Each time we talk about artificial intelligence and machine learning, there is a lot of controversies, especially from those who have probably watched one too many movies and believe that computers are taking over. You really need to leave Terminator themes to Hollywood if you are of this school of thought. There are so many reasons why computers will not take over, but that’s a discussion for another day. However, we will explain something interesting behind computing, machine learning, and artificial intelligence – Data!
Data is the heartbeat of artificial intelligence. Without data, machine learning and AI as we know it is dead. These systems are built to learn and operate autonomously, but if you feed in the wrong training and testing data, your model will return the wrong results. Therefore, computers can learn all they want, but one thing is certain, they don’t just need data, they need the right kind of data. There really is no way computers are taking over. Now, let’s stretch a bit and bring in Bitcoin and the crypto world in general. How does AI come in? What impact does AI have? More importantly, since we are building AI to help make our work easier by automating mundane tasks, how is AI helping investors in the cryptocurrency market? Of course, we are looking at a profit angle here. So, let’s dig in!
Automating the Blockchain
When we mention AI, the first image that comes to the mind of a lot of people is robotics. There is so much more to AI than that. Financial service providers currently use AI models to detect and prevent fraud, and in many cases, geniuses who try to manipulate the market. This is something you will notice so much if you are keen on hedge funds and their operations. Everyone seems to be taking advantage of tech in one way or the other. What are you doing about it?
Cryptocurrency has been around for years. However, many people got with the flow after 2017. This was the year you either made a killing selling your Bitcoin or you sat back and watched a real-life movie of people making millions overnight. Since then, interest in the blockchain has peaked, and a lot more people are learning to invest using automated systems, or trading bots. As simple as that, AI is already in play.
There are many people who have made millions in the cryptocurrency world, but they hardly know the workings of the market. Other than that, they probably don’t even have the slightest knowledge of tech. So how are they doing it? It’s simple really, they’re tapping into the potential of AI. There’s so much we have learned about AI over the years and its potential in cryptocurrency that we, at CoinCheckup do believe it is wise for any investor to consider learning about the influence AI has on their crypto investments. Here are some of the benefits investors enjoy from AI.
Prediction and Forecasting
The crypto market is a highly volatile market. The market can be calm the whole day and turn into a chaotic environment in a few minutes before calm is restored. Therefore, as an investor, you need innovative tools and techniques to navigate through this environment. This is where AI comes in.
Using neural networks, there are many tools in the market at the moment that can help you make accurate predictions regarding your investment. These tools monitor the market on a 24/7 basis. They make predictions and use data analytics for decision making almost every minute.
Intense Trading
AI models can trade faster and better than you can. There is no doubt about this. These models are designed to identify and exploit price surges in the market. To do this, they have to look at technical indicators in different markets wherein your portfolio is spread. At the same time, they must also use that knowledge to execute trades in different exchanges so that you can take advantage of your position instantly. When working with these models, you feed them instructions based on your investment goals, and they act on them if the market indicators are in your favor.
In-depth Analytics
However good you believe you are, you cannot analyze the entire financial market with the same speed and precision that AI models can. You need the appropriate cryptocurrency software to help with this. Take sentiment analysis, for example. This is purely about opinions. AI models scour the internet for sentiments on different assets, then make decisions based on that. At the same time, they also monitor search engine trends. This is not something you can do on your own.
While still on sentiment analysis, it is only human that you get swayed by your personal opinion. If you do this on your own, chances are high that you might not act accordingly, given your biased opinion based on the assessed sentiments. This alone is enough to make you delay on executing a move in the market, which will either cost you a fortune or prevent you from taking advantage of a good position.
From videos to discussion forums, social media posts, blogs and so on, AI models do all the donkey work for you. They do all this without emotional attachment, personal or personality bias and anything else that might impede your clear judgment. From here, they make a simple decision, whether to buy or sell, how much and when.
As an investor in cryptocurrency, one of the most important things you can do is embrace change. Change is indeed inevitable, and at times you have to be the change you want to experience. You might not have an inkling for AI or machine learning, but as long as you are interested in cryptocurrency investments, you have to open up to the possibility of learning. Besides, you don’t really have to learn everything about AI. You are not building one. All you need to know is the basics of how they operate, the strategies they use and anything else that affects your investment.
