February 1, 2021 
 

Machine Learning 
and Blockchain 
 
Introduction 
 
Organizations both new and established want to employ the use of technology 
that can disrupt the conventional approach to problems in their respective 
industry. One such area of opportunity arises in the amalgamation of blockchain 
and machine learning (ML).  
 
Though commonly thought as synonymous, artificial intelligence (AI) and 
machine learning (ML) are not the same. ML falls under the broad umbrella of AI 
that also includes the subfields of deep learning, natural language processing, 
computer vision and more. Machine learning is defined as computer programs 
that learn and adapt by using algorithms and statistical models to analyze and 
inference from patterns in data.  
 
Individually they have already proved their value to be indispensable across a 
variety of industries. By combining the two, they enter a mutually exclusive 
relationship. Blockchain can benefit from ML’s ability to analyze enormous 
amounts of data to drive actionable insights and ML receives the robust and 
secure data sets it requires to make quality predictions from blockchain. 
Together they have the potential to accelerate data exploration and analysis, 
while also reinforcing security infrastructure within blockchain and much more 
we will investigate in this report.  
 
General Applications 
 
Outlined below are some of the key applications of blockchain technology as it 
currently relates to machine learning.  
 
Manufacturing Supply Chain: 
 
Between 2015 and 2025 it is expected that 2 million manufacturing jobs will be 
left vacant due to a lack of skilled workers in the current labor force. Coupled with 
the lack of transparency and overall complexity of manufacturing’s supply chain 
component, the issues being faced are being exacerbated across the board. This 
puts enormous strain on the manufacturing sector as a whole and requires 
executives to look for solutions that can mitigate these concerns. 

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Currently, blockchain and ML have offered substantial upside within manufacturing supply 
chain. Due to blockchain’s ability to store transactions and contracts safely on a distributed 
ledger, this technology can be used to verify and update information continuously in 
complex supply chain networks. ML can then be used in conjunction to identify problems 
and make improvements through analysis of the supply chain data.  
 
There have been specific use cases identified where a combination of both blockchain and 
ML can be leveraged within supply chain management. This includes: 
 
1. Reducing Systemic Failures: With rapid synchronization of data in the manufacturing 
process, systemic issues can be quickly identified and addressed. 

2. Better Tracking and Allocation of Maintenance: Record and maintenance updates 

from manufacturers can be readily employed and predictive analytics can be used to 
preemptively schedule repairs. 

3. Supply Chain Auditing: Auditing can be just-in-time and related databases can be 
readily updated. 

 
Finance: 
 
Financial services have seen a radical technological evolution in recent years. After the fallout 
and regulatory changes caused by the 2008 financial crisis, banks were forced to adapt or be 
left behind. As such, financial institutions have been adopting and integrating new ideas and 
innovations at a rapid rate.  
 
Long before the advent of digital assets, fraud has been a significant problem among 
financial institutions. Even now with the inherent security features included within 
cryptocurrency, ML stands to improve fraud detection by identifying irregular patterns in a 
customer’s behavior. This has the potential to increase trust and reduce monetary 
compensation between banks and their customers.  
 
Another promising frontier blockchain and ML have in finance is credit and lending. 
Previously, acquiring loans could be a complicated and time-consuming affair. However, this 
entire process can not only be improved but also reinvented. Due to blockchains’ smart 
contract functionality, intermediaries can be removed from the loan process and allow for 
P2P lending. The process can also be automated with ML’s assistance by analyzing lending 
patterns and classifying customers’ creditworthiness. 
 
Healthcare: 
 
The healthcare industry has always been on the forefront of adopting the latest 
technological advancements that apply to its various fields. Like the other industries 
explored above, the healthcare sector has lots to gain with the convergence of blockchain 
and ML.  
 
The healthcare sector seeks to provide the public with the best possible care and resources 
while also safeguarding confidential information. However, with the digitization of healthcare 
records, the latter has become increasingly difficult. By using blockchain these fears can be 

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mitigated using its built-in encryption. This will ensure that patient’s personal information is 
only accessed by medical professionals with the correct access. It also introduces the 
possibility of large-scale studies being carried out using ML. The personal information of the 
patients can be encrypted while their medical history can be accessed, resulting in the 
patient remaining anonymous while the scientific community can benefit from the analysis 
of large amounts of medical data.  
 
With a shortage of doctors in many parts of the world it is critical that we optimize how 
medical professionals spend their time consulting with patients. Previously, the only way to 
access medical records was a time-consuming and archaic process where doctors would 
have to contact each other to transfer files. With the use of blockchain to centralize all 
medical information on one database we can save doctors large amounts of time. With all of 
this information on one database we can also train ML algorithms to recommend treatment 
options and predict the likelihood of patients not adhering to treatment plans.  
 
