Cryptocurrency is always changing, never saying in one place for too long. One of the biggest changes in recent crypto history has been the introduction of artificial intelligence (A.I).
From improving upon security, improving trading strategies to revolutionising blockchain development and user experiences, A.I. is reshaping just about every aspect of the crypto industry. As cryptocurrency continues to gain popularity and heads towards main adoption, understanding how A.I. is playing a part in the sector is crucial for investors and developers.
Crypto trading – Better strategies means better results.
One of the biggest changes bought around by the introduction of A.I. into cryptocurrency is in trading. Crypto markets are well known for being highly volatile, more often than not they move unpredictably and are influenced by a complex mixture of factors. A.I. driven trading bots are now being put to world by investors across the globe. These are allowing investors to rely on the power of A.I. to smarter trading decisions, giving them an edge in a increasingly competitive market.
A.I. algorithms comb through a large amount of data and do so in real-time, quickly picking up on trends and patterns that are invisible to the human eye. By comparing this with historical data, interest from social media and even with the global economic indicators, these bots can make precise, well informed predictions and execute the trades with remarkable speed and accuracy.
Examples of such bots are found on several A.I. trading platforms that have been launched in recent times. These include 3Comma, CryptoHopper and Pionex. These platforms have become increasingly popular amongst traders base on the ability to leverage machine learning models to optimise strategies, reduce risk and maximise on returns.
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A.I. is shaking up the security of crypto.
No matter who you ask, one of the major concerns related to cryptocurrency is security. Having to manage a wallet with potentially hundreds if not thousands of pounds worth of assets in can be stressful. The threat of scans, hacks and phishing attacks only makes people even more nervous of entering the crypto markets.
A.I. is playing a key role in strengthening security measures across all digital asset platforms.
A.I. systems can identify strange or unrecognised transaction patterns, detect the location of any activity on an account and take action if it doesn’t match that of the account holder and flag potential threats before they escalate. By taking advantage of the machine learning models we mentioned above, crypto exchanges are able to implement advanced fraud detection software that is able to monitor thousands of different transactions in real-time, something that no person, or group of people would be able to do in the same timeframe.
Looking at the market & making predictions.
Predicting the crypto markets is something that many people have attempted to do over the years. It is such a hard task because of the sheer amount of data and different factors that can change the price of a cryptocurrency. Combing through that amount of data, verifying the sources and making sense of it all can be very over-whelming.
With the introduction of A.I. this has become a lot easier. A.I. excels at collecting and processing large amounts of data, providing traders and investors with the insights that were previously only a pipe dream.
A.I. tools are able to scan through all social media platforms, news reports and other websites that people are discussing a certain crypto and assess the general reaction to a project. By then combining this data with the technical indicators and price history, A.I. is then able to generate accurate price predictions, helping those interested make a much better, more informed decision regarding their trading or investing than ever before.
Helping the everyday user.
As more and more people become interested in cryptocurrency and want to start on their journey, the services related to all of the various exchanges and wallets are finding themselves to be in an increasing level of demand.
A.I. is now helping with improving the usability of these platforms and even playing a big role in supporting the user base.
A.I. powered chat bots are used on most of the major platforms, such as Binance, Kraken and Coinbase. These bots allow the user to get access to instant support, answer questions and even guide new users through the steps of opening wallets, completing transactions and selling their assets.
Recently, they have also started recommending investment opportunities depending on the users trading history, or the contents of their wallet. This allows the user to be directed to projects that may interest them more than just sitting and wondering what their next investment could be. While it is able to recommend projects, A.I. is also able to tell you when you should consider staying away from a project, reducing the risk of users falling victim to crypto based scams.
What does the future have in store?
While the partnership between cryptocurrency and A.I. is going strong, the possibilities of how far it could go are nearly limitless. As machine learning models grow more sophisticated, trading bots are likely to play an even larger role than they do today and will most likely be used by the majority of traders around the world.
In the not so distant future we should expect A.I. to power more advanced trading systems, automate more of the blockchain mechanisms and create new predictive investment models that change the way we trade not only cryptocurrency, but traditional investments as well. Add to this A.I.’s ability to vastly improve the security around peoples assets and you seem to be looking at a win-win scenario.
Crypto Analyst‘s Final Thoughts.
There is no getting away from A.I. at the moment. It feels like everywhere you look there is a company or a product trying to push A.I. into your brain. While some of this isn’t always for the best, there is a reason why the world is so focused on A.I. The potential is almost something we have never seen before. Professionals have predicted that A.I. could have a greater impact on the world than the launch of the internet. Let that sink in for a minute.
By users embracing these innovations, the crypto markets and industry as a whole can unlock new levels of efficiency, better security and continue to grow for years to come.