Are neuromorphic chips the future of AI and blockchain?

There is no doubt that artificial intelligence (AI) is the driver of a revolution in automation akin to the influence of coal and factory machines on previous industrial revolutions. Jayshree Pandya, writing for Forbes, makes a very interesting point when he suggests that the increasing importance of AI also goes hand in hand with a need for more computing power.

He suggests, “There are indicators that raw computing power is on its way to replacing fossil fuels and will be the most valued fuel in the rapidly emerging intelligence age.” The question of course is — where will that computing power come from?

The need for more computing power

AI also needs massive amounts of data to produce useful tools. One of the sources of both power and data is potentially the blockchain. Alongside the much-needed power, blockchain technology can add structure and accountability to AI algorithms, “and may help in much-needed areas like security, quality, and integrity of the intelligence AI produces,” Pandya says.

What we are really talking about is Big Data. It is the fuel of AI and blockchain produces that fuel, so it is entirely logical that the two have a future together.

However, there is another important question to be answered. Can the current blockchain technology infrastructure support the needs of AI, when it appears to be struggling to meet its own needs?

Prof. Irving Wladawsky-Berger, a Research Affiliate at MIT Sloan School of Management offers some insights into the situation. He points to the environmental concerns about the amount of electric power blockchain technology uses, because of its core process and security, which necessitates that all users require permission to write on the chain. He believes the amount of computing power the blockchain requires is unsustainable, and that it is one of the most critical challenges facing the industry.

But it isn’t only blockchain that is fuelling the need for more computing power: it is AI and all emerging technologies. As these evolve, there needs to be a solution to this issue. As Berger says, “there is a need to not only process computation more efficiently but also to evolve both hardware and software to meet the demand for increased computing power.” The solution he points to, “is a clear need to move away from traditional blockchain chips to low energy, scalable, and sustainable chips.”

Neuromorphic chips

The answer may be neuromorphic chips. These do all the processing and functioning without having to send message back and forth to the cloud etc. In fact, they function in a similar way to the human brain, conserving energy by only functioning when needed. Berger believes, “neuromorphic computing chips will likely be the future of not only artificial intelligence but also of the blockchain, as they give us an ability to develop low energy consuming cryptocurrency as well as distributed systems.”

What he is also suggesting is that in recent years there has been more emphasis on developing software than hardware. He says, “Neuromorphic computing and chips bring the much-needed evolution in computer hardware,” and that if we follow through with developing this, then AI and blockchain can have a sustainable future together.

We know that the demand for AI is increasing rapidly, and we need to find a power source to feed that demand. It seems the answer is neuromorphic chips!

Will IEOs become the next big trend?

While it is true that ICOs are not quite yet dead, they enjoy far less hype than they did in 2017. And as interest in initial coin offerings wanes, a new player has arrived on the scene in the form of the Initial Exchange Offering (IEO). What is this beast, you may ask, and how does it work?

The Fetch.AI project is an IEO that has received a lot of media attention, not least because it raised $6 million in 22 seconds. The fundraiser was held on the Binance exchange. BitTorrent also raised $7.2 million in 18 minutes via an IEO. These heady figures are bound to draw the attention of those who feel the air has almost completely leaked out of the ICO balloon.

An alternative to the ICO

However, the need to raise money for blockchain-related projects remains. Which is where the IEO comes in — as an alternative to both the ICO and private placement. With the latter, the project raises funds via a private investor, rather than going to the public with tokens. The downside of choosing private placement is that there needs to be a very high level of interest in the project by investors with very deep pockets, such as those who funded Telegram to the tune of $850 million.

How does an IEO work?

An IEO is “an agreement with an exchange on an initial placement via the exchange,” writes Maria Stankovich on Medium. It is possible to simplify this explanation even further and say it is a token sale held on an exchange, which acts as an intermediary. And that is one key difference between the IEO and the ICO.

The exchange, it could be Binance or one of the others, assesses the project from a technical perspective to ensure it is legitimate, and they look at how attractive they believe the project will be to the exchange’s clients and a wider audience as well. If they are satisfied with the quality of the project, they make an announcement about the token sale on the exchange.

The upside for token buyers is that unlike with an ICO, they don’t need to send funds to purchase tokens via a smart contract; they can buy them directly from their personal account on the exchange.

The benefits of an IEO

There is a big benefit here for the project needing to raise funds, in that an exchange has a ready-made base of potential investors. It also means that the token is listed on an exchange — something that many ICOs have struggled with, despite promises to their followers. And the investors feel a higher level of trust, because the sale is taking place via the exchange that they already have confidence in. They also don’t need to go through more KYC, exchange fiat for crypto etc etc. It’s easier for everyone.

And of course the exchange benefits, or they wouldn’t do it. They potentially get a whole bunch of new customers who want to buy tokens. And these token buyers may stay to become long-term users of the exchange.

