Nikhil Pradhan (Senior Counsel, Boston) recently joined Zebec Networks’ Future of Money podcast to explore the intersection of artificial intelligence and the blockchain ecosystem with Parth Shah.
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— Zebec Network (@Zebec_HQ) April 4, 2024
Transcription
The below episode transcript has been edited for clarity.
Parth Shah
Welcome to The Future of Money series. For our listeners, Nikhil Pradhan is an attorney at Foley & Lardner, they are a leading law firm with nationally recognized practices in areas including securities, finance, commercial litigation, trademark, copyright, and business law. Nikhil, great to have you. Tell us a little bit about yourself and how you ended up at Foley & Lardner.
Nikhil Pradhan
Absolutely. So the majority of my practice is intellectual property and a lot of what I do is helping companies identify and protect their innovations across a variety of different technology areas, as well as navigate the protections that their competition has. And also support, you know, different kinds of collaborations. So licensing agreements, development agreements, things like that. As my career has progressed at Foley I’ve gotten involved a lot in the AI space, so helping companies that are either AI first, really at the cutting edge of these technologies, as well as looking to implement them into their existing platforms and use that to level everything up.
Parth Shah
So now that we’ve had a little bit about your background. What are you most passionate about in these verticals that you work in? What’s something that you really enjoy researching or working with on a daily basis?
Nikhil Pradhan
For me, and this is maybe a common refrain for a lot of people who work in this area, it’s really being able to learn about a lot of different technologies and see things that are at the cutting edge and how companies are deploying them and using them to solve customer problems and create real value in the market, especially when it comes to artificial intelligence and the financial space as well. It seems like, while things are still pretty early, there’s a real moment here where there are a lot of opportunities for these technologies to work together and really expand the reach of what customers can access and what tools they have available, democratize things that have maybe been centralized in the past or help people find ways to create value from the data they already have, the knowledge they already have, and kind of get a bigger platform for getting value for that.
Parth Shah
That’s great. Then how do you see the application of virtual assets, blockchain, and AI affecting the legal industry? And how does that somewhat carry over to the work you do on a daily basis? How does it affect the clients that you work with?
Nikhil Pradhan
Yeah, I think from the legal perspective, it’s interesting because there’s so much unstructured data that we’re working with – whether it’s conversations, emails, or just legal documents themselves. And there’s a lot of untapped knowledge in there where artificial intelligence could certainly help unlock that and generate insights, help people summarize things. And then on the on the digital assets side, it seems like things are still early, but so early there’s a lot of opportunity where there’s so much unstructured data out there when it comes to financials and in various forms of blockchain assets. And so if there are companies that are looking to build in this space and solve problems, ways that they can really do that might be finding ways to tap into the information that’s out there, structure information that might be spread across a lot of different areas right now.
I think another area that could be interesting and kind of combine all of these different fields together is fraud detection or cybersecurity and privacy where conventionally a lot of these activities were done in like a rules-based way or even manually. It seems like there’s an opportunity now where artificial intelligence could be used to, more accurately and with fewer resources, surface possible fraudulent situations. Then people who were managing that would have a lot more comfort and confidence that when they are trying to address certain situations, they know it’s already been filtered well and they can devote their attention to the most critical issues. As digital assets continue to get more traction and look to demonstrate their value to larger audiences, this seems like a great opportunity where companies can build better security, better antifraud practices into their technology and into their platforms. Being proactive on these matters is critical to handling any kind of upcoming regulations that might be in play, and they’ll already have the technology and solved some of these problems that are top of mind for a lot of people who are looking at these areas.
Parth Shah
That’s a good point you bring up. Grayscale, one of the leading bitcoin ETF managers, also released a piece where they said the intersection of AI and crypto is meant to eliminate the deep fakes that we’re seeing right now that occur because of AI. In other words, blockchain digital assets are used as the method to prevent fraud, and you would be able to do that with decentralized identities, cybersecurity, and better data ownership.
As you mentioned there’s a lot of unstructured data out there and what the blockchain can do is better organize that and feed it to consumers to make better informed decisions. And that’s something that Zebec also focuses on the payment side, we harp a lot on security. What we’re able to do is make transfers and payments instantaneously and seamlessly on the blockchain. You have access to it right away and the way we do that is by harvesting data and being able clean it up efficiently and monitor for fraud and deepfakes, which are now pretty widespread given the rise of AI. So, that’s a good point you bring up about security and AI, something we really try to focus on at Zebec.
