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The Development of Artificial Intelligence in China: Advantages and terms of development


The Cyber era which found its genesis with the advent of the global internet- through the US Department of Defense funding ARPANET experimentations in the late 1960s[1] – embodies the liberal spirit of laissez-faire and the freedom of expression and has grown rapidly from about 3 billion internet users in 2018,[2] to over 5,385,798,406 internet users, – or 67.9% of our total population – as of June 30, 2022.[3] Attempts, however, have been made to curtail users ability to access what is on the internet through the development of national intranets- examples being China’s great firewall,[4] Russia’s sovereign internet,[5] Iran’s National Information Network,[6] and North Korea’s Kwangmyong network.[7] What these national intranets have in common is centralised management in terms of websites and social media that are accessible, and information that is available to the citizens. Each of these states has the ability to distort truth, to rewrite the narrative, and to determine what is fact and force-feed it to their citizens by filtering opposing content and through restricting/blocking access to alternatives. ‘Centralisation’ here refers to concentrated power in the hands of one group, that allows for unilateral decisions to be made on behalf of the entire population or network.

The threat of centralisation also persists within the private sphere/realm, with tech companies having found themselves at the centre of a new debate in the press media. While tech companies focusing on social media may have first formulated/established themselves as outlets for expression of their user base they have now been taking strides in the opposite direction by censoring user posts and content. Recent instance include Pinterest which in 2019 began blocking any and all search results concerning vaccinations.[8] Similarly, Facebook in 2020 began deleting ‘events’ that aimed at organising protests against home quarantine during the start of the COVID pandemic.[9] Twitter in 2021 extricated over 70,000 accounts that were linked with the ‘QAnon’ conspiracy that threatened public order.[10] This was part of Twitter’s policy of removing posts and deleting accounts that broke their platform’s rules. While in each of these instances the concerned tech company may have arguably acted with good intention, their ability to simply flick a switch and unanimously censor content is deeply troubling. The control that social media companies exerted even over influential people culminated with the permanent suspension of U.S ex-President Donald Trump’s Twitter handle.[11] This incident is exemplary when it comes to determining the power of web censorship that is imbued within the hands of social media companies.

How can DLTs help counteract centrality?

‘Distributed Ledger Technologies’ (DLTs) can be used to counter the growing threat of centralisation from both state actors and monolithic tech-companies. There are various kinds of DLTs- such as Directed Acyclic Graphs (DAG), Holochain, Block Lattice, and the most renowned of all being- Blockchains.[12] Quintessentially, DLTs are distributed peer-to-peer networks that utilise a majority consensus for transactions to be verified and then stored as data on a public ledger. For simplicity sake this article will utilise blockchains to illustrate how DLT networks function.

‘Nodes’ are individual peers within a Blockchain network that maintain a record of the ledger thereby being involved in the process of storing, verifying, and distributing the full set of data with other participant nodes on the blockchain.[13] This “ledger of records” is immutable- allowing for data, events, and transactions to be time-stamped on chain, thus creating a verifiable log of all network user’s micro-history. The key features of a DLT are that they are ‘immutable’, ‘trustless’, and ‘verifiable’ with transactions being easily accessible/viewable by anyone in the entire network and it is these qualities that become instrumental when countering centralisation.

Take for instance the ostracisation of some Iranian national banks in 2012 and Russian national banks in 2022 from the ‘Society for Worldwide Interbank Financial Telecommunications’ (SWIFT)- an international banking system which executes international financial transactions.[14]  These instances demonstrate the current weaknesses/drawbacks of our existing financial system- as failure to comply with international norms has resulted in the enforcement of ‘one-sided’ economic sanctions. This cuts off these Banks’ and thereby the nation’s access to the global market as most exchanges occur using SWIFT via the U.S. Dollar and has the secondary effect of debilitating the economic strength of the local currency. Cryptocurrencies, however, are not restricted by these same limitations and were thereby used as a hedge by citizens both in Ukraine and in Russia to save the value of their savings by transferring them from fiat currencies into digital cryptocurrencies.[15] DLTs moreover are resistant to external influence as the transactions (here referring to both financial transactions and any information that is ingrained on-chain) occurring on them are ‘immutable’, which means that once the network/chain is set up- the data time-stamped onto the ledger can no longer be tampered with by third-parties and will continue to exist on-chain permanently. Similarly, attempts made to restrict transactions to -and- between users from a particular region will prove ineffectual as no single entity has control over the entire network.

