## **What is Blockchain?** 

[](https://unsplash.com/photos/vBCVcWUyvyM)

![1a](https://www.maxinai.com/wp-content/uploads/2021/05/1a.png "The Potential of Merging AI and Blockchain 1")

Although the first idea about blockchain technology was described in **[1991](https://en.wikipedia.org/wiki/Blockchain)**, it took 2 decades until in 2008, the first real-world blockchain application, **[Bitcoin](https://www.investopedia.com/terms/b/bitcoin.asp)**, was introduced on the internet.

Blockchain is a digital database of transactions. It serves as a digital ledger that stores information in blocks. This information is copied and distributed over a network of computers.

Before a new transaction is added to a blockchain, it is validated by multiple computers that ensure the authenticity of the transactions, in this way, the system is protected against someone adding invalid blocks and transactions. 

This means that if someone sends digital coins to a friend, he/she cannot hack into the system and add additional transactions that did not take place.

Today, our digital footprints and our actions are constantly being recorded and tracked. Blockchain gives us the necessary anonymity while providing transparency and increased security.

So, while the transactions are public and can be seen by everyone, the true identity of the participants is not revealed.

## **What is AI?**

**Artificial intelligence (AI)** is another revolutionary technology that is changing the world. Its application has spread to almost every sector of the economy, boosting profitability and driving growth. 

Artificial intelligence is a computer system that performs tasks that traditionally require human intelligence.

Data is the key to making AI systems work. With the help of data, AI-powered systems can recognize patterns and make independent and intelligent decisions to obtain the best possible result.

With the right quantity and quality of data, AI offers the following benefits: 

* Saving time and costs by automating routine attacks
* Predicting the outcome based on historical data
* Eliminating human error
* Making faster and more accurate decisions

Exactly with the help of artificial intelligence, companies can forecast energy demand, identify diseases in the early stages, optimize operations and much more.

## **Benefits of merging AI and Blockchain** 

Now that we understand what blockchain and artificial intelligence are, let’s move on to real-world applications and the benefits of merging the two.

## **Enhanced computing power**[](https://unsplash.com/photos/FO7JIlwjOtU)

![1b](https://www.maxinai.com/wp-content/uploads/2021/05/1b.png "The Potential of Merging AI and Blockchain 2")

One thing that comes to everyone’s mind when we hear mining cryptocurrencies like Bitcoin, is a lot of processing power and electricity.

The process of “mining” means computers that solve complex mathematical problems in order to be rewarded with new cryptocurrencies. 

So to mine Bitcoins, for example, computers test all character combinations to guess the correct one and verify transactions.

The point is that the more miners join the network, the more difficult it will be for the computers to guess the combinations. Ultimately, this results in a need for more processing power and electricity for mining.

The way AI has the potential to improve the process is by handling mining in a smarter way. AI systems will be able to increase accuracy and efficiency every time they guess a correct combination, as they will have more experience, that is, the training data.

With such technology, we could save a huge amount of wasted energy and not only speed up the process, but also make it less expensive.

## **Explaining AI decisions** 

The decisions and actions taken by AI algorithms are difficult for humans to understand due to the large amount of data that the system can process in a matter of seconds.

Because of this, the AI decision-making process is like a black box for researchers. Since we cannot understand what happens during the process and how AI systems “think”, it creates a roadblock and restricts researchers from fully understanding why AI makes certain decisions.

As we know, every transaction on the Blockchain is recorded and can be traced. So if all the variables and processes used during AI decision making are recorded on the blockchain, we will be able to understand the logic of the system and inspect the entire process, from start to finish.

## **Data security**[](https://unsplash.com/photos/uPXs5Vx5bIg)

![1c](https://www.maxinai.com/wp-content/uploads/2021/05/1c.png "The Potential of Merging AI and Blockchain 3")

We know that data is the lifeblood of AI. Quality data is decisive to achieve the desired results and accuracy with AI systems.

