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Combining AI, IoT, and Blockchain

23 Nov 2023 updated
11 min

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The digital revolution amid which we’re living today is characterized by one massive trend – convergence. Technologies pushing the 4th industrial revolution forward converge technologies that eventually blur the boundaries of physical, digital, and biological. That’s what we witness in the gradual fusion of Artificial Intelligence (AI), the Internet of Things (IoT), and blockchain. 

These three innovations have transferred from sci-fi to everyday human routines. IoT makes our homes smarter, turning multiple devices we use into coherent ecosystems to deliver an outstanding user experience. AI interacts with IoT to advance the operations of home appliances and enable autonomous vehicles, nanotechnology, robotics, and wearable devices. Blockchain pairs with these technologies to enhance the systems’ security and immutability, so it has transformed how we transfer money, think about cybersecurity, and deal with digital assets. 

As a result of these multiplying use cases for innovative technologies, the blockchain IoT market is expected to grow in leaps, from $258 million in 2020 to $2.4 billion by 2026, with a CAGR of 45%+. Check our guide on maximizing the value of AI, IoT, and blockchain development in the form of robust, secure technological infrastructures. The future starts today, and here is how this happens.

Understanding Blockchain, AI, and IoT 

To capture the unique potential AI, IoT, and blockchain present today, one should understand what these terms mean. So, let’s begin with their definitions and a brief overview of their significance. 

AI in finance, as the name suggests, is the capacity of intelligent machines. With the advancement of technology, machines have learned to learn from human input, thus making fast and intelligent decisions. As a result of AI advancement, machine learning has become commonplace, with smart AI algorithms giving users better insights into big data, allowing businesses to understand their clients’ preferences better, and moving automation to a whole new level (e.g., autonomous vehicles, specialized robots, etc.). 

The market potential of AI is immense, with a market of less than $360 million in 2016 expected to grow into a $31 billion industry by 2025. Thus, the immense prospects of AI in the tech-savvy world can hardly be put into question.

Artifical intelligence (AI) market size, 2022 to 2032 (usd billion)

IoT has emerged as a natural social response to rapid digitization. People got surrounded by multiple sensors, devices, and systems, which they found harder to control and converge. IoT has been introduced to unify isolated intelligent devices into one ecosystem that can be customized to an individual user’s preferences, coordinating those devices and at the same time collecting vital data for further analysis.

Thus, IoT may be equaled to the nervous system in the human body as it coordinates the entire organism’s functioning by connecting separate organs and sending signals from one to another. 

IoT’s market potential is unbelievable, as both users and IoT system producers can reap numerous benefits from its use. Users get seamless automated experiences and well-tuned digital ecosystems in their smart cars, homes, and workplaces. Manufacturers, in their turn, receive continuous valuable data about user habits and preferences, able to customize their next offers to exceed customer expectations. Besides, IoT systems boast advanced security, which is invaluable in the modern epoch of looming cyber-threats. 

All these benefits and advancements in IoT usage have turned into a market evaluated at $300 billion in 2021, steadily growing at a CAGR of 16%+ and expected to exceed $650 billion in 2026. The 2030 estimate for IoT is even more optimistic, with a $3.3 trillion market cap resulting from IoT’s further integration with AI and blockchain, expanding its spread.

As for blockchain, it is yet another technological innovation with great prospects in all industries. What used to be a $120 million market in 2016 has already crossed the $1.4 billion thresholds and is expected to almost double in 2021. The uniqueness of blockchain is making high-trust computing a reality. Blockchain-based digital systems are distinguished with reliability, transparency, and security that conventional systems lack.

These features make it ideal for financial transactions, contractual and legal agreement execution, and chain of ownership documentation. What’s more, blockchain brings down the cost of digital exchanges by removing the third-party intermediary from the process without security compromises. Thus, blockchain is an ideal facilitator of all digital exchange types, with its impressive transaction speed, real-time visibility of all operations, and low costs.  

As you can see, all three innovations have much to offer to the modern community. While IoT collects data from smart devices and ensures the continuity of their use, AI performs intelligent thinking operations and can inform automated decision-making.

