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Blockchain use cases - Smart Contracts and industry use cases: Further questions answered

Author: ICAEW

Published: 14 May 2024

A selection of popular questions asked by delegates during this webinar.

Question

As a small practitioner, I have not come across any clients using or likely to “knowingly” use the block chain technology in their business except for some clients speculative trading in digital currencies.  How is block chain concept going to be relevant to my practice?

Answer

Assuming you are a small accounting firm, having clients trading in digital currencies you could help your clients in the preparation of financial statements and tax advisory services. But in order to do that, you would need to understand how the technology works and acquire the necessary skills and knowledge in the field.

Question

If Blockchain gets rid of the middlemen, how would I know that there is an actual link between a blockchain code and a particular asset? Related Question: In tokenisation for collateral purposes how does the block chain monitor a collateralised asset, eg if the underlying asset is sold, how would the blockchain catch that market movement? and then update the blockchain?

Answer

When it comes to real world assets, unfortunately intermediaries will still need to be in place in order to establish a link between the digital asset and the physical asset. With the amalgamation of blockchain technology and IoT devices, this intermediation could rely on the readings of the IoT devices and embedding them on the blockchain.

Question

You’ve spoken about the significant advantages of using Blockchain. What are some key disadvantages of using Blockchain for the applications that you described.

Answer

The main disadvantages of blockchain technology currently are the high implementation costs, scalability issues and the lack of distributed computing systems. Integrating blockchain technology into existing systems can be costly due to infrastructure setup, development, and training. Blockchain faces challenges in scaling to accommodate large numbers of transactions, leading to slower processing times and higher costs. Blockchain is not inherently a distributed computing system, limiting its ability to handle complex computations and tasks efficiently.

Question

Presumably when an organization uses a SC, the efficiency of audit processes increases as it is more efficient to check samples?

Answer

When a smart contract is deployed, the code of the smart contract should be thoroughly tested on a test net and audited before it is officially deployed on the main network. A smart contract audit will ensure that the code is working as intended and that there are no functions jeopardizing the security of the smart contract. From then on the efficiency of the audit processes is improved as the functionality and automation of the smart contract code leaves no room for human errors.

Question

Has there been a convergence between artificial intelligence and blockchain? If so what is a good example of its manifestation in the real world?

Answer

Yes, there are many protocols in the process of converging blockchain technology and artificial intelligence. A good example of its manifestation in the real world is Bittensor (TAO). Many critics see Artificial Intelligence as a closed loop network where tech giants train their LLM with their own data or versions of truth. As a result AI has been criticized to contain opinions or provide rather censored replies. A simple example is the reply you get from OpenAI ChatGPT when it is asked to make a joke about Mohammed or when asked "how many genders are there". The alternative lies in open decentralized networks such as Bittensor. Bittensor is a decentralized protocol designed for developing, training, sharing, and deploying machine learning models. It establishes a marketplace where machine intelligence can be transformed into a tradable commodity, fostering an open and accessible network. Essentially, Bittensor functions as a language for creating decentralized commodity markets, known as 'subnets', all operating under a unified token system. Through its decentralized network, Bittensor connects providers and consumers of machine learning algorithms and models, facilitating collaboration and innovation in the field of machine learning.