In most cases, the data we feed into artificial intelligence systems is very valuable. Depending on the industry, it may include the patient’s health history, user banking information, and other sensitive data. Therefore, ensuring data security is vital for companies.

Secure encryption and reliable data classification is what blockchain is exactly four famous for. Combining it with AI, companies can have access to a secure data storage and management system.

Blockchain data encryption with a unique digital signature (private key) makes the system tamper-proof and highly secure, ensuring that only the private key holders can access the sensitive data.

## **Conclusion**

AI and Blockchain technologies are receiving increasing attention, but their combination remains unexplored. However, by merging AI and blockchain, they benefit each other with more efficiency and security.

Due to the immense potential that the fusion of these two technologies can generate, more and more companies are investigating it and planning to exploit it in the very near future.

Two of the hottest topics on the internet right now are blockchain and artificial intelligence. We keep finding news and articles about them almost everywhere.  While both of these technologies hold a lot of promise on their own, could they be even more powerful if they were merged? what makes AI and Blockchain so special to be in the spotlight lately, and what benefits would combining two such different technologies produce?  To answer the latter, we must first understand what Blockchain and AI are.

The Potential of Merging AI and Blockchain

Launching a cryptocurrency is challenging, especially considering the competition surrounding digital tokens. It’s hard to stand out and deliver a successful product that has increased usability and value for the customers. It’s even more difficult to achieve considerable success in the industry without building a strong foundation first. 

This challenge gets amplified even further when we factor in the time-consuming process of coin burn. Most owners burn a specific number of cryptocurrencies, but not all of them are capable of automating the process and increasing efficiency. 

More importantly, even the biggest crypto companies are vulnerable to the damage caused by suspicious accounts. Since digital tokens operate on blockchain and lack a central authority, it’s virtually impossible to protect the users from possible attacks and theft. Without an innovative solution, it’s difficult to limit the impact of digital threats. 

That’s why it’s so important to launch a cryptocurrency project with a bulletproof smart contract that includes usable features and specifications. It’s essential to come up with a mechanism that would maintain the value of the coin and protect the users at the same time. 

But how is it possible to make the coin burn less time-consuming? How can the owner mitigate the effects of suspicious activities?

## **What is coin burn and why is it necessary?**

Coin burn is the process of destroying a certain number of cryptocurrencies. To remove them from circulation, coins are usually transferred to a specific Burn wallet that receives transactions but doesn’t allow withdrawal. 

The main reason why it’s necessary to burn coins is to prevent inflation, which is caused by supplying excessive numbers of currencies. By reducing the supply, it’s possible to increase the value of the cryptocurrency or guarantee an increase in value in the future. 

Burning the coins manually can be a time-consuming process, as it requires the users or the owner to transfer crypto to the Burn wallet regularly. Manual burning can decrease the efficiency of the contract and create significant vulnerabilities. 

## **Why are suspicious accounts jeopardizing security?**

Cryptocurrencies are launched on the blockchain – a secure network that makes it possible to execute safe transactions. Yet even blockchain isn’t impenetrable to digital attacks and malicious accounts that conduct dishonest activities. 

Without a central authority overseeing the transactions, suspicious accounts can steal funds from the users or the owners.

## **Dude Coin – An innovative non-profit cryptocurrency**

MBMX recently launched a new cryptocurrency – Dude Coin. It’s a non-profit incentive that aims to help people gain financial stability. The owners collaborate with charities and donate all the earnings to underprivileged individuals, children, and families.

Before launching the Dude Coin, MBMX needed a company of professionals who would help in the process of smart contract development. They wanted to partner with a team that would deliver a high-quality smart contract with innovative features. That’s how MBMX ended up partnering with MaxinAI.

## **MBMX Universe partners with MaxinAI**

MaxinAI is a [blockchain development company](https://www.maxinai.com/blockchain-development-services) with extensive expertise in smart contract development, AI, Big Data, and software development. With multiple success stories and comprehensive crypto knowledge, we were an obvious choice for the client. 