Transactions performed within the IoT ecosystems and informed by AI algorithms can get faster and more securer with blockchain. Accordingly, the convergence of all three technologies can be beneficial for industries of all types. Let’s clarify how it works in practice. 

Blockchain, AI, and IoT convergence

While each of the three innovations is much discussed today, their convergence is a still overlooked area. Yet, the convergence of blockchain, AI, and IoT offers numerous gains on the path to a large-scale digital revolution. These three technologies, when used together, can advance a ton of business processes, introduce new business models, scale and simplify data management, and disrupt numerous modern industries.

Read also: Blockchain in gaming

Smart Contract Auditing Process

Let’s see what each of them adds to the digital innovation equation. 

  1. IoT contributes to process automation and makes business processes user-friendlier.
  2. AI makes use of big data collected via IoT devices, detecting patterns and optimizing data-based business decisions. 
  3. Blockchain adds trust, transparency, and security to the existing digital systems via a decentralized, shared ledger. 

As a result, the converged digital systems benefit from the data derived from IoT sensors via the better computational capacity of AI and secure infrastructure of blockchain.

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Smart Cities: Real-World Example of Beneficial AI, IT, and Blockchain Convergence

Due to IoT, AI, and blockchain’s ability to automate and simplify transactions of data, digital assets, and money, their use has become commonplace in banking, construction, automotive industry, healthcare, and many other niches. A classic example of such convergence’s implementation is the smart city concept. Modern cities are large and infrastructurally complex, using numerous interconnected systems to supply energy and transportation, manage waste, etc. Thus, managing such systems involves high costs and risks. 

Using a combination of IoT, blockchain, and AI, engineers can use smart city blockchains as a decentralized identity and authorization layer between numerous IoT devices. Here are some use cases for this technology fusion in smart cities: 

  • Smart transportation systems. Intelligent information processing systems equipped with a multitude of sensors can control and optimize traffic in cities. They prove effective in alleviating traffic congestion, preventing accidents, and detecting drunk or risky drivers. A combination of GPS sensors, gyroscope data, accelerometers, and infrared sensors can also help traffic surveillance and reduce risks on the roads. 
  • Smart parking. Parking IoT systems can provide real-time data about free parking slots to help drivers find a place for their vehicles without endless cruising.  
  • Water management. Smart management of water supplies is possible in smart cities with the help of smart meters along storm drains and water lines, identifying potential leakages. River water meters and weather analysis sensors can also be effective in flood prediction and prevention.
  • Next-level electricity distribution: smart grids. Grids combining IoT, AI, and blockchain can transform the process of power generation, transmission, and distribution. Consumers can feed electricity to the central grid if they have a surplus of energy from their microgrids with renewable energy sources.

Distributed blockchain based smart city network architecture

The use of blockchain, IoT, and AI in smart cities can help coordinate numerous administrative functions, fostering sustainable city existence and harmonious management of their interrelated elements. Smart cities’ core principle is sustainable waste management, green energy use, green transportation without mobility compromises, and the overall quality of the smart city population’s life. All these aspects can be efficiently combined in a well-functioning, autonomous digital ecosystem. 

Interrelations among urban issues towards sustainability and presence in life cucle studies

Blockchain & AI use cases

AI uses data as the raw material for its operations and decisions. Thus, to enable the proper functioning and further advancement of AI models, engineers are tasked with accumulating and storing huge data sets (i.e., big data). Only a handful of companies can supply the necessary data volume for AI algorithms, so they currently possess a disproportionate competitive advantage on the market. Also, there are no universal data sharing standards today, resulting in masses of data remaining unexplored. Finally, much user data contains sensitive personal information, so using it with AI algorithms entails legally punishable privacy breaches.

Blockchain helps AI companies resolve some of these challenges by offering a unique combination of data privacy, security, and transparency. By converging AI and blockchain, users can: 

  • Establish decentralized, open data markets for AI model training;
  • Identify and record data, thus enabling the data owners and aggregators to package information efficiently for further sale, rent, or sharing; 
  • Create a level playing field for data owners producers and those who need data for AI;
  • Generate large marketplaces for independent AI services. 

