop lights, and sensors can be used to guide the interaction between these devices, while also being fed into an overarching management system that orchestrates the broader traffic environment.

Public health would also benefit from a robust but secure exchange of data between municipalities, insurance carriers, hospitals, pharmacists, and patients. In these and other applications, blockchain provides the scalability, authenticity, and confidentiality across the entire data pipeline.

Perhaps the key change that blockchain brings to smart cities is decentralization. Urban Next noted recently that centralized government usually acts as a bottleneck for crucial services, as well as for long-term urban renewal.

Blockchain disperses authority and the tools needed to make informed decisions among numerous stakeholders while still keeping key agencies and officials abreast of what is happening throughout the bureaucracy.

In this way, transportation, healthcare, education, and all the other services that enhance the quality of life become more responsive to changing demographics and other conditions, even as controls on costs, resource consumption, and legal/regulatory requirements become more effective.

This could prove particularly useful as cities try to improve things like sustainability without giving up their unique characteristics. Fast-paced, agile data connections coupled with tight encryption facilitate a precise balance between privacy and public expediency, essentially turning city government into a de-intermediated agent that no longer needs to spend significant time, money, and resources controlling the flow of data.

Deploying blockchain on the municipal level is one thing, but doing it equitably is quite another, warns the Urban Institute. City services are supposed to be available to everyone, not just those who have the tools to connect digitally. At a minimum, implementation strategies should account for how blockchain will affect different communities and demographics so that any serious discrepancies can be addressed upfront.

It is also tempting to develop policies for the blockchain environment in conjunction with private companies, not citizens. This may be the quicker, cheaper way to go, but it wont necessarily deliver an optimal outcome for the user base. Robust community input coupled with a competitive developer selection process is the best formula for overall success.

Without a doubt, blockchain will become as crucial a tool for governments as it is for business, and this will drive greater intelligence and greater automation to the multitude of processes that make cities work.

Just like people, a city can only be as smart as its knowledge base allows, and without blockchain, it will be difficult at best to implement smart technologies at the speed and scale needed to fulfill the needs of urban populations.

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How the Blockchain Will Influence the Smart Cities of Tomorrow - Techopedia

As Metas Twitter competitor, Threads, started generating buzz ahead of yesterdays launch, curious netizens spotted a placeholder listing for the app in Apples App Store. Like all iOS apps, the listing included details about the user data the app is designed to collect and track. And observers couldnt help but notice that this brand-new app was already listing a whopping 14 categories of data that may be collected and linked to your identity.

It might be a jarring reminder, but this is par for the course with Meta-owned apps, which the company monetizes by selling targeted ads and personalized marketing. Facebook and Instagrams iOS apps list even more categories than Threads, the Messenger app lists about as many, and even the secure messaging app WhatsApp discloses nine categories of Data Linked to You. So for people fed up with Twitters rapidly deteriorating platform (and vibes), a Meta-owned alternativewith its predictability and relative stabilitycould even potentially appeal to those who are generally concerned about data privacy.

Early data suggests as much: Threads, which is directly linked to users Instagram accounts, saw 10 million sign-ups in its first seven hours, according to CEO Mark Zuckerberg. Ultimately, Metas pitch for Threads is simply that its the devil you know.

But one thing is different this time: Meta is dangling an opportunity to essentially be on Threads without signing up for the platform at all. The company announced yesterday that it is planning to make Threads interoperable with other, non-Meta social networks that support a decentralized protocol already used by WordPress and 2022s decentralization poster child, Mastodon. This means that if Meta follows through, youll be able to see and interact with Threads content from other platforms and services that support the standard, which is known as ActivityPub.

Meta says that Threads will start supporting ActivityPub soon, a descriptor that doesnt necessarily inspire confidence. The company has already spent years, for example, working on its longtime promise of default end-to-end encryption on Messenger. But incorporating decentralization into Threads, and specifically supporting ActivityPub, has reportedly been a core aspect of Metas vision for the app from the beginning. Meta has also already sketched out details of the plan in its supplemental privacy policy for Threads.