As MBMX was preparing to launch a new coin, they approached us with the request to develop a smart contract. They wanted to optimize the process of burning the crypto and implement some sort of security mechanism that would prevent the theft of money. 

To deliver a bulletproof smart contract, we put together a team of professional developers. We gathered the talents with an innovative mindset to tackle the challenges of the project. 

Our solution for the optimization of coin burn was to automate the process using the Gelato Network. We came up with a mechanism that would trigger the network and burn a pre-determined number of coins daily. We also created a BurnWallet contract that would only be accessible to the owner. 

To tackle the security challenges, we also implemented an account freezing function in the smart contract. With this function, the owner can freeze the accounts that conduct suspicious activities. For example, if an account steals funds from other users, the owner can freeze their assets and make it impossible to use stolen assets. 

In collaboration with our client, we decided to use the Polygon platform. By doing so, we optimized the smart contract and reduced transaction fees (i.e. gas). 

To make sure the project would be successful, we had to take the following steps in the process:

1. Receiving the requirements from the client to plan the project accurately;\
2. Working on the written documentation required for the smart contract and confirming the details with the client;\
3. Creating an initial version of the smart contract and deploying it to the Testnet;\
4. Conducting an external audit of the smart contract and correcting any deficiencies;\
5. Showing the smart contract to the client and receiving final requirements;\
6. Auditing the smart contract once again to confirm that changes were implemented correctly;\
7. Deploying the final smart contract on Mainnet and transferring ownership to the client.

Throughout the whole process, we maintained a clear network of communication with the client. We provided recommendations regarding the best ways to tackle the existing challenges, particularly with burn automation and account freezing function. 

Smart contract development for Dude Coin took about a month to complete. The project was medium in terms of difficulty, which is why we were able to deliver it in such a short amount of time. 

The success of the project was demonstrated through a comprehensive smart contract audit. We always use external auditing services to prove the quality of our products. During the audit, we discovered minor errors that were easily corrected. We conducted the audit once more to ensure the final smart contract would be bulletproof. 

By auditing the smart contract before launching it to the blockchain, we empowered the client to showcase their reliability and build trust among their customers. 

At the end of the project, the client confirmed that all of their requirements were successfully implemented.

## **Next steps in our partnership**

MaxinAI and MBMX are continuing their partnership. With the trust we built throughout the previous project, we’re taking new steps toward the future of our partnership. This time we’re working on a project that includes the development of a unique ERC20 smart contract. 

Do you want your project to be just as successful as the Dude Coin? Schedule a consultation today, get started with smart contract development and we’ll help you build a strong foundation for your project!

At MaxinAI, we always come up with state-of-the-art solutions. This time we partnered with C-Devs to help MBMX develop a smart contract with an account freezing function and an automated coin burn. 

MaxinAI x DuDe Coin: Advanced Solutions for Smart Contract Development

# What are DApps?

Dapps’ full meaning is Decentralized applications. Peer-to-peer networks are used to power this type of program. For ease, they also include a user interface. These P2P applications function similarly to ordinary apps but are constructed using smart contracts on a blockchain. During the first inception of the blockchain, its creators wished to give their invention more utility. DApps become unique apps linked to blockchains as a result. 

DApps are the software section that interplays with the blockchain and controls the state of every user on the network. The fundamental principles of a decentralized app are shown via smart contracts. DApps have the same standard website, or mobile app user interface as any other app. The front end of a decentralized app is developed to depict what users would see, while the back end is designed to accommodate all business logic. 

Decentralized apps come in a variety of forms. There are cryptocurrency-specific financial applications first. These DApps let users exchange crypto and manage money via blockchains. Real-world enterprise connection is another field of application. For instance, logistical organizations utilize DApps to manage their shipments and leverage smart contracts to automate numerous procedures.

The most widely used platform for DApps is Ethereum Although; there are some lovely substitutes as well. Some top DApps platforms in 2022 are Tron, Cosmos, EOS, and NEO.