At the moment, only a handful of exchanges are offering IEOs. These include Binance, EXMO, GBE, Bittrex and Huobi. The Gibraltar Blockchain Exchangeis another leader in IEOs, and has conducted seven of them so far, using its GBX Grid — Token Launch Centre tool.

It is early days for IEOs, but the way forward seems promising: after all, unlike with an ICO, any proposed project will go through a more rigorous analysis before the sale begins, and that should boost investor confidence in the mechanism and the project.

3 predictions for the digital financial future

The financial industry is going through a sea change. So many aspects of it are under scrutiny: from debates over cashless societies, to universal basic income, and the implications of digital currencies. Money has always been a hot topic, but it has become even hotter.

Blockchain changed the conversation

The advent of blockchain technology is in part a reason for this sudden increase in interest. As Lauren deLisa Coleman writes for Forbes, we are seeing financial giants like JP Morgan enter the digital currency space, alongside Facebook and IBM. And she points out, “But amidst such vast activity around digital currency overall, there is a specific and growing interest toward trend shifts pertaining particularly to token exchanges.

Talking about Token Exchanges

Coleman reports on the discussions at a New York event: Token Exchanges: The promise of liquidity, compliance and stability, where lawyers comprised the majority of the audience. Joel Telpner, partner and Chair Fintech & Blockchain Practice at Sullivan & Worcester LLP, addressed the issue of turbulence in the digital currency space: “We’re all collectively paying the price at the moment, but it’s important to keep in mind that this is not a bad thing. Most all new forms of technology have experienced a high level of unreasonable exuberance in the early days and after that period, business becomes much more stable.”

A more mature environment

Interestingly, he also suggested that now is the time to create a new ecosystem with new players: “”We’re at the end of the beginning,” he remarked. “This is about moving from the wild, wild, west to a more mature level of the digital currency space and tokens. Those that remain have to work hard and understand that success will come from fundamental principles in business and governance, and it will certainly pay off.”

3 key things to watch out for

He then identified what he believed are the three key regulatory areas to watch this year that could be game changers:

1. He believes the US Securities and Exchange Commission (SEC) will make a statement about the status of digital currencies and tokens — which are tokens and which are not.

2. The CFTC (Commodity Future Trading Commission) will become more involved in the token space given that this collective regulates commodities.

3. Stablecoins will come under a regulatory spotlight and decisions will be made about how to regulate this particular type of digital currency.

The event also revealed that a consensus of opinion indicates the issue of custodianship will come under focus this year as well. In addition, there will also be an eye to how trade is conducted in this space and how securities are managed securities once they are issued.

But, one of the most hotly debated topics in the industry is which jurisdiction will establish itself as a leader in the space: Telpner’s response to this was: “”But this approach was wrong in 2017, 2018 and still wrong to think like this in 2019, because all countries are working hard to regulate this space. Stop chasing jurisdiction.”

JP Morgan surprises us with a stablecoin

When JP Morgan announced the launch of its very own stablecoin, the industry was somewhat shocked. Was this not the big bank that loathed cryptocurrencies? The move got people excited, both in traditional banking and in the crypto community. But is the JPM Coin really as big a deal as everyone seems to think it is.

Naturally, the industry pricks up its ears when JP Morgan speaks, and any of its previous explorations of the blockchain have produced similar interest. As Ben Jessel, head of enterprise blockchain at Kadena remarks, “In the last few weeks, blockchain innovation managers’ phones across Wall Street investment banks have been ringing with executives inquiring about JP Morgan’s stablecoin and how they should be responding.”

That’s because enterprise blockchain technology has been the way that big companies have sought to harness blockchain technology to meet their needs as large organisations. JP Morgan’s move has made others question what to do next — is this the time to jump in and be first in the fast-follower line?

Initially, the JPM Coin seems exciting, because it suggests that Wall Street is beginning to “blur the lines between institutional banking and the brave new world of cryptocurrency,” as Jessel suggests. But the reality is not so simple.

Faster, cheaper settlements

JP Morgan’s stablecoin seeks to solve two problems in financial markets today: the expensive and inefficient process of settlement and the volatility involved in holding money in cryptocurrency. Settlement is expensive for banks for a number of reasons: first, payments are rarely made in real-time, which means that in many cases funds that should be paid are not actually made available until the end of the day. For the banks, this means billions of dollars can be tied up and can’t be used.

Blockchain speeds the process up, making the process less expensive for banks and reducing the liquidity trap, i.e. funds being tied up in the process of settlement.

JP Morgan’s stablecoin neatly connects the dots between the aspects of settlement and volatility management by providing digital cash that can be used and enabling the ability to redeem the coin at a stable rate. This may sound like a big deal, but in fact all it means is that any counterparty would be paid by JP Morgan issuing a digital certificate. At its most fundamental, JP Morgan is promising to credit the account of a user when presented with a digital certificate that has a redemption value of a dollar.

Having said all this, JP Morgan’s new ‘Coin’ is not an insignificant development. Don’t forget, this is an industry where they still use fax machines, so in that context, the JPM Coin is actually a pretty big deal.