Ethereum Co-Founder Proposes New Blockchain Application for AI Services

Vitalik Buterin, co-founder of Ethereum, has alongside Davide Crapis, introduced a groundbreaking research proposal. This explores the application of blockchain technology in billing systems for artificial intelligence (AI)-based services. The proposal does not suggest executing widely-used language models on blockchain. Instead, it focuses on utilizing blockchain as a privacy-centric layer for payment and settlement in digital services.

What Innovative Billing Approach is Being Proposed?

At the core of Buterin’s plan is an advanced infrastructure that enables anonymous payments for multiple API calls using blockchain. Users would deposit stablecoins upfront, while zero-knowledge proofs authenticate each API call to maintain both security and user anonymity.

How Do ZK API Usage Credits and RLN Mechanisms Influence This Proposal?

The proposal introduces “ZK API usage credits,” which operate via RLN, a zero-knowledge-based tool. Originally designed to combat spam, RLN now facilitates anonymous prepayments for multiple API requests. This ensures users can transact without identity disclosures, safeguarding privacy.

Under this framework, users can prepay, depositing a set amount of USDC for a specified number of API transactions. Each request verifies remaining credits on-chain, preventing duplicate spending. Should any attempt to reuse credits occur, the RLN method automatically enforces a financial penalty by withdrawing part of the user’s stake.

Key features of this system include:

• Efficient ‘multi-call per deposit’ logic for scalable operations.
• Linking transaction checks to user account verification rather than total query volume.
• Option to refund unused credits with rebate tickets, enhancing flexibility.

The stablecoin market’s substantial liquidity—currently over $307.6 billion—provides a supportive financial base for this prepayment model. With Ethereum’s layer-2 solutions now processing thousands of transactions per second at low costs, the technical groundwork appears set for this innovation.

However, critics of the proposal highlight its shortcomings in guaranteeing full privacy. Despite secured anonymity, metadata could potentially be used to trace users. As it stands, the proposed RLN mechanism is still under development, requiring further advancements before practical deployment.

“While promising, the approach still needs development to fully ensure user anonymity and seamless integration with existing systems.”

For successful implementation, widespread adoption by API and AI service providers is crucial. They would need to integrate on-chain payment mechanisms and endorse stablecoin transactions. Transitioning to a blockchain-based system involves overcoming entrenched traditional payment methods and regulatory frameworks, suggesting a gradual evolution.

Buterin’s vision redefines Ethereum’s function in the AI realm, shifting from direct application execution to acting as a neutral base for settlement processes. If embraced, this model might boost stablecoin activities and enhance transaction volumes on Ethereum’s scalable networks.