Almost every industry in this age is on the verge of being overpowered by Artificial intelligence (AI). The cryptocurrency industry is not any different. AI has crept into several fields, and every organization is gradually becoming more machine-inclined. AI is an enhanced form of human intelligence; It is the footstool of technology. It mirrors what blockchain is to cryptocurrency. In general, cryptocurrency, including its underlying blockchain technology, has been subject to significant changes. This article will analyze the existence of AI in the industry, the impact it is predicted to have on cryptocurrency in the future, and its possible effect on human traders.
You might be wondering what the cryptocurrency is and how it works. Cryptocurrency is the fastest growing medium of exchange. It can be termed as token money or virtual currency, which is used for carrying out transactions on digital outlets. Some of these prominent currencies are; Bitcoin, Ethereum, Litecoin, to mention a few.
Although not dominant, Artificial intelligence already positioned itself in the market, and its technology facilitates the devices of many enterprises. Within some cryptocurrency facets, it is assumed that there are too many external factors for artificial tools to survive. However, with the development of software that could produce trillions of trading algorithms quickly, AI will eventually triumph.
The pros of introducing AI to the industry are numerous. These are the most-often cited benefits of implementing AI in cryptocurrency enterprise.
EFFICIENCY AND PRODUCTIVITY
The incorporation of AI ensures efficiency and productivity gains. The technology handles tasks at a scale that humans cannot match. It removes these tasks from the responsibility of human traders and leaves space for them to perform other higher-value tasks. Considering that enterprises connected with AI generate about 15-50% additional funding than other tech projects, You can deduce why companies are willing to align their plans with AI. Machines will consistently derive more accurate insights than humans.
The trading or investment process is considered one of the riskiest tasks in the financial world. Cyber-frauds and attacks by hackers continue to increase. While it is near impossible to hack the blockchain network, its deeper layers lack adequate security. This is where AI comes in handy.
The AI programs used to perform trades can process information at a pace that is far beyond the capability of the human mind. These programs are developed to spot trends, entry signals, and any alterations much more efficiently than smart traders. AI enables the sorting of extensive data in a short period. Investment decisions can also be taken in less time and instantly produce results.
NO BIAS AND EMOTIONLESS TRADING
AI assists investors in making logical and rational decisions. While there are many other possible reasons for the recent downfall of bitcoin, Psychologists believe that the major force was the emotions of traders. Human psychology is the biggest flaw of any trader. They become emotionally invested in trades, adjust their stop-loss orders, use ridiculous lot sizes. Machines, however, lack the emotional capacity to make these emotional judgments.
AI is not a remedy that can literally be applied to every nook and cranny of the cryptocurrency market and realistically speaking; it is not going to render the efficient human traders redundant overnight. Several analyses regarding AI in cryptocurrency are driven by hype, but some studies prove that AI is slowly but significantly shaping the industry. AI is becoming a more reliable technology that helps cryptocurrency to be seen as stable and less risky. The integration of AI and cryptocurrency will make transaction executions easier, limitless, and diversified. Artificial intelligence is the future of cryptocurrency.