Energy: 
 
Moving toward a future with an emphasis on responsible and renewable energy 
consumption is no easy task. The reluctance to transition to more sustainable energy sources 
is hindered by their unreliability and increased cost relative to traditional energy such as 
fossil fuels. However, with the push by government entities and large organizations such as 
Google to relinquish their reliance on fossil fuels, blockchain and ML will play a pivotal role in 
making this transition seamless.  
 
One way this is being achieved is through P2P energy trading. This means that those 
producing energy (usually through alternative means) can sell their excess directly to others 
on their microgrid, thus eliminating the need for an intermediary and lowering the price. 
Blockchain infrastructure provides secure trades and can execute the transactions via smart 
contracts. ML comes into play when predicting energy supply and demand. Through usage 
patterns and analysis of production conditions for sources such as wind and solar energy, the 
amount of energy produced can be forecasted, and pricing can be optimized. This increases 
value for both producers and consumers.  
 
Another promising application of blockchain and ML within the energy sector lies in sales 
and marketing. Through blockchain all the consumers information including usage behavior 
is collected and stored. This enables ML techniques to be used to identify patterns in 
consumption so that tailored and value-added energy products can be better positioned to 
the customer.  
 
Cyber Security: 
 
With state-sponsored and independent hacking groups infiltrating networks around the 
globe there needs to be a greater emphasis on the cybersecurity measures that protect 
critical infrastructure. With many companies upgrading their technology and integrating it 
with the internet they expose themselves to a greater threat of attack.  
 
Blockchain offers end to end encryption and stores information in a decentralized manner 
which can aid in data integrity practices. The bonus of using blockchain for data storage in a 
cyber security capacity is the applications with ML. Although ML is powerful at addressing 

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security concerns, it must be provided with uncorrupted data to ensure it produces unbiased 
insights.  
 
Blockchain can provide ML with authentic and reliable data that its algorithms can not only 
learn to detect threats with but also disable them. With a shortage of cyber security 
professionals, this can alleviate the need to focus on menial tasks and shift attention to more 
pressing issues. This increases the efficacy of cyber security protocols and prevents costly 
data breaches for security companies and businesses who entrust them with their data.  
 
IoT:  
 
With the ability to revolutionize existing industries, both blockchain and ML are also well 
poised to aid and improve newly emerging ones such as IoT. Although in its infancy, IoT is 
already improving the lives of consumers and businesses alike.  
 
The nature of IoT and its applications means that very large amounts of data will be collected 
in conjunction with its use. Much of this data will be collected in various formats but will be 
needed to be kept on a centralized server. As a result of hash functions, data on blockchains 
is usually stored in one format, therefore blockchain can help to standardize data in one 
format by creating a harmonized digital platform. This allows for easy data management 
which in turn can use ML to increase the scalability of IoT due to its limitations with 
throughput.  
 
Use-Cases & Examples 
 
In this report we explored various  Peculium: 
industries to gain insights in how they   
utilize a combination of blockchain and  Peculium is a platform that helps 
ML. In the below section we will discuss  investors automatically manage their 
how companies are already integrating  cryptocurrency portfolios. The company 
these technologies to provide unique  has created a virtual advisor AIEVE, which 
solutions in their respective sectors.  uses automated machine learning to 
learn from the analysis of historical 
Core Scientific:  information about cryptocurrency 
  markets. It analyzes data from a variety of 
Core Scientific is a premier blockchain  sources such as financial markets, new 
and artificial intelligence service provider.  media, online articles and more. Larger 
They create personalized infrastructure  businesses also have the opportunity to 
and software solutions to optimize a  utilize Peculium’s services through its 
variety of business operations including  investment platform, Altreus. Using smart 
supply chain management and real-time  contracts, the platform engages in 
reporting of inventory. They also engage  activities for the client company for a 
in ethical practice where 70% of their  desired amount of time outlined in the 
energy comes from renewable sources.  contract after which point the services are 
Their tech solutions can be implemented  terminated. Peculium has the potential to 
into the manufacturing industry to  give consumers and businesses 
increase transparency and tracking of  assistance in a fast-growing area of 
goods.   financial services.  
   

