By the end of April 2018, blockchain-oriented projects have already collected a total of $6.1 billion year-to-date via initial coin offerings (ICOs), according to CoinSchedule data. This is a new record, as we saw $5.6 billion raised during the last year. Almost 60% of all the projects cover three markets — communications, finance, and trading & investing — with machine learning & AI getting only 2.7%. So we have an unexplored market here, with the artificial intelligence (AI) being so much ignored by the general public despite it being one of the revolutionary technologies along with blockchain.
AI Crypto, an artificial intelligence (AI) and blockchain-oriented company headquartered in Singapore, wants to combine both of the transformative technologies and bring a game-changing product to the market. In fact, it’s not only about a product — AI Crypto aims to create a whole ecosystem and set a precedent by touching different aspects of the economy. The secret weapon that the team relies on is the Proof of Value (PoV) consensus algorithm rather than the more popular Proof of Work (PoW) and Proof of Stake (PoS) algorithms.
How is PoV Different?
Before defining the key concepts of the Proof of Value algorithm, let us discuss the more popular Proof of Work and Proof of Stake, to have a better view on the main differences between all of them.
The Proof of Work is the first blockchain system ever used, as it underpins Bitcoin — the oldest cryptocurrency and blockchain-based project out there. We should give credit to the PoW protocol for opening the door for all the cryptocurrency and blockchain projects we have today, but as of now, it has become a burden for the world.
The PoW, like any other blockchain algorithm, is applied to confirm transactions and create new blocks within a network. In the PoW system, the responsibility for these processes is on miners, who compete against each other to achieve the results and get rewarded for their work. In the first years, there was no problem with this approach, and the protocol seemed to be actually fair. However, today, the competition is so fierce that miners create entire facilities to convert energy into cryptocurrencies.
According to Digiconomist data, as of April 2018, the energy consumption for mining Bitcoin compared to the energy consumption of various nations would look like this:
The sad truth is that a significant portion of this energy comes from the coal exploitation, mainly on China’s land. PwC blockchain analyst Alex de Vries was concerned about the ‘dirty energy’ used for Bitcoin mining. He toldBloomberg: “The energy-consumption is insane. If we start using this on a global scale, it will kill the planet.”
To solve the problems of the Proof-of-Work, the blockchain developers came with a new concept referred to as Proof of Stake.
The PoS has the same goal — to validate transactions and create new blocks. However, unlike the PoW, where miners have to solve mathematical problems, the PoS enables block creators to be selected in a deterministic way based on their token holdings. However, the PoS has several drawbacks, as it creates a sense of monopoly and centralization, which is the opposite goal of what blockchain was meant for.
AI Crypto doesn’t want its algorithm to become a burden in the future, so the team decided to rely on the Proof of Value system, which is a relatively new protocol that ensures a fair distribution of value among its network users.
Based on the PoV principle, the AIC coins will be provided as rewards to network participants who contribute with proper value that derives from the rightful use of shared resources. When the ecosystem is misused and manipulated for malicious goals, the participants will record damages by paying transaction fees. Thus, the PoV is based on contribution and real value, encouraging its participants to become responsible and motivated to share their resources in a rightful way.
Key Benefits of AI Crypto’s PoV
The fact that AI Crypto leverages the Proof of Value system has clear benefits that will be experienced by every member of the AI Crypto Ecosystem. Here are only a few of them:
- The PoV makes the blockchain scalable and sustainable in the future, ensuring a fair distribution of value. For comparison, Bitcoin’s PoW started well, but now average miners would spend more than their potential reward, which is not fair.
- The PoV principle encourages everyone to contribute rather than to speculate.
- In the PoV system, there is no wasted resource, whether it’s from GPUs or other hardware units.
- The PoV system ensures that the value is shared between the users rather than just owned.
In the end, the Proof of Value concept ensures a win-win situation for the whole AI Crypto community.
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