All of this means that if youre sick of Metas data-gobbling ways, or you dont already have an Instagram account and dont want to get one, you actually have some leverage: Dont join Threads. Use Mastodon or another ActivityPub platform until Threads comes to you. Or hang out on Bluesky, which doesnt support ActivityPub but is working on its own vision of a decentralized, portable social network.

The fact that large platforms are adopting ActivityPub is not only validation of the movement towards decentralized social media, but a path forward for people locked into these platforms to switch to better providers. Which in turn, puts pressure on such platforms to provide better, less exploitative services," Mastodon CEO Eugen Rochko wrote in a blog post ahead of yesterdays Threads launch.

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Don't Join ThreadsMake Instagram's 'Twitter Killer' Join You | WIRED - WIRED

Want to raise millions?

Insert generic industry in need of disruption. Slap AI and Web3 onto your pitch deck. Watch the funding frenzy begin. This approach has quickly become venture capitals version of the ol walks into a bar joke.

Like most great comedy, its funny because it feels true. Artificial intelligence, and what it could mean for crypto and blockchain technologies, has reached new heights of hyperbole. Both Twitter speculators and institutional investors are salivating at the promise of a better web run by AI and smart contracts.

Certainly, their vision of a fully automated and decentralized future will come. But the attention on it now is a tad premature, as such integrated technology is still likely a decade away.

Inordinately focusing on that future reality risks missing the tangible value AI can add (and is already adding) to our present reality.

Before photographs, the concept of capturing a moment in time with anything but memory was completely foreign. Before electricity, the idea of cities filled with light, even at night, was science fiction. Before the internet, the thought of sending meaningful content instantly across the world was pure lunacy.

You dont know what you dont know. Each new epoch of technology expands humanitys understanding of what is possible in practical, physical ways and only then do people realize what they were missing out on. Society has an immense need for more applications on the web, which is quickly becoming where many of us spend the majority of our time. But its difficult to know how much our app deficit has cost us in terms of our online experiences, because we dont know what the alternative looks likeyet.

AI will upend many sectors, in many ways. For programmers, much of its present-day value lies in its ability to help them build better applications, faster. This is already happening, with the help of dedicated AI coding assistants, such as Copilot, and generic ones, like Open AIs ChatGPT interface.

With coders able to offload the more tedious programming processes to AI including quality assistance, which for some developers can consume most of their working hours they can focus on solving deeper-level challenges and creating even more innovative solutions for security and scalability.

This stage will lead to immediate hyperbolic growth in application development, leading to a surge in AI-based tools meant to bridge the gap between the datasets that drive AI and the practical use cases that consumers are looking for.

That growth will assuredly include decentralized apps (dapps) as well, including Web3 games built on revenue-sharing blockchains and DeFi networks that democratize financial services to unbanked parts of the world.

An increase in Web3 apps powered by AI building tools will push the ecosystem forward. The next transformative phase will come in the form of Web3 apps that actually build AI into their systems, using automation as the lighter fluid fueling an explosion in new decentralized business models and technologies.

Blockchain technologies have already proven to be great tools for bootstrapping digital communities, encouraging virtuous cycles through aligned incentives, and creating greater network efforts through shared ownership. AI can help augment those natural strengths and further enhance them.

Some examples: Consider the potential of a music app where creators were programmatically rewarded for how well they could use AI to increase the quantity and quality of their compositions. Or imagine how Web3 networks could use public data available on blockchain to identify revelatory trends like connecting the work of charities building wells in Africa or Southeast Asia with DeFi applications expanding financial services to the estimated $1.4 billion people who remain unbanked across the world.

If Web3 scales community building, then AI more easily scales content production. Together, they create rapidly scalable content built by a rapidly scalable community. And that equals a massive upside.

Now, to the stage of AI and Web3 integration that everyone is talking about prematurely.

AI-empowered blockchains and protocols will stack the powers of machine learning capabilities with the decentralization and aligned incentivization of Web3. The vision: For AI to enable greater transparency, greater value exchange, greater decentralization, greater education.