## What are smart contracts?

[Smart contracts ](https://www.maxinai.com/smart-contract-and-blockchain-audit-company)are programs kept on a blockchain network and only operate when specific requirements are met. They are commonly employed to carry out agreements between parties, providing immediate results without wasting time or needing an intermediary. When certain conditions are met, smart contracts are automatic algorithms that streamline the following activity to continue the operation.

They work by executing instructions such as “if, when, then,” which are written into the code of a smart contract. Upon verification, the actions are carried out by a network of member computers.

Transactions between parties, sending updated alerts, registering a car, and issuing tickets are a few of these responsibilities. The blockchain is promptly updated after the procedure is finished with the inclusion of a new block. Additionally, after it has been added to the chain, the transaction data cannot be changed, and only members with access rights can view the results.

Several sectors now make use of smart contracts. For instance, they have gained popularity in finance due to their practicality. Smart contracts provide an alternative to conventional contracts and agreements. Smart contracts are utilized in gaming for in-game purchases, particularly now that crypto and NFTs are more popular. In addition to other fields, smart contracts can be applied in law and real estate.

Due to its significant contribution to the advancement of smart contracts, Ethereum is regarded as the primary smart contract platform. Several excellent alternatives you could consider, some of the leading smart contracts platforms in 2022 are Binance smart chain, Polkadot, Solana, and EOS.

![](img/ethereum-smart-contract-2.png)

## What Characteristics Do DApps and Smart Contracts Possess?

It could be challenging for newbies to comprehend DApps, smart contracts, and other blockchain-powered solutions. If you examine them more closely, they are not all that complicated. These are DApps’ primary characteristics:

* – Tokens are required for users to access DApps.
* – They are based on blockchain.
* – They have decentralized open-source code as well.
* – Listed below are some features of the smart contract:
* – They are based on blockchain.
* – Only under specific circumstances do these programs operate.
* – They run on automated systems.

Listed below are some features of the smart contract:

* – They are based on blockchain.
* – Only under specific circumstances do these programs operate.
* – They run on automated systems.

## What is the difference between DApps and smart contracts?

Some of the differences between Apps and smart contracts are listed below:

* – Backend code for decentralized applications is run on the decentralized program; in contrast, a smart contract is a piece of code for a DApp. Simply put, a DApp works by connecting a member with a supplier directly using smart contracts.
* – Decentralized apps, to put it simply, are computer programs that combine smart contracts with a front end to function as a whole. However, smart contracts only make up a minor percentage of DApps.
* – Smart contracts serve as API connectors that link decentralized applications (DApps) with the blockchain; on the other hand, decentralized apps are blockchain-powered sites.

## What do DApps and smart contracts have in common?

DApps and smart contracts are automated and run on a decentralized network; no single governing body has any authority over them. Due to their shared use of the Ethereum blockchain, these two systems were once regarded as one. Although they are closely related, smart contracts and DApps are different.

## What Function Do Tokens Perform in DApp and Smart Contract Processes?

To utilize a decentralized program, tokens are required. DApps need tokens specific to each DApp even when developed on Ethereum or another blockchain. These tokens effectively serve as a unique form of money. For instance, when playing a video game, you can pay real money to buy in-game cash. To enjoy the functionality of DApps, you must purchase tokens. In contrast to many cryptos, they are also inexpensive and accessible. As a result, using tokens when interacting with DApps is more practical and effective.

Cryptocurrencies and virtual tokens are transferred through smart contracts. Some tokens even function as smart contracts. For instance, the ERC-721 token for Ethereum is a smart contract in and of itself. Not all smart contracts, meanwhile, are tokenized. On Ethereum, there exist smart contracts that can carry out their functions without using tokens.

## Frequently Asked Questions (FAQs)

- - -

### How Do Smart Contracts and DApps Interact the Same Way?

DApps and smart contracts interplay with a blockchain similarly to how classic applications and webpages interplay with their databases. DApps employ smart contracts as an API to connect to a blockchain, whereas a standard app serves as the front end and links to a database through API.