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Burst IQ:  data from energy companies and then 
  encrypts the data so it can be analyzed 
The healthcare industry is experiencing  while keeping the company anonymous. 
radical change and technologies now  It also allows entities to pool their data 
exist that will break down data silos and  together for more rigorous analysis with a 
enable health data to be connected on a  variety of ML techniques. TAC also uses of 
global scale. Burst IQ created a  smart contracts and ML to meet 
“healthcare-wallet” that stores all patient  regulatory compliance measures that 
personal and medical information. This  typically govern the sharing of private 
gives medical professionals easy access to  information. With a number of patents 
a patient’s health records and wellness  pending and strong leadership, VIA is a 
plans. It also gives doctors the ability to  powerful disruptor within the energy 
buy, sell or trade patient data in exchange  industry. 
for scientific studies or to learn more   
about a disease. The blockchain is able to  Distro:  
keep personal information private while   
showing only big picture health-related  Distro has emerged as the first 
data. All of this data can be analyzed via  high-frequency decentralized energy 
ML to provide insight to doctors and  trading platform. Their goal has been to 
research teams related to recommended  encourage fair and transparent prices as 
treatment plans for patients, large-scale  well as cost efficient consumption of 
studies and more.  renewable energy. Dutch scientists are 
  utilizing microgrids to sell solar and 
Gainfy​:  battery energy on a blockchain based 
  platform. Through the use of ML they 
Gainfy is on the fore-front of healthcare  have optimized supply to ensure it meets 
innovation that is assisting patients in  consumer demand. Distro incentivizes 
leading longer and healthier lives. They  lower energy consumption during periods 
are a healthcare platform that leverages  of low energy generation by lowering 
blockchain and ML in order to facilitate a  prices during high generation periods. 
multitude of tasks. The platform can  This has resulted in cost reduction for 
streamline appointment scheduling,  end-users and minimal waste of 
digital payments, identity verification, and  produced energy. 
enable medical records management,   
this platform also allows monetization of  AI Blockchain: 
anonymous clinical data through a crypto   
payment system. Patients will now get  AI Blockchain is a cyber security tool that 
timely service, researchers will receive  uses intelligent digital agents to govern 
needed data and people will be  its blockchain. Through the use of ML, 
compensated for sharing their  they are able to closely monitor the 
information. Everyone in the ecosystem  process of building and maintaining its 
stands to benefit.  platform. AI Blockchain has already seen 
  success as a tool used in real estate, 
VIA:  healthcare and financial services. It should 
  also be noted that cyber security isn’t its 
VIA looks to assist some of the world’s  only utility. It is actively working on ways 
largest energy companies in better  to use its ledger for smart contracts, due 
utilizing their data through blockchain  diligence and loyalty rewards tokens.  
and ML. It uses its own patented Trusted   
Analytics Chain (TAC) to securely obtain  AnChain.ai: 

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  information. However, in order for the ML 
Based in San Francisco, AnChain.ai is a  to change and derive predictions from the 
blockchain powered cybersecurity  data it needs to be decrypted. This makes 
ecosystem that provides services to both  the data vulnerable and introduces the 
large corporations and individuals. By  threat of a data breach.   
providing blockchain data analytics and   
in-depth cryptocurrency transaction  With large corporations looking to 
monitoring on a wide variety of public  leverage blockchain and ML, scalability 
and private chains, they allow the full  has emerged as an obstacle. At present, 
range of industry stakeholders (i.e.  blockchain is not capable of handling the 
operators, builders, regulators, investors)  immense amount of data possessed and 
to confidently interact with the  to be acquired by these institutions. This 
developing digital economy. Their  is problematic because ML works best 
services are designed to identify  with the largest possible dataset to draw 
vulnerabilities in systems to help fortify  insights from. Moving forward this will 
customers' cyber security needs. The  need to be addressed to achieve the full 
AnChain Situational Awareness Platform  potential of blockchain and ML’s 
(SAP) was built with features including an  relationship.  
AI-driven correlation engine with   
blockchain threat intelligence. AnChain.ai 
Conclusion 
also boasts impressive partnerships with 
 
Yahoo, Dell and other large organizations.  
The full potential of blockchain and ML 
 
has yet to be realized. Both technologies 
Risks and Challenges  will play a pivotal role in a myriad of 
   applications both individually and in 
Together, blockchain and ML have found  combination. Their value is already 
applications in a substantial amount of  indispensable in a number of industries 
industries and use cases. However, with all  and will continue to see increased 
the benefits they are able to provide there  adoption as they improve. With the 
are also shortfalls that must be addressed.  widespread adoption of quantum 
  computing on the horizon, the 
The first issue arises from their massive  performance of ML with be completely 
energy consumption needs. Due to  transformed. As an increasing number of 
blockchains consensus mechanisms and  industries recognize the full potential of 
ML’s requirements of computational  blockchain and ML’s integration, their 
power, the resources required to operate  espousal will continue to flourish beyond 
them at optimal capacity is very  the use cases investigated in this report.   
expensive. Though when used in   
conjunction they are able to create     
efficiencies that reduce their power input. 
However, even with this reduction they 
still require an enormous supply of 
energy.  
 
Another notable problem stems from 
security. Blockchain technology is 
inherently secure due to encryption of the 
data stored within it. This data can then 
supply ML with reliable and uncorrupted 

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