Artificial Intelligence (AI) has been a revolutionary trend across all industries and sectors. Even though it’s still in early development per se, that didn’t prevent AI from gaining access to various systems and processes. Any industry that embraced AI claims that this technology is the next step towards greater improvements and innovations.
Even the cryptocurrency industry has started to rely on AI and its capabilities. The main reason is that AI can not just yield significant improvements to the entire crypto industry, but it can also change the mindset of people who are still skeptical about cryptos and the concept of decentralized digital assets, in general.
Just because something is not regulated by governments and traditional financial institutions, it doesn’t make it any less effective. That said, the blockchain technology behind cryptocurrencies is already said to be capable enough to revolutionize entire business processes, just like it’s said about AI.
Therefore, when these two technologies join forces, they can surely open new doors that will provide numerous other opportunities. With that in mind, here are a few ways AI is transforming the crypto industry.
Nowadays, every cryptocurrency is based on the blockchain technology it was originally created for. In order to record and verify every transaction ever made, the blockchain is constantly growing. As a matter of fact, the blockchain grows 10MB per minute, and it has grown past 100GB over the years. So far, no one has been able to deal with the issue of unnecessary data that’s been compiled so far.
The creator of the blockchain technology Satoshi Nakamoto mentioned the so-called “blockchain pruning” as a possible solution to ensure that the blockchain doesn’t loop endlessly. However, AI technology can provide a more feasible solution that will enable more efficient scalability. As a matter of fact, AI can introduce new data sharding techniques that will allow scaling goals to be achieved effectively.
One of the surest ways to get your hands on a cryptocurrency was to mine it, thus helping the blockchain record and validate transactions with ease. However, over the years, the blockchain algorithms for solving the block became more complex and more difficult to solve. That said, mining has become increasingly expensive, and power consumption is through the roof.
So far, AI has been able to ensure energy efficiency throughout various sectors, and it can do the same for mining crypto. That being said, efficient crypto mining with the help of AI would become more eco-friendly, and miners would no longer have to spend an arm and a leg on expensive hardware. In other words, AI can be used to properly optimize the entire mining process for cryptocurrencies.
Blockchain technology prides itself on being virtually impossible to hack. Although nothing is impossible to hack, when it comes to blockchain, things tend to get very complicated. The fact of the matter is that one would have to take control of the majority of nodes within a blockchain at once. Cybercriminals today simply lack the computing power to do so. However, there are still layers of the blockchain, such as trading platforms and e-wallets that lack the proper security measures.
These drawbacks made people untrustworthy towards cryptos, in general. Still, AI technology can mend this issue sufficiently. That said, AI advancements and improvements regarding machine learning-powered security had made significant progress over the years. AI can, therefore, ensure more than adequate security measures for the entire blockchain, as well as fix any vulnerability that might plague the system.
Although blockchain serves as a decentralized public ledger, its network is still expensive to maintain. As a matter of fact, the average costs of sharing and validating transactions over the blockchain network reach as far as $600 million per year. What’s more, the network relies on peers to operate properly. That said, the lack of optimization results in high latency throughout the network.
AI can once again provide a solution through proper optimization of the entire system. As you already know, AI’s machine learning and deep learning capabilities have received significant improvements over time.
Today, AI can introduce an intelligent system that can complement the entire blockchain network. Instead of relying on peers alone, the blockchain network can perform tasks instantaneously with the help from AI. This will lower the overall costs, make transactions much faster, reduce energy consumption, as well as vastly reduce the network’s latency. Artificial intelligence promises to revolutionize entire industries as we know it. The crypto industry is no exception in this matter. The blockchain technology behind cryptos is also revolutionary and it’s being developed further, so that it can be implemented into various other systems and processes. AI can greatly speed up the process and help the crypto industry not only reach new heights but also regain the trust of the people and investors alike.
An author of Namaste UI, published several articles focused on blogging, business, web design & development, e-commerce, finance, health, lifestyle, marketing, social media, SEO, travel.
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