Nikhil Pradhan
And what you emphasize there about decentralization, I think is a key point how digital assets can support AI technologies. So one example in the news right now is about large models being built on data that’s been scraped across the internet and people who created that data in the first place, especially if they’re artists, having concerns about “if I publish a piece of work online is someone going to come around and copy it and use it for their own purposes?” It’s really hard right now to detect if your artistic creations are being used to train an image model or your written works are being used to train a language model, and so there might be an opportunity here in a couple ways where blockchain-based technologies might be able to do more to provide traceability.
Another might be to actually compensate people with microtransactions, you might feel more confident in uploading your artistic or written materials to a database that has some sort of blockchain-based transactions associated with it where other companies that are looking to train [LLMs] might be able to actually provide value on a piece-by-piece level. It’s not that much money, but collectively across the whole corpus of data that is associated with these assets there could be a real market opportunity to connect content creators with the people who want to train on that material and avoid some of the concerns about that material just being taken for training and later used without any compensation for the creators in the first place.
Parth Shah
I think it would give a lot of consumers peace of mind doing that since there’s less of a chance of being of a victim of fraud. So that’s a good point. We briefly touched upon one of these trends in the market, which is AI and data and privacy and fraud, what are some other views that you have on the current market and broader industry dynamics. What’s your two-to-five-year outlook on the digital assets and blockchain and AI spaces?
Nikhil Pradhan
I think again it seems like the confluence of these areas is still very early, which is a common theme across many verticals where a lot of the hype and attention for AI or machine learning has been on the very fundamental technologies, especially the language models that have come out since the fall of 2022. And they’re just starting to be pointed towards vertical-specific problems that no one could solve before or were really challenging to address before. I think while things are still early now, over the next couple of years people will start identifying the really important problems that they can address with the technologies that have been developed so far. And from there build towards real solutions that create real values. So again, in this space, whether it’s concerns relating to fraud or privacy or better security or identifying specific problems where decentralization could be helpful, where transparency could be helpful, I think we’ll start seeing real good examples of solutions that create a lot of value coming out over the next few years.
Parth Shah
That makes a lot of sense. This could help pioneer the virtual assets space a little more and maybe get some more widespread crypto or digital asset adoption. Moving on, what do you think would be the iPhone moment for digital assets? What do you think is going to be the point where people across the world think digital assets are here to stay? This would become more of the norm, perhaps a shift from traditional equities to digital assets.
Nikhil Pradhan
I’m not sure I have a great example of where that could be. My sense is almost that it might not be a specific moment where all of a sudden blockchain-based assets are in hundreds of millions of people’s hands because of some sort of single tool or device has widespread use or a lot of different benefits for a broad group of people. It could be that a lot of different digital assets will start addressing specific needs for specific groups, which over time could coalesce to a level where many people will find them useful for some specific thing that they need in their day-to-day lives. And then you’ll start to see (even if it’s not like an iPhone moment necessarily) blockchain becoming a more integral part of the way they interact with the world, especially in financial situations or situations where they’re transacting some sort of data that they maintain or own or other kinds of personal or valuable information where it would be helpful to have a robust decentralized system in support.
Parth Shah
Yeah, it’s a great point that it might not just be one single moment. I think we’ve seen that recently with the bitcoin ETFs, they’ve been a big catalyst for a lot of people starting to adopt bitcoin and become more comfortable with investing in it. So I like your view on that. It’s a pretty interesting take. It’s not going to be a single moment, it’s going to be a period of time where people have to get comfortable with it.
Nikhil Pradhan
Going back to what you said, part of their value is almost abstracting a lot of the small decisions that people would otherwise have had to make in the past. They’re trying to manage a lot of different security measures on a one-by-one basis, and so maybe there’s an opportunity here where blockchain technologies can similarly generalize or abstract things that people know they could get value from but find it challenging in their day-to-day lives to manage at such a granular level. Having a robust platform to manage lots of different transactions in some way could be an interesting path forward.
Parth Shah
I totally agree. Well, I think that wraps up our discussion – we appreciate you taking the time to join our Future of Money series. We really appreciate your views on not just the legal space, but you shared a lot of good insights on data privacy and fraud and AI, and I think that’s something a lot of listeners can take into account when considering technology and tools of those sorts.
Nikhil Pradhan
Thanks so much for having me. It was great discussion. And you know, I think both the two of us and all of your listeners are very excited about this space. I’m glad to be part of the energy going here.