In this way, AI can become more commonplace, with the community of blockchain developers spreading the AI benefits and putting it to use easier. To date, the use cases of AI and blockchain convergence can be found in logistics, digital media, money transfer systems, and the like. Here are a couple of specific use cases for AI and blockchain uses: 

  • Security enhancements. Decentralization associated with blockchain can create an added layer of encryption-backed protection for AI systems. AI models built this way won’t have a single point of failure and will make it difficult for a single adversary to compromise the system. 
  • Data analytics. While AI is quickly advancing in data analysis, the problem of secure data storage and management is far from being resolved. Blockchain can help with this bottleneck by offering secure, decentralized storage for large-scale analytics datasets, with private keys and tiered access allowing strong control over data leakage. 
  • Supply chain advancements. Combining AI and blockchain in supply chain systems can improve their transparency and add more automation via smart contract technology. Users and numerous stakeholders may benefit from tracking various inventory and items in real-time. AI can also provide data-backed insights into optimizing inventory management in line with demand patterns and minimizing costs.
  • Authentication. Deep learning models like DALL-E, Midjourney, and Stable Diffusion have taken the world by storm. However, the AI gains in creating deepfakes have caused much concern in terms of public manipulation. Blockchain technologies can validate image and video authenticity and add immutable time stamps to authentic materials to offer proof of the date, time, and place of the material’s origination.

4IRE Crypto report

Blockchain & IoT use cases

IoT can refer to anything today, from consumer applications such as smart homes or outpatient care to autonomous, self-driving cars and entire smart cities. However, for the dramatic expansion of IoT use to be safe and manageable, it has to overcome several bottlenecks. First, massive IoT implementation presupposes managing data and coordinating activities of millions, if not billions, of devices. All of them need to be monitored and controlled by somebody, repaired and maintained, secured against hacking, etc. Besides, IoT’s core benefit is the ability of devices to communicate directly, without human intermediaries, which requires a secure means of P2P communication. With many manufacturers and device types, achieving complete congruence is challenging today. 

Today, the IoT systems are typically designed with client-server-based approaches, with one centralized system handling all data and cross-device communication. Yet, with the massive growth of IoT, such models are already stretched to their limits, unable to ensure larger systems’ flawless functioning. Besides, such centralized devices represent a single point of failure, with all system data lost or compromised upon a cyber-attack or hardware collapse. Finally, the centralized controller’s vendor typically has access to the data stored on its platform, which hinders client confidentiality.

Blockchain offers a solution to all these IoT bottlenecks. By merging IoT solutions with blockchain, users can achieve the following gains: 

  • Centralized servers are replaced by a decentralized IoT platform operated by a community of stakeholders (nods). 
  • Blockchain enables sealing and unique identification of data to prevent fraud or data manipulation. 
  • Blockchain is highly scalable, able to serve as many IoT systems as necessary.
  • Blockchain ensures information provenance via audit trails.
  • Blockchain provides verifiable identities to real-life network participants. 
  • Data in the blockchain is totally private and securely protected. 

Due to these changes, blockchain can add to the IoT systems, its uses may cover the following areas: 

  • Blockchain protection for IoT-based healthcare applications. 
  • Securing data transferred through IoT systems. 
  • Securing the drug supply chain with blockchain. 
  • Countering counterfeiting in all industries.

Use cases of blockchain and IoT include IOTA (a platform supporting IoT and machine economy), the Robonomics Network of Airalabs, and the device connecting platforms of Modum,, and Ambrosus, among others. The combination of IoT and blockchain in the car-sharing industry is put in place by HireGo and the car insurer Car Dossier. 

Real-World Examples of Organizations Successfully Implementing AI, IoT, and Blockchain 

How does the convergence we’re discussing here work in practice? Let’s consider a couple of real-world examples of businesses using the combo in their operations. 