Some more tangible examples are the evolution of NFTs from static to dynamic, as it becomes possible to produce them at greater scale and with more adaptability while incorporating machine learning capabilities. And perhaps the biggest application will be in virtual worlds, including Web3 games and metaverses, which will rely on AI to handle core network functions, everything from content creation and moderation to verification of hundreds of millions of users and their digital assets.

Read more from our opinion section: Blockchain can save the media

Eventually, I believe that AI will be incorporated in a way that it can essentially govern Web3 blockchains and networks.

Instead of a DAO voting on every small tweak or adjustment to the protocol, the AI model could be given wide purview to make decisions that keep the DAO working efficiently.

The community could adjust this purview based on their own values and interests. Importantly, it could also adjust the parameters by which the AI model makes decisions about the network and due to the transparency of the blockchain, these parameters could be public and easily accessible for all to see.

Having public, automated AI decision-making would be similar to having greater visibility and control over the algorithms that drive social media platforms like, say, Twitter or Facebook.

Dont like the parameters that dictate what content gets promoted (or censored) on your favorite platform? You can vote, together, to change it.

This final stage of AI and Web3 integration will be difficult to achieve, and costly, which is why it wont happen overnight. But once it comes, it opens up a whole new galaxy of apps and services that reward people with more ownership and control.

Jack OHolleran is Co-Founder and CEO of SKALE Labs, the team behind SKALE, the worlds fastest blockchain, designed for ultra-fast, secure, user-centric Ethereum scaling. Jack is a veteran Silicon Valley Technology entrepreneur with a deep background in machine learning/AI technologies and blockchain. Formerly, Jack co-founded IncentAlign (now Aktana) and held executive positions at Good Technology and Motorola. Jack first started working with digital currencies in 2008 when he was instrumental in building a digital currency platform for Enterprise Resource Allocation.

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It's way too soon for a marriage of AI and Web3 - Blockworks

How will the coalition partners reconcile their differences in approach towards resolving the long-running conflict in the predominantly Muslim deep South?In the second of a three-part series, our Political Desk analyses the challenges in pursuing a peace process.

The eight-party coalition expected to form the new government led by the Move Forward Party faces tough challenges mapping out a new peace initiative in the restive South, according to members of the working group.

Among the progressive ideas being considered are demilitarization and decentralization of the region.

Peace in the predominantly Muslim region has been earmarked as a priority by the new coalition and they intend to deliver some concrete outputs within the first 100 days of the new government taking office.

While many governments in the past have struggled to contain violence orchestrated by faceless insurgents since 2004, this will be the first major effort to resolve the southern crisis as the new coalition strives to translate the peoples mandate they got from the May 14 election to bring peace to the region.

The parties in the coalition have sent representatives keen on the peace process to join a working group that would formulate policies and plans for the strife-torn region. The members of the group include ex-journalist and peace activist Romadon Panjor from the Move Forward Party; former National Security Council (NSC) secretary-general Paradon Pattanatabut from the Pheu Thai Party; former Southern Border Administration Center (SBAC) secretary-general Tawee Sodsong from the Prachachat Party; and former UN official Kannavee Suebsang from the Fair Party.

The working group has been tasked with addressing all dimensions and aspects of the problems in the deep South, comparing and synchronizing policies of all parties as well as making policy recommendations to the new government, according to Move Forward MP Romadon. The violence in the region, which has left over 7,000 people dead, is only one part of the bigger problems in the deep South, he said.

After three rounds of meetings, the group has already considered the different policies of all parties in the coalition, the political issues, the security concerns, and economic matters, he said.

Differences within coalition

Although parties in the coalition share the same goal of seeing peace and prosperity in the southernmost part of the country, which is very unique in terms of religion and ethnicity, they all have different characters, styles, concerns, and priorities.