### What Are the Differences Between DApps and Smart Contracts?

Smart contracts link DApps to the blockchain. Conversely, DApps are similar to programs or sites connected to a blockchain. Smart contracts operate like an API.

### What Characteristics Do DApps and Smart Contracts Possess?

Smart contracts enable the automation of several contracts while maintaining their accuracy and transparency. The costs are also decreased as a result of smart contracts. Decentralized apps (DApps) are those created on the blockchain that is not under the control of a centralized authority.

### What Characterizes DApps and Smart Contracts as Similar?

Technologies created and operating on a blockchain include smart contracts and DApps. However, the fascinating question is, how do a DApp and a smart contract interact if they aren’t the same? These two systems are distinct from one another, but they are nonetheless seen as almost the same on the Ethereum blockchain. They are linked to this system, which they use to carry out tasks.

## Final Thoughts

Since its inception, blockchain technology has advanced significantly, but the journey is far from complete. 

Firms struggling in today’s competitive marketplace can learn how to use blockchain components in their operations effectively, and they will experience advancement. They will not merely make progress, but they will also distinguish themselves from their competitors. To gain benefits, they must start with a solid knowledge of decentralized apps and smart contracts and put those concepts into practice.

Therefore, all a company needs to do to help a brand stick out is comprehend unique features and implement them before rivals do.

Blockchain technology is the best solution if you want to transform your company digitally. It has efficiently produced robust impacts in the technological world since its start.  Programs such as smart contracts and decentralized applications (DApps) leverage blockchain technology to offer practical solutions for various sectors. The good news is that firms can embrace it without spending much money. This sounds pretty fantastic. Many firms still, nevertheless, fall short of creating magic and getting the most out of it.   Decentralized apps and smart contracts are two technologies made for distinct tasks, even though they are still regarded as being comparable. We’ll highlight some fundamental differences between the two blockchain technologies in the paragraphs below. Read on to grab the details below.

What’s the difference: DApps vs Smart contracts

[Non-fungible tokens](https://www.maxinai.com/resources/non-fungible-tokens-benefits-use-cases) are becoming more and more popular and for good reason. NFTs are a new way to create, own, and trade digital assets. They’re unique, like cryptocurrency, but unlike crypto, NFTs can represent anything from art to real estate. This makes them perfect for businesses that want to add a new dimension to their products or services.

Have you been thinking about adding NFTs to your business but don’t know where to start? In that case, this blog post is for you! We’ll show you how NFTs can benefit your business and how to get started with them.

## **What is an NFT (non-fungible token)?**

![what is an nft](https://www.maxinai.com/wp-content/uploads/2022/03/What-is-NFT.jpg "How to Kickstart Your Business with NFTs 1")

An NFT is a type of cryptocurrency that represents a digital asset. The word non-fungible means that each NFT is unique and can’t be replaced by another NFT. This is unlike cryptocurrency, which is fungible, meaning each unit is interchangeable with another unit.

For example, let’s say you have a digital art piece that you want to sell as an NFT. When someone buys it, they’re buying the unique file that represents the artwork. They own that file and no one else can replace it or copy it.

The greatest benefit of NFTs is that they are stored on a blockchain, which is a decentralized network of computers that keep track of NFT transactions. This guarantees that NFTs can’t be counterfeited or double-spent.

## **Benefits of NFTs for businesses**

Now that you know what NFTs are, let’s look at some of the benefits they offer businesses.

**New way to generate revenue** – NFTs provide a new way for businesses to generate revenue. If you have a digital product or service, you can now sell it as NFT. For example, companies in the music industry can commercialize their songs as NFTs.

**Attract new customers** – NFTs also offer a way to attract new customers. By offering NFTs, you can tap into a whole new market of potential customers who are interested in this new technology.