A second advantage/strength of DLTs is that the ‘consensus mechanism’- the process through which nodes coordinate to add transactions to the network- is designed in such a way so as to allow for the entire process to be ‘trustless’. The immutability of the DLT grants participants on the network the ability to engage in transactions with one-another without having to trust one-another or rely on a third intermediary such as banks or centralised tech platforms to execute the transaction. Moreover, these financial transfer are instant- a real life example being witnessed during the 2022 Russian invasion of Ukraine where individual netizens across the world were able to make direct donations totalling $42 million in 6 days to the Ukrainian Government after they posted their verified wallet address/public key- circumventing the restrictions imposed through bureaucracy.[16] Furthermore it can be argued that the public nature of the digital ledger of transactions grants greater transparency to the public on how exactly the donated money was and can be spent. This is due to the fact all transactions made on-chain (the sending of cryptocurrency to the donated address and the spending of this donated amount on other things) become visible through inputting the public key address on tools such as BSCscan or Etherscan which display all existing transactions.[17] The astounding feature of this whole process is that this can be executed while granting anonymity to the donators- as the only way to identify which address belongs to whom is if the donator somehow revealed that the corresponding wallet belonged to them.

To summarise DLTs have a low barrier to entry as anyone with an internet connection and who is willing to invest time and energy into understanding how the crypto space/system works is able to utilise it. DLTs are designed to be resistant to censorship as every node is independent and the network therefore decentralised. Therefore, a good way to test the strength of a DLT is to measure/assess how easy it would be for a government, corporation, or any external third party (venture capitalist firms, hackers, hacktivists) to shut down or interfere with the network. To shut down or effectively change a decentralized network would require ownership or control of over half the nodes or systems. Even individual countries are incapable of exacting their influence on these independent networks. Algeria, Nepal, Northern Macedonia, and China have all passed laws that decreed the trading and purchase of cryptocurrencies and the utilisation of their underlying blockchains as illegal further blocking user access to websites where cryptocurrencies could be purchased or exchanged making user access difficult but not impossible.[18] Technologies such as Virtual Private Networks (VPNs) grant users the ability to circumvent censorship and allow citizens of even the most authoritarian regimes accessibility.[19] The immutable, anonymous, and decentralized (cross-border/international) nature of DLTs therefore make it very hard for countries to police and regulate crypto transactions. In fact, this was a point argued by Indian Finance Minister Nirmala Sitharaman who called for mutual cooperation and a common solution between countries to tackle the global dilemma posed by cryptocurrencies during a high-level panel discussion organised by the International Monetary Fund (IMF) in April, 2022.[20]

This makes it evident that for the first time in the history of humanity a series of systems are implemented that are capable of resisting State influence which has historically enjoyed its power unperturbed. What has made all of this possible is the invention of ‘smart contracts’, which is immutable computer code, existing on-chain, that allows for the terms and conditions of an agreement between two parties to be carried out without the intervention of a third-trusted party.[21] The contractual clause- such as the release of funds in the form of cryptocurrencies (Bitcoin, Ethereum, Monero etc.) is executed automatically when the necessary preconditions (the fulfilment of services) have been successfully met. Smart contracts allow for the development of decentralised applications and offer increased versatility.

How to discern a centralised DLT from a truly decentralised DLT

DLT networks attempt to adhere to the tenets of decentralisation, at least ideologically, however, the harsh reality is that many of them simply masquerade themselves as being decentralised while falling short of the benchmark. ‘Solana’ is a fine example of an open-source blockchain that despite utilising smart contracts, and supporting decentralised applications (‘dapps’) is still quite centralised. For consensus and for adding transactions to its blockchain Solana utilises a hybrid proof-of-stake model combined with what it has termed as ‘proof-of-history’- where ‘leader’ nodes are chosen randomly for validation for fixed periods of time- thereby lowering latency and increasing throughput.[22] While Solana currently has 1975 validator nodes running giving the illusion of decentralisation- just 32 nodes hold a third of the total staked supply of SOL (a.k.a cumulative stake) and thereby validate a third of all transactions![23] This is dangerous as this implies that 32 of the largest nodes could potentially collude to halt the network. Secondly, once a DLT is up and running outages should virtually be impossible provided the DLT is decentralised enough as no one can collude to temporarily shut off the network. Solana witnessed six outages during the month of January 2022 for periods lasting longer than 8 hours,[24] during which time they halted the entire chain to identify and fix the issues before restarting the chain- something indicative of the centralised nature of this network. Finally, according to a 2021 report by Messari over 48% of Solana’s token allocation at its genesis were allotted to venture capital firms with only a very small fraction going to the public through lock drops or pre-launch sales.[25] Any DLT having almost half of its initial token allocation allotted to VC firms cannot be said to adhere to the ideologies of decentralisation as only a sliver of the entire allocation was even purchasable/attainable by the public. It is for these reasons that Solana can be categorised as a fairly centralised blockchain.

