Artificial Intelligence and Bitcoin Interactions You May Not Know About
We often talk about Artificial Intelligence (AI) whenever we look at Bitcoin or its blockchain technology. AI has been the “next big thing” for some time now and this is what often generates more interest in cryptocurrencies like Bitcoin. However, many people think that AI will render blockchain technology useless.
For instance, think about how useful blockchain technology might be if artificial intelligence can solve those complex algorithms at lightning speeds. People who are fearful of AI implementation or involvement in the crypto world, please be informed that AI is already here. However, AI might not be doing the things they think it probably would have.
As a Trading Tool.
AI is now already being used in almost every traditional financial market. Many investors and traders are dependent on artificial intelligence in order to make profits on their trades. Since the stock market is nothing but an endless supply of empirical data, it makes perfect sense. Any kind of work that includes machine learning will have lots of empirical data. AI is the perfect match for the stock market. It should not be a surprise that AI is making a splash in the Bitcoin market.
Please note that unlike the traditional stock markets, the cryptocurrency market doesn’t require a lot of empirical data. While AI’s progress is slow in the crypto world, it’s already the go-to solution for most traders. For instance, automated platforms like the BitQS App, make use of algorithmic trading. This means it will perform trades automatically for the user and it will not take into account human bias. The execution of trades is based solely on trends, signals and clear instructions.
High-frequency trading (HFT) has become very popular in the world of cryptocurrencies. This is another area in which AI can play a huge role. HFT will involve analyzing identified technical data over a number of different exchange platforms. The main aim is to perform trades faster in order to take advantage of price swings across cryptocurrency trading platforms.
AI can be very useful here because of the high influx of empirical data. As mentioned above, it can also be used as an automation trading tool. With the help of AI trading tools, traders can customize the software’s decision-making by selecting unique indicators, setting time frames and price limits. The decision-making should become better with time. There will then be less need for human supervision and involvement.
For now, Artificial Intelligence is a very useful tool that’s becoming more and more involved in the crypto world. However, AI cannot be used for solving blocks on the blockchain in order to obtain Bitcoins through mining. It is a common misconception, but please note that AI or machine learning cannot be used for the process of mining. For solving blockchain algorithms you will require strong computing power but the process of solving these complex problems cannot be performed by AI.
An Interesting Similarity?
It is important to know how power-hungry the process of mining Bitcoin really is. Solving those complex computational problems will require a lot of energy and powerful computers. As a result, it also creates a lot of heat or it transforms that energy into heat. It will not just result in solved blocks on the blockchain.
What most people do not realise is that in a similar way, AI technology or machine learning is also another way for converting energy into heat. The incredible computing power that is needed for advanced machine learning algorithms could eventually go beyond the requirements of crypto mining.
If sometime in the future, it would be interesting to see, both AI and blockchain technology being used for highly efficient electricity to heat conversion applications. For the time being, both Artificial Intelligence and blockchain use similar chip technologies.
Can Artificial Intelligence And Blockchain Go Together?
Artificial Intelligence is considered a blessing by the traders and the investors. With the help of AI the crypto market can enjoy the same benefits as traditional financial markets. Market of Bitcoin and cryptocurrencies is known for being highly volatile. Using machine learning algorithms that can absorb unlimited data should help us deal with the well-known volatility of the crypto market.
It will still take some time to see whether or not both technologies will go hand in hand in any of the other areas. If AI becomes more advanced and once the energy demands become easier to handle, it could have a huge impact on the world of cryptocurrencies.