**Increased engagement** – NFT is one of the hottest topics on social media right now. This gives companies a great opportunity to increase their engagement, as people are paying more attention to NFTs right now.

## **How can businesses get started with NFTs?**

![How to get started](https://www.maxinai.com/wp-content/uploads/2022/03/How-to-get-started.jpg "How to Kickstart Your Business with NFTs 2")

It’s time to move to the most important part of this blog post – how can businesses get started with NFTs? How can they boost their operations with this new technology?

### **Link physical products with NFTs**

One way companies can get started with NFTs is by linking physical products to NFTs. For example, if you are in the clothing industry, you can create NFTs that represent your clothing. Customers can then purchase the NFT and receive the physical product or vice versa – receive an NFT after purchasing a physical product.

In this way, you can create a new source of income and attract NFT enthusiasts to your business.

### **Proof of authenticity**

Another way NFTs can be used by businesses is to provide proof of authenticity. This is especially important for businesses that sell products that are prone to counterfeiting, such as luxury goods.

By selling your products as NFTs, you can provide customers with a digital certificate of authenticity that is stored on the blockchain. This not only ensures that the product is genuine but also shows the full history of the product, from manufacturing to sale, giving customers peace of mind.

Luxury brands are seizing the opportunity to verify the authenticity and provenance of expensive assets. For example, [LVHM](https://www.coindesk.com/markets/2019/03/26/louis-vuitton-owner-lvmh-is-launching-a-blockchain-to-track-luxury-goods/), a luxury goods manufacturer, is developing blockchain authenticity tracking technology so shoppers can check the history of a high-priced item from anywhere in the world.

### **Use it as access to your services**

NFTs are not only made for physical products but also for digital services. If you offer a digital service, such as online courses, NFTs can be used to give customers access to your content.

How could this work? Holders of your NFT could unlock and view your exclusive content or use your services by connecting their [crypto wallets](https://www.maxinai.com/service-from-defi-wallet-development-company) to your website and proving that they own the NFT.

This is a great way to increase customer loyalty and engagement, as well as prevent content piracy. Consider how much money Netflix and other US streaming video services lose each year because of password sharing ([$6 billion](https://www.fiercevideo.com/video/netflix-loses-6b-a-year-revenue-due-to-password-sharing-analyst) a year, to be exact). NFTs might be the answer to this problem.

### **Supply Chain Management**

NFTs can also be used for the supply chain management. By tracking your products on the blockchain, you can provide customers with a transparent view of your product’s journey, from manufacturing to delivery.

This is not only good for customer relations but can also help you track and manage your inventory more effectively. NFTs can help businesses save time and money by streamlining their supply chain.

### **Fundraising for expansion**

Are you planning to expand your business and wondering how to raise the necessary funds? Before you go to the bank or approach investors, consider NFTs. NFTs can be used to raise funds for business expansion.

One way to do this is by selling NFTs that represent shares in your company. This is similar to how traditional companies sell shares on the stock market; however, instead of selling paper certificates, you would be selling NFTs.

By selling NFTs, you can attract a whole new group of investors who are interested in this new technology.

### **Conclusion**

NFTs are a hot topic right now and offer businesses a great opportunity to increase their engagement and attract new customers. NFTs can be used in various ways, such as providing proof of authenticity, linking physical products with NFTs, or selling NFTs that represent shares in your company. NFTs offer a great way for businesses to streamline their operations and save time and money.

Are you considering using NFTs for your business but don’t know where to start? You are not alone. NFTs are a new technology, and there are not many resources available.

But don’t worry, we can help you. We offer complete [blockchain services](https://www.maxinai.com/blockchain-development-services), from NFTs to [smart contracts](https://smart-contracts.maxinai.com/). We have a team of experts who can help you get started with NFTs and take your business to the next level. Contact us today for a free consultation to learn more.

The business world is constantly evolving thanks to new technologies. First, it was the internet, then social media, followed by artificial intelligence, and now we have NFTs (non-fungible tokens).

How to Kickstart Your Business with NFTs

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