The Move Forward Party, which won the most seats in the May 14 election and led the formation of the new coalition government, has many progressive and radical ideas to deal with thesituation in the predominantly Muslim region. The party wants to demilitarize and decentralize the region as well as establish civilian-led operations on the ground. It wants to bring to an end the Martial Law, Emergency Law as well as Internal Security Law imposed in the region. The bold idea to end the role of the Internal Security Operations Command was broached by the Move Forward Party during its election campaign.

Another key member of the coalition, the Pheu Thai Party, has many years of experience in dealing with the deep South crisis. The current wave of violence erupted in 2004 when Thai Rak Thai Party, which became Pheu Thai many years later, was in power and was blamed for mishandling the issue. Pheu Thai revived peace talks in 2013 after a fresh mandate in 2011, under prime minister Yingluck Shinawatra. It was Paradon, the then NSC chief, who signed a deal with the separatist Barisan Revolusi Nasional (BRN). It is widely expected that Paradon would regain the job.

The Prachachat Party, led by the charismatic and influential Muslim politician Wan Muhamad Noor Matha, has its strong base in the deep South with 9 MPs from the May election. The partys secretary-general, Tawee, is widely regarded as having a solid background on the South issue and is respected by Malay-Muslim leaders there. Tawee is focused on local governance, notably his former office SBAC, but reportedly simply wants to put his people in the agency, rather than restructuring as the Move Forward wishes, according to a source in the working group.

The Fair Party might have only one seat in the House of Representatives but its secretary-general, Kannavee, is popular in the restive region and has been dedicated to human rights protection for quite some time. The former UN official, who has experience in conflict-ridden countries, including Sudan, the Philippines, and Myanmar, is apparently not easy to work with, according to another source.

Furore over mock referendum could derail deep South peace moves

Talks with separatists?

While all the parties in the coalition agree in principle that the ongoing peace talks with the separatist BRN is a key component of the peace process in the deep South, they have reached no consensus on the way to proceed, according to Romadon.

Kannavee said he wanted civilians and politicians to handle the peace process. Other parties remain unclear on how to move the talks forward.

The Malaysian-facilitated peace process is now working on the Joint Comprehensive Plan towards Peace (JCPP), which is aimed at reducing violence and conducting public consultations. The latest round of meetings held on February 21-22 in Kuala Lumpur between a Thai delegation headed by the former chief of NSC General Wallop Rasanoh and representatives of BRN agreed on 2024 as the time frame for a final peace agreement.

Wallop said a week after the election that he wanted to see the new government continue working with the BRN and the Malay facilitators on creating the JCPP.

Security sources say the BRN is likely waiting to see if the new government will come up with any new ideas to proceed with the talks. The dialogue with the Thai authority over the past years was not exactly a peace negotiation as the military-backed government seemed to merely want a cease-fire pact, rather than a political dialogue for self-determination and perhaps independence from the BRNs perspective.

Outgoing Prime Minister Prayut Chan-o-cha insisted that his successor needed to carry on the talks along this line. The right term for the dialogue ischeracha santisuk(happiness talk),notcheracha santiphabor peace talkper seas both sides are not at war, he furiously told reporters.

Say no to independence

The Move Forward-led coalition has been forced to pursue peace in the deep South within the parameters outlined by the conservative elite who fear any new peace initiative, together with the Move Forwards decentralization platform, could inspire the separatist movement to partition the Malay-Muslim region from the Thai kingdom.

PM candidate Pita Limjaroenrat told reporters clearly that his party and the coalition would uphold the constitutional principle of a unitary state. While the party wanted to push forward a decentralization platform, governance in the deep South would be similar to the rest of the country, he clarified.

Pita and parties in the coalition were forced to come out and explicitly reject separatism after a student group at Prince of Songklas Pattani campus held a mock referendum on the right to self-determination in early June, which ignited anger in security agencies and right-wing groups.

Romadon clarified that all political parties were required to uphold the Constitution and work within the legal framework, but it was the duty of the party to accommodate different ideas. We have to face the nature of conflict with political courage, he said.

By Thai PBS Worlds Political Desk

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Uphill task to demilitarize and decentralize Thailand's deep South ... - Thai PBS World