The provided text is an excerpt from a podcast episode titled "Technical Foundations of AI-Driven Smart Contracts," which serves as Part 2 of a series. The hosts and a guest expert explain how AI and blockchain technologies merge to create intelligent, self-executing contracts. They first clarify the technical workings of traditional smart contracts, including their reliance on decentralized blockchain networks and consensus mechanisms, while also highlighting the critical need for security audits. The discussion then shifts to integrating AI, explaining how off-chain AI computations often feed data via oracles to enhance smart contract decision-making, such as in decentralized insurance. Finally, the episode addresses the challenges of computational cost and data integrity, proposing solutions like Layer-2 scaling and blockchain-based reputation systems to ensure the practicality and security of AI-powered smart contracts.
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