#1 Microsoft 

Microsoft is one of the first tech giants to start investing in AI, ML, and cloud computing. Its Azure cloud platform and Power Platform are examples of innovative software enabling an efficient digital transformation. 

#2 IBM 

IBM is known for a long-term investment in AI, blockchain, and cloud computing to speed up digital transformation. One of its notable achievements is the Watson AI platform – a strategic component in the company’s digital change.

#3 Apple 

Apple has contributed to the development of IoT in many ways. It is the first producer of handy, multi-functional wearable devices with IoT functionality. Besides, the company’s investment in AI has topped $1 billion per year, showcasing its commitment to the AI revolution. 

#4 Samsung 

Samsung is also on the list of forward-looking companies investing early in the development of AI, 5G, and the like. Samsung Galaxy devices are a tangible example of implementing AI and IoT combinations to serve end-users better. 

#5 Amazon 

Amazon has been at the grassroots of the AI/ML revolution by investing heavily in customer service personalization and automation of its logistics. At present, this tech giant uses the fusion of AI, IoT, and blockchain in its operations, such as drone delivery and Amazon Go service.

Emerging Trends and Innovations in AI, IoT, and Blockchain Convergence 

The blend of these innovative technologies enables many revolutionary systems and applications. Thus, we can expect a large-scale technological change in the years to come, including (though not limited to) the following experimental fusions of AI, IoT, and blockchain:

  • Biometric-based, blockchain-enabled payment systems. Payments are a vibrant global industry that favors innovation and added convenience for users. Thus, a promising further development in this niche is a blockchain-enabled payment system that works with the help of biometric authentication and allows hassle-free payments via wearable IoT devices. 
  • Behavior monitoring. Smart sensor networks may feed the collected data via IoT systems to central servers, where they are stored securely with the help of blockchain and processed by AI. As a result of these intricate, interconnected systems’ operations, smart city operators can trace citizen behavior and single out risky patterns.
  • Health records monitoring. EHRs are convenient and modern, but the healthcare system still suffers from a lack of comprehensive security measures. Bringing IoT, AI, and blockchain together for access authorization and safe EHR storage is the expected new level of technology convergence.

Why are Blockchain, AI, and IoT a perfect match?

Now that the ability to converge AI, IoT and blockchain has become more apparent, let’s dive deeper into the gains that businesses choosing to combine them can reap from the combination. 

First, it’s data management that gets better, smoother, and way more efficient. Data can be standardized and packaged easier via the creation of a harmonized digital platform backed by blockchain. Simultaneously, data privacy and security are protected with rigorous mechanisms embedded in the blockchain system. Besides, data management gets really scalable, which is invaluable in a period of massive data growth. 

Second, trust and transparency within such converged ecosystems are considerable. Authentication via a blockchain-based identity increases trust within the network. Identity management gets easier for both individuals and devices, speeding up the transactions and bringing their costs down. 

Finally, smart contracts enable advanced automation. However, the drawback of smart contracts that parties still need to overcome is the high volatility of cryptocurrency exchange rates. Once smart contracts can be established in fiat currency, their adoption in business will become more commonplace. 


As many tech experts say, the future starts today, and the convergence of the best fruits of technological evolution can help society progress in leaps. Blockchain is a powerful technology improving data management today, which contributes to IoT devices’ transparent, truthful, immutable, and secure functioning.

By adding AI to the equation, engineers can address IoT data processing limitations, thus achieving more effective data use and smart analytics. As the example of smart cities has shown, Ai, IoT, and blockchain can enhance the benefits of each other, enabling scalable data management and data-based automated operations of autonomous systems. 

Your ability to catch up with the innovative tech trends is your unique competitive advantage. So, why waste your time thinking about the future if it has already here? 4IRE can help you capture the moment and implement advanced AI, IoT, and blockchain solutions customized to your business needs and realities.

Our sister company,, also offers innovative AI and ML automation product, creating the vital components for your converged high-tech systems. Make your business times more efficient with data analytics and ML; utilize cloud-based products and on-premises solutions by Datrics to transform your way of doing business, making decisions, and making sense of business data. 

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