Artificial Intelligence and blockchain technology have undeniably been two of the most important technologies that have revolutionized the pace of innovation and acquainted every industry with radical shifts.
There is almost no industry that has remained untouched from the impact of blockchain technology. Cryptocurrency industry is entirely one of the by-products of this technology. Although extremely powerful, blockchain and cryptocurrencies are not perfect. They both have limitations, too. While some of them are technology-related, others are a result of the old-minded culture that the financial services sector bred for ages. However, all of them can be influenced by AI in one way or another.
Within the smaller cryptocurrency sector, there’s an assumption that there are too many exogenous factors for AI-based tools to have an edge. While every technology has its share of technical complexities and business implications, using them together can help in redesigning the entire human and technological paradigms from scratch.
This article will help you understand the potentialities realized through the intersection of blockchain technology and the conversational (AI) Artificial Intelligence.
What is Conversational AI?
Conversational AI is a set of technologies that enable computers to understand, process, and respond to voice or text inputs in natural ways, and is typically used in conjunction with bots or intelligent virtual agents (IVAs). Done well, it helps people interact with complex systems in faster and easier ways and helps businesses deliver personalized engagements and support at scale. Devices are getting smaller, and menus, systems, and apps are growing increasingly complex. By replacing traditional UIs with human-like dialogs, companies can make customer experiences simpler and more intuitive, and make employee workflows faster and more efficient.
Here are the top 5 ways conversational AI is transforming the cryptocurrency industry.
Mining doesn’t scale very well. In order to increase profits, you need to invest in more and newer machines. Sometimes you have to invest to just stay above the break-even. Your best bet is your personal expansion rate beats the competition increase rate, a strategy that often turns out to be too expensive for ordinary “hobby” miners. The blockchain technology, which the cryptocurrency operates on, is consistently growing at a pace of 1 MB every 10 minutes. It has already raised over 100 GB. Satoshi Nakamoto first mentioned “blockchain pruning” as a possible solution for deleting unnecessary data on completed transactions to ensure that the entire blockchain isn’t on a single laptop. However, AI can bring forth new decentralized learning systems like federated learning, to enhance the overall efficiency of the system. New data sharding techniques can also go a long way in ensuring that scalability goals achieve to the fullest.
While it is almost impossible to hack the blockchain network, its further layers lack adequate and sufficient security features. This is where AI comes into play. Machine learning has made incredible progress in the last couple of years. It makes AI the perfect ally for the blockchain to ensure a secure deployment of applications, especially considering the system’s fixed structure. Enhanced security would also enable crypto coins to find their way into any cryptocurrency list in the world.
3. Energy Consumption
Crypto mining is an undeniably challenging task and requires an overwhelming amount of energy and money to be executed with perfection. The legend says there were times where getting into crypto mining was a piece of cake. Meaning you didn’t have to sell your old Toyota or Nissan for a dedicated computing rig. Just download the client on your laptop, plug yourself to the network and it’s on.
But these days are long gone as crypto mining has turned into a full-fledged industry. What was once an obscure hobby for the tech nerds, is now a cut-throat business, where staying afloat requires regular price-heavy investments.
With the AI already has proved its efficiency in optimizing the energy consumption, there remains little doubt over AI achieving similar results for crypto mining. Moreover, this would lead to lower investments in the mining hardware, which currently burns a hole in the miners’ pockets. With an increase in the system’s efficiency, it would become possible to convert some piece of hardware, albeit partially at times, for neural nets use.
The privacy issue of ownership of personal data often raises strategic and regulatory concerns for competitive advantages. The Enigma Project, the Zerocash Project, or the Homomorphic encryption are potential solutions to the privacy issue. However, the interconnectedness of this issue with scalability and security means that it goes hand-in-hand with these problems. Therefore, fusing AI with cryptocurrencies will ensure that its privacy isn’t compromised.
Considering the possibility of other miners shutting down their efforts for a specific operation and reducing the total costs. An intelligent system might be able to compute the probability to particular nodes performing a task instantly. 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 several areas in which AI is proving its worth, especially when it comes to automated trading. Artificial intelligence can neither serve as a panacea that can be applied to fill in every limitation of the cryptocurrency industry, nor it’s going to render the brightest human minds become worthless overnight.
Nevertheless, it has already begun executing a great deal of control within the crypto sphere. Its ability to facilitate everything from faster order execution to bot detection and scammer identification has helped it in transforming the cryptocurrency industry to a significant extent.