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. Here are the top 5 ways conversational AI is transforming the cryptocurrency industry.
1. Energy Consumption
Crypto mining is an incredibly challenging task and requires an unrealistic amount of energy and money to be executed with perfection. 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. 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 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 security. 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.
The privacy issue of ownership of personal data often raises strategic and regulatory concerns for competitive advantages. 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 and privacy breaches don’t make it to crypto news.
According to a 2016 estimate of Deloitte, the total running costs of validation and sharing of transactions on the blockchain network was as high as USD 600 million every year. 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.
There are various areas in which artificial intelligence is proving it’s worth. 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. However we should be very careful with this technology and of what we will let it carry out for us. There are, and always will be, certain areas, where human interaction is ireplaceable and we should not let AI intervene there. One of these areas is human community of like-minded people, which can be organized online, but can’t be replaced with AI.