Artificial Intelligence and Cryptocurrency: Separating Hype From Reality

Artificial Intelligence and Cryptocurrency: Separating Hype from Reality
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For the past decade, two of the most commonly discussed topics are Artificial Intelligence and Cryptocurrencies. Both are part of something bigger where both play a huge role in that area, something that experts claim that we would not see any progress in the future.

What about combining them? Before we do that, first we should define AI and Cryptocurrencies to be able to explain how we can combine them both.

The Companies Cashing in on the AI Craze

Artificial Intelligence or AI for short is a portion of computer science dedicated to making machines smart. As cliché as this might seem, with the help of complex code, a powerful enough machine will be able to “think” in regards to certain things that it is programmed about. The AI field has progressed to the point where machines can conduct actual conversations with human beings.

AI Is Already Here – It Just Isn’t Evenly Distributed

Cryptocurrencies are a form of digital currency which is based on a technology called blockchain. The entire principle behind them is to have a decentralized platform where online transactions can be carried out. A little over ten years ago, the first cryptocurrency was “invented” as a byproduct of Satoshi Nakamoto’s idea to provide the world with a peer-to-peer money transfer system. Since then, the number of cryptocurrencies has gone up, hitting a four-digit number.

How AI Is Being Applied Within the Cryptosphere

If someone mentions combining Artificial Intelligence and Cryptocurrencies, most people would be scratching their head thinking how could those two be put in the same basket. What they don’t know are the many applications in which artificial intelligence can help the cryptocurrencies.

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One of the most obvious applications of artificial intelligence in the cryptocurrency field is the trading track. The principle behind this is that the machine can make predictions regarding a certain cryptocurrency. Depending on the programming and the amount of data that the AI would have it would be able to make “educated guesses” if a certain cryptocurrency can rise or fall. The advantage that the AI would have over a human is that the AI will provide unbiased “opinion” for that certain cryptocurrency.

The second reason why artificial intelligence can and should be implemented into the world of cryptocurrencies is the cost. Contrary to popular belief, machines that run the artificial intelligence code are much more cost-effective than humans. Take the trading section for example. Having a group of financial experts tracking the marking will cost any company thousands of dollars weekly. Take that upon a yearly lever, and it could very well reach millions. Artificial intelligence, on the other hand, doesn’t require a weekly paycheck, meaning that with onetime purchase of the machine and the development team, the company can replace an entire team of financial experts with a single piece of hardware.

Trading with cryptocurrencies is at the top, if not the most, risky business in the modern era. Relying on humans to make the predictions and sometimes the transactions, you are putting your assets in the hands of a stranger who you have no option but to trust completely. Implementing artificial intelligence in that segment completely avoids any risk of your assets getting in the wrong hands, with you losing them.

On the topic of frauds, in recent years we have witnessed several occasions where some individuals manipulated the market with an intent to make a cryptocurrency crash or rise. Regardless of how careful you are, this is something that no one can predict – no one except artificial intelligence. Honestly, the AI isn’t a clairvoyant and will not see something like this happening before it does, but it will be able to react immediately. If someone makes a big order on a certain cryptocurrency, almost always the price will spike, which in return can cause other cryptocurrencies to drop. In that kind of situation, artificial intelligence will be able to react instantly by executing orders on another exchange. In the end, that is what will maintain the balance and will avoid market manipulation.

Conclusion

Artificial Intelligence is still something out of a science fiction movie. We cannot get a grasp of its full potential and still consider it as something unknown. In the long run, the AI is the one thing that will be able to provide us with aid in aspects of our society where us humans fail.

What's Your Thought On This?, Let Us Know In the Comment Section Below.

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