Bitcoin- the original progenitor of all blockchains- currently having over 15000 reachable nodes active all throughout the world- serves as a prime example of a DLT that truly mirrors the ethos of decentralisation.[26] Bitcoin fulfils the core tenets of decentralization with its blockchain being immutable, trestles through by utilising ‘proof-of-work’ (PoW) for consensus, and transparent with all the transactions on its blockchain being verifiable through services such as BScscan.[27] Moreover, the initial coins were distributed through the mining of blocks- which could be carried out by anyone with a Graphic Processing Unit (GPU) available within Personal Computers- further implying/meaning that bitcoins were openly accessible/earn-able by the public. Furthermore, and in direct contrast to Solana, Bitcoin is leaderless and since its inception in 2008 has never experienced any outages. To enact any change or upgrade to the Bitcoin network requires over 51% of the nodes on the network to acquiesce. Some criticisms have arisen that make reference to the top 6 (centrally managed) mining pools that when combined amount to over 75% of the total computing power in Bitcoin- a fact which would allow them to validate or cancel transactions, conduct double-spending and create coins from thin air.[28] However, the cold-undisputed truth remains that Bitcoin has never, since its inception, witnessed any such collusion that has resulted in a 51% attack- therefore, for all intents and purposes, Bitcoin stands as the apotheosis of decentralisation.

Conclusion

The conveniences afforded through the proliferation of the internet have simultaneously given rise to increasing avenues of centralised control to both national governments and monolithic state companies. In fact, Twitter Founder Jack Dorsey himself has grown despondent at this centralised nature of the internet and recently announced plans to create a new decentralised platform to combat it- terming this as the new Web5.[29] However, this article has also made clear how DLTs and their underlying crypto assets provide a unique solution to countering the growing threat of centralisation. Truly decentralised networks cannot be stopped by the government through some obscure law because the only law in crypto is ‘immutable computer code.’ Neither can cryptocurrencies on these networks be confiscated as they are private assets truly owned by the individual key holder. Governments are aware that DLTs and cryptocurrencies are a frontier they do not exercise sovereignty over and are actively adopting stances to oppose them. Therefore, it can be said that the true test of a DLTs decentralised nature will be to observe how each of them respond to increasing censorship from state and tech influence. It is the author’s opinion and belief that DLTs will remain relevant and continue to grow undeterred because digital assets and their underlying technology are firmly located at the heart of the next technological revolution that is reshaping the world across societies and economies.


[1] Andrews, Evan. 2019. “Who Invented The Internet?”. HISTORY. https://www.history.com/news/who-invented-the-internet.

[2] Morgan, Steve. 2019. “Humans On The Internet Will Triple From 2015 To 2022 And Hit 6 Billion”. Cybercrime Magazine. https://cybersecurityventures.com/how-many-internet-users-will-the-world-have-in-2022-and-in-2030/.

[3] Internetworldstats. 2022. “World Internet Users Statistics And 2022 World Population Stats”. Internetworldstats.Com. https://www.internetworldstats.com/stats.htm.

[4] D’sa, Douglas Daniel. “How has China been using Artificial Intelligence (AI) to build a digital system of Social Control in East Turkistan (Xinjiang)?.” (2021).

[5] Epifanova, Alena. “Deciphering Russia’s “Sovereign internet law”: Tightening control and accelerating the Splinternet.” (2020): 10.

[6] Eyvazi, Mohammad Rahim, Safiye Rezaee, and Mohsen Mohammadi Khanghahi. “The role of the national information network in strengthening the independence and national security in the second step of the Islamic Revolution.” Islamic Revolution Research 10, no. 4 (2022): 29-55. (double check this one)

[7] Williams, Martyn. 2022. “A Peek Inside North Korea’s Intranet”. North Korea Tech – 노스코리아테크. https://www.northkoreatech.org/2015/07/06/a-peek-inside-north-koreas-intranet/.

[8] Telford, Taylor. 2019. “Pinterest Is Blocking Search Results About Vaccines To Protect Users From Misinformation”. The Washington Post. https://www.washingtonpost.com/business/2019/02/21/pinterest-is-blocking-all-vaccine-related-searches-all-or-nothing-approach-policing-health-misinformation/.

[9] Ghaffary, Shirin. 2020. “Facebook Is Taking Down Some, But Not All, Quarantine Protest Event Pages”. Vox. https://www.vox.com/recode/2020/4/20/21228224/facebook-coronavirus-covid-19-protests-taking-down-content-moderation-freedom-speech-debate.

[10] Conger, Kate. 2021. “Twitter, In Widening Crackdown, Removes Over 70,000 Qanon Accounts (Published 2021)”. Nytimes.Com. https://www.nytimes.com/2021/01/11/technology/twitter-removes-70000-qanon-accounts.html.

[11] Twitter. 2021. “Permanent Suspension Of @Realdonaldtrump”. Blog.Twitter.Com. https://blog.twitter.com/en_us/topics/company/2020/suspension.

