How is artificial intelligence applied to the cryptocurrency world?

artificial intelligence applied to the crypto world

The world of blockchain technology is here to stay, being the application base for smart contracts, certain types of cryptocurrency assets and more.

We are in a new paradigm where new technologies have begun to modify the way in which business is carried out from every point of view, from within the company through digital transformation processes applying the use of so-called artificial intelligence. even outside the company with customers.

Likewise, the world of blockchain technology is here to stay, being the application base of smart contracts, certain types of crypto assets and more.

Now, how artificial intelligence can be applied in the world of the crypto market is one of the questions that we will address in this article.

Since its inception, coinciding with the international crisis of 2008 and the associated lack of trust in the financial system, bitcoin has gained an important place in the international financial landscape, attracting wide media coverage, as well as the attention of regulators, government institutions, institutional and individual investors, academia and the general public.

For example, “What is bitcoin?” was the most popular Google search question in the US and UK in 2018. Another example is the December 2017 launch of bitcoin futures contracts by the Chicago Board Options Exchange (CBOE) and the Chicago Mercantile Exchange, which is indicative of the traditional financial industry’s attempt not to distance itself from this market trend.

Although initially designed to be a peer-to-peer electronic means of payment, bitcoin and other cryptocurrencies created later, quickly gained a reputation for being purely speculative assets. Their prices are mostly idiosyncratic, as they are mainly driven by behavioral factors and are not correlated with the main financial asset classes; however, its informative efficiency is still under debate.

Consequently, many hedge funds and asset managers began to include cryptocurrencies in their portfolios, while the academic community devoted considerable efforts to researching cryptocurrency trading, with an emphasis on machine learning algorithms.

Artificial Intelligence Cryptocurrencies

Cryptocurrencies world in hands of the artificial Intelligence

The success of bitcoin, measured by its rapid market capitalization growth and price appreciation, led to the emergence of a host of other cryptocurrencies (e.g. altcoins) that most of the time differ from bitcoin in only a few parameters. (for example, blocking time, supply scheme and currency issuance). By now, the cryptocurrency market has become one of the largest unregulated markets in the world, totaling, as of July 2020, more than 5.7 thousand cryptocurrencies, 23 thousand online exchanges and an overall market capitalization that exceeds 270 billion dollars.

Also, being able to determine the sentiment of the cryptocurrency market requires processing a large amount of different data. This includes articles, blogs, forums, and even comments below them.

One of the problems of the cryptocurrency market is the lack of liquidity. Strong exchange rate fluctuations make digital currencies not very attractive as business payments.

The difference between supply and demand is often offset by high fees from exchanges and banks. To solve the problem, platforms such as TradeConnect, which uses machine learning technology, are being used. It uses a side comparison protocol and helps the client find the right broker and bank, transact directly, and pay minimal fees.

Individual companies are specifically engaged in the development of artificial intelligence platforms related to the provision of services in the cryptocurrency market. For example, the Money Token team created artificial intelligence assistant Amanda, who will make loans to members of the crypto community.

The virtual assistant will be able to provide cryptocurrency secured loans and deal with full support, from the time of application to the full payment of the loan.