Top 5 ways conversational AI is transforming the cryptocurrency Industry
AI and blockchain have undeniably been two of the most significant technologies that have catalyzed the pace of innovation and acquainted every industry with radical shifts.
1. Energy Consumption
Crypto mining is an unbelievably challenging task that takes an incredible amount of energy and resources to be correctly performed. With the AI having already proved its efficiency in maximizing energy consumption, little question remains about AI achieving similar results for crypto-mining. In fact, this would result in less spending in mining equipment, which is currently burning a hole in the pockets of the miners. With an improvement in the performance of the device, it would be possible to convert any piece of hardware for the use of neural nets, although partially at times.
The blockchain technology that the cryptocurrency operates on is steadily growing every 10 minutes at a speed of 1 MB. It has already elevated more than 100 GB. The "blockchain pruning" was first described by Satoshi Nakamoto as a possible solution for removing unnecessary data on completed transactions to ensure that the entire blockchain is not on a single computer. However, AI may bring in new decentralized learning systems, such as federated learning, to improve the overall system performance. New techniques for data sharding can also go a long way towards ensuring that the objectives of scalability are achieved to the fullest.
Although breaching the blockchain network is nearly impossible, there is inadequate protection for its further layers (e.g., Bitfinex). Here's where AI comes in. In the last few years machine learning has made incredible progress. It makes AI the perfect ally to ensure a safe implementation of applications for the blockchain, especially considering the fixed structure of the framework. Enhanced protection will also allow crypto-coins to find their way into any worldwide crypto-monetary list.
The problem of personal data ownership as regards privacy also poses strategic and regulatory issues for competitive advantages. The Enigma Project, the Zerocash Project or the Homorphic encryption are potential solutions to the privacy issue. However, this issue's interconnectedness with scalability and security means it goes hand-in-hand with those issues. Hence, fusing AI with cryptocurrencies would ensure that its privacy is not breached, and violations of privacy will not render it cryptonews.
According to Deloitte's estimate for 2016, the overall running costs of validating and exchanging transactions on the blockchain network were as high as USD 600 million annually. Considering the likelihood that other miners would shut down their efforts for a particular operation and reduce overall costs. An intelligent system may be able to instantly calculate the probability of different nodes performing a mission. Moreover, despite the presence of certain structural constraints, faster transactions can be achieved through enhanced efficiency and lower energy consumption, which may bring about a reduction in network latency.
There are different areas where artificial intelligence is proving valuable when it comes to automated trading. Among these are high frequency trading (HFT), which relies on analyzing technical indicators across different exchanges to respond much more quickly to market-moving trades than the rest of the market. For example, if a trader was forced to place a large purchase of Bitcoin on Kraken, HFT might arrange for an order to be executed on another exchange immediately so that the price spike could be capitalized on, thus removing the issue of dead crypto coins.
Artificial intelligence can neither function as a panacea that can be used to make up for every weakness of the cryptocurrency industry, nor will it render obsolete immediately to the brightest human mind. Today, it has already started to exercise a lot of influence within the sector. Its ability to promote everything from faster order execution to bot detection and scammer recognition has helped to dramatically change the crypto-currency industry.