[12] The Zenon Team. 2020. “Network Of Momentum- Leaderless BFT Dual Ledger Architecture”. https://github.com/zenon-network/zenon.network/releases/download/whitepaper/whitepaper.pdf.

[13] ​​Florian, Martin, Sebastian Henningsen, Sophie Beaucamp, and Björn Scheuermann. “Erasing data from blockchain nodes.” In 2019 IEEE European Symposium on Security and Privacy Workshops (EuroS&PW), pp. 367-376. IEEE, 2019.

[14] Tulun, Teoman Ertuğrul. “SWIFT System Turns Into Economic Sanctions Instrument.” (2022).

[15] Lau, Yvonne. 2022. “They Fled Russia With Little Cash. Here’S How Cryptocurrency Saved Them”. Fortune. https://fortune.com/2022/03/30/russia-ukraine-war-cryptocurrency-sanctions-capital-controls-refugees-cash-oligarchs/.

[16] Taku, Nitasha, and Jeremy Merrill. 2022. “Ukraine Asked For Donations In Crypto. Then Things Got Weird.”. Washington Post. https://www.washingtonpost.com/technology/2022/03/03/ukraine-cryptocurrency-donations/.

[17] Cernera, Federico, Massimo La Morgia, Alessandro Mei, and Francesco Sassi. “Token Spammers, Rug Pulls, and SniperBots: An Analysis of the Ecosystem of Tokens in Ethereum and the Binance Smart Chain (BNB).” arXiv preprint arXiv:2206.08202 (2022).

[18] Orji, Chloe. 2022. “Bitcoin Ban: These Are The Countries Where Crypto Is Restricted Or Illegal”. Euronews. https://www.euronews.com/next/2022/04/27/bitcoin-ban-these-are-the-countries-where-crypto-is-restricted-or-illegal2.

[19] Varvello, Matteo, Inigo Querejeta Azurmendi, Antonio Nappa, Panagiotis Papadopoulos, Goncalo Pestana, and Benjamin Livshits. “VPN-Zero: A Privacy-Preserving Decentralized Virtual Private Network.” In 2021 IFIP Networking Conference (IFIP Networking), pp. 1-6. IEEE, 2021.

[20] PTI. 2022. “Cryptocurrency Could Be Used For Money Laundering And Terror Funding, Says Indian Finance Minister”. Business Insider. https://www.businessinsider.in/cryptocurrency/indian-finance-minister-says-that-cryptocurrency-could-be-used-for-money-laundering-and-terror-funding/articleshow/90933116.cms.

[21] Zheng, Zibin, Shaoan Xie, Hong-Ning Dai, Weili Chen, Xiangping Chen, Jian Weng, and Muhammad Imran. “An overview on smart contracts: Challenges, advances and platforms.” Future Generation Computer Systems 105 (2020): 475-491.

[22] Yakovenko, Anatoly. 2017. “Solana: A New Architecture For A High Performance Blockchain V0.8.13”. Solana.Com. https://solana.com/solana-whitepaper.pdf.

[23] Beach, Solana. 2022. “Dashboard | Solana Beach”. Solanabeach.Io. https://solanabeach.io/validators. Accessed on 6th September, 2022.

[24] Nicolle, Emily, and Bloomberg. 2022. “Solana’S Sixth Outage This Month—And Founder’S ‘Lol’ Tweet—Frustrates Traders”. Fortune. https://fortune.com/2022/01/25/solana-founder-anatoly-yakovenko-crypto-crash-blockchain-instability/.

[25] Watkins, Ryan. 2022. “Power And Wealth In Cryptoeconomies”. Messari.Io. https://messari.io/report/power-and-wealth-in-cryptoeconomies.

[26] Bitnodes. 2022. “Bitnodes”. Bitnodes.Io. https://bitnodes.io/. Accessed on 12th September, 2022

[27] Cernera, Federico, Massimo La Morgia, Alessandro Mei, and Francesco Sassi. “Token Spammers, Rug Pulls, and SniperBots: An Analysis of the Ecosystem of Tokens in Ethereum and the Binance Smart Chain (BNB).” arXiv preprint arXiv:2206.08202 (2022).  

[28] Gervais, Arthur, Ghassan O. Karame, Vedran Capkun, and Srdjan Capkun. “Is bitcoin a decentralized currency?.” IEEE security & privacy 12, no. 3 (2014): 54-60.

[29] Ramage, Jack. 2022. “Move Over Web3. Former Twitter CEO Jack Dorsey Wants To Launch Web5 Based On Bitcoin”. Euronews. https://www.euronews.com/next/2022/06/15/move-over-web3-former-twitter-ceo-jack-dorsey-wants-to-launch-web5-based-on-bitcoin.





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