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| By Jurica Dujmovic |
The blockchain landscape continues to evolve beyond the familiar consensus mechanisms. And with that evolution comes increasingly exciting opportunities.
Consensus mechanisms are how blockchains validate transactions.
You may already be familiar with the two most common approaches, Proof-of Work (PoW) and Proof-of-Stake (PoS) mechanisms.
PoW is the original method still used today on the Bitcoin (BTC, “A-”) blockchain. It uses work — the solving of complex algorithms — to validate a transaction and add a block to the blockchain. In reward for the validator’s work, they receive some BTC.
PoS is what the Ethereum (ETH, “B+”) network switched over to in 2021. PoS requires validators to stake their tokens on a blockchain. Validators are then chosen at random to validate the next block, though the more you stake, the more likely you are to be chosen.
These two mechanisms are used in most blockchains. But there’s a newer approach gaining attention.
PoI: AI on the Blockchain
Proof of Intelligence (PoI) is an intriguing intersection of blockchain technology and artificial intelligence that reveals how consensus mechanisms could evolve.
Specifically, it compensates for some of the PoW mechanism’s shortcomings.
See, PoW blockchains require an insane amount of computational power to validate transactions.
Imagine all those GPUs and ASICs crunching away at meaningless math puzzles 24/7 and consuming electricity that could power small nations … just to find a magic number that proves you did the work?
Sure, it secures the network brilliantly. But I, and others, can reasonably see that all that processing power can serve humanity in other ways, too.
That's where PoI mechanisms hits different: Instead of your mining rig mindlessly hunting for hashes, PoI puts those same computing resources to work on actual AI problems to train machine learning models, optimizing algorithms or processing AI datasets.
Your hardware still validates transactions and secures the network. But now it's multitasking by contributing to advancements that might actually matter.
The combined market valuation of blockchain technology and AI was around $550.70 million in 2024. And according to Precedence Research, it is expected grow at a solid CAGR of 23.64% by 2033:
Clearly, we are in the early stages of this new crypto narrative.
That means there will be volatility. And projects that, while promising, won’t be able to go the distance.
But the spoils for the projects that can find their footing could be quite impressive.
In addition, as AI development continues to accelerate, larger organizations are likely to explore PoI blockchains for decentralized AI model training and computation.
This could potentially bring additional technical expertise and resources to PoI projects. However, it could also be a double-edged sword, as increased institutional interest also brings the potential threat of centralization.
Speaking of concerns …
The Challenges (Because Nothing Good Comes Easy)
Before you sell your Bitcoin to go all-in on PoI tokens, let's talk about the hurdles. Because — as is typically the case for new technology — there are a few notable ones.
Complexity & Accessibility Issues:
First off, this isn't your average mining operation. Unlike traditional mining or staking, where pretty much anyone can participate, PoI requires validators to have a level of understanding of how AI works.
And they’ll need access to specialized hardware. We're talking expensive GPUs with heaps of RAM and other expensive toys that aren't exactly household items.
This creates a real barrier to entry that could limit decentralization for most users.
Verification Headaches:
Here's where things get tricky. How do you ensure AI computations are legitimate without some form of centralized oversight? With PoW, verification is straightforward — either your hash meets the difficulty requirement, or it doesn't.
But verifying that a node correctly performed complex AI tasks? That's a whole different ball game.
Security Concerns:
AI-generated outputs can be vulnerable to adversarial attacks or manipulation in ways that traditional consensus mechanisms aren't since, unlike a simple hash verification, AI verification is complex and potentially exploitable. This opens up attack vectors that we're still figuring out how to defend against.
For example, a malicious actor could potentially game the system by submitting computations that appear valid but contain subtle flaws or backdoors.
But despite these challenges, I'm still cautiously optimistic about where PoI might go.
Especially with another PoI possibility on the horizon …
Hybrid Consensus Models
This isn’t a distant prospect. We've already started to see hybrid models emerge as the practical solution to PoI's growing pains.
SingularityNet (AGIX, Not Yet Rated), for example, features a clever fusion of PoS with their Proof of Reputation (PoR), a sophisticated mechanism to secure its decentralized AI marketplace. There’s also NeuroChain's (NCC, Not Yet Rated) Proof of Involvement & Integrity (PII) mechanism that, when combined with their Proof of Workflow approach, functions like PoI.
As the technology evolves, I expect this hybrid trend to accelerate.
We’ll likely see more projects combining PoI elements with established mechanisms to address security and adoption challenges while still harnessing AI-powered validation benefits.
These hybrid approaches serve as bridges. They’ll allow networks to leverage existing blockchain security … all while gradually transitioning toward more sophisticated AI-driven consensus.
That’s where savvy investors can find opportunity. Not with giant, revolutionary leaps. But rather in these smaller evolutionary steps that push computational boundaries while maintaining security.
Final Thoughts
Proof of Intelligence represents a fascinating convergence of blockchain technology and artificial intelligence. And it’s a revolutionary development that's further along than many realize.
While not yet mainstream, PoI has moved beyond purely theoretical papers to actual implementation by projects in the wild.
Next week, I’ll unpack five of the most promising PoI projects that are proving its viability right now.
That leaves us with one pressing question: Will this new consensus mechanism will expand beyond its current specialized niche to challenge established consensus mechanisms like PoW?
The technical challenges remain substantial. But the potential benefits of channeling blockchain's computational demands toward meaningful AI advancement are too compelling to ignore.
Either way, the convergence of AI and blockchain is one of the most intriguing developments to watch in both fields.
And it is one I’ll be watching closely.
I hope you’ll follow up next week as I dive deep into those PoI projects.
Best,
Jurica Dujmovic
