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AI and Cryptocurrency – How They Can Work Together Effectively

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AI and Cryptocurrency – How They Can Work Together Effectively

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There will soon come a time when artificial intelligence will be running on top of cryptocurrency systems like Blockchains with its capability to increase machine learning capacity and create new financial products. It will take the technology leaps and bounds further in making it one of the mainstream emerging technologies.

According to the research being conducted about the future of AI, the market is estimated to grow to a whopping $190 billion worth of industry by 2025. Considering how much the market is expected to grow, Blockchain and AI convergence are inevitable.

Both the emerging technologies have been around for a decade now and deal with data and value. Where Blockchain enables a secure storage and sharing path of data, AI analyzes and generates significant insights from data to create value.

Having such similarities, there is no doubt that both the technological realms can be merged to create a more advanced and efficient machine learning blockchain system to benefit the masses. Let’s have a look at how Blockchain and AI are a perfect match.

How Blockchain and AI Is the Perfect Match

The following are some key pointers and examples that evidently showcase how combining Blockchain and AI is a consequent step forward in the right direction for increased efficiency and profitability.

Blockchain connecting with the AI basics

Firstly, it is essential to know that most of the hype surrounding startups integrating Blockchain with artificial intelligence is exactly just that, hype. Such companies are far too young and inexperienced in the industry to be talking about a big game. With few clients and less commercialization, it is understandably not possible to carry out such advance convergence.

The majority of such companies have raised money through the initial coin offering or the ICO. This means that the solutions they offer are as thoroughly evaluated as they would have been had the company raised a significant amount of venture capital money.

However, it is quite so possible that these companies may become successful in the future, but until then, they just create useless hype about the advancements in this technology.

Many people limit the usage of Blockchain technology and associate it with just cryptocurrency transactions. As a digital ledger that can record economic transactions, Blockchain can be expanded to virtually record almost anything of value.

There can be both public and private blockchains. Where the public ones are open to the public, the private or ‘Permissioned’ blockchains are restricted for usage by ‘invitation-only’ and mainly used in the corporate environment. This also makes them faster than public forums as the users are mainly trusted and verified personnel making the transactions verifiable faster.

One of Blockchain’s more important features is that it allows even the unrelated parties to carry out a transaction and share data through a mutual ledger. As cryptography validates the transactions, it makes it more efficient for participants not to rely on third-party evaluators to carry out a transaction. Deploying cryptography ensures that data transactions are secure, incorruptible, and irreversible once recorded.

Artificial Intelligence is not a term making rounds for a decade now. It very much comprises of every new technology that has near-human intelligence to carry out a task. AI models are used to assess, understand, classify, and predict using relevant data sets. Machine learning then cleanses the data as it gathers insights creating better useful data sets for use.

As it is evident, data is the central component to AI and Blockchain that allows a secure and collaborative effort towards data sharing. Both Blockchain and AI ensure the trustworthiness of data and extract valuable insights from it.

How Microsoft is Improving Machine Learning for Blockchain

According to the research conducted at Microsoft, the company is working on finding out ways to design efficient collaborative machine learning models hosted on public blockchains. The incentive behind this effort is to make AI decentralized and a more collaborative forum using Blockchain.

While there is no doubt that advances are being made in machine learning, the benefits that are being created as the results of these efforts are not as openly available. The masses have limited resources and cannot always access cutting-edge technology such as machine learning systems.

Such systems are highly centralized and used as the proprietary datasets. Not only are they costly to recreate, but even the best models can become outdated if not consistently refreshed with new data.

The idea is to allow advanced AI models and bigger datasets to be easily accessible, sharable, updated and retrained to increase the adoption, acceptance, and overall effectiveness of AI. People will soon be able to adopt this easy and cost-effective method to run and access advanced machine learning models through regular devices such as laptops and smartphone browsers and collectively participate in improving data sets and models.

Therefore, Microsoft is keen on developing what they call a Decentralized & Collaborative AI on the Blockchain framework. It will significantly increase AI community collaborations to retrain such models with valuable datasets on public blockchains. The machine learning models would be made free for public use as they would know the code they are interacting with.

Some applications that Microsoft is looking forward to integrating are virtual assistants and recommender systems like used by Netflix to recommend shows to its audience. Considering such models, Blockchain makes sense because of the increased security and how trustworthy it is for the participants.

The well-established nature of the blockchain system and the associate smart contracts ensure that the models will always perform up to the specific requirement. As the models are consistently updated on the Blockchain used unhinged by the user’s local device, every user gets to see the one genuine version of the model.

Hence, even though Microsoft’s framework isn’t favorable for operating at large scale for now, but sooner or later, it will be the norm. There is little to no doubt that organizations like Microsoft are doing advanced research and practical work to converge AI and cryptosystems like Blockchain. There is no doubt that cryptocurrency is the future of money. So it is in the best interests of the organization to start working on merging Blockchain and AI for improved benefits.

How can an organization merge Blockchain and AI?

Just as Microsoft, more advancement is made for combining Blockchain and AI for fulfilling specific usage requirements. Such cases will depend on the company’s specific needs, but the core preference would be related to data. This will allow companies to improve their digital and data capabilities by developing a combination of AI and Blockchain solution to fit their operations.

The very first step needs to be taken by the executives to identify the specific business needs and whether creating an AI and Blockchain system would address that need. This can become easier if the organization has already worked on AI and taken initiatives in other operations because now you can integrate Blockchain to improve them.

Similarly, if the company owns valuable data, they can monetize by converging a blockchain environment and sharing the data with AI model creators. For instance, a progressive car company like Tesla probably has a good collection of valuable data collected by its cars. They can put it on a blockchain system as their self-driving cars will continue to collect huge amounts of data that they can use to improve the neural networks powering self-driving operations and functions.

With a trusted name as Tesla, the public would not be too complacent about maintaining their privacy. Blockchain would allow the company to make the driver information anonymous to ensure privacy while collecting data to improve neural nets in use.

The company can even share anonymous data with car insurance companies. It would allow the insurers to price their insurance packages for self-driving cars more efficiently and with an educated mind, given how the risk profile of a self-driving car is different from that of a regular car.

The whole packaged win-win situation here is that where the company would improve its cars, the public would get advanced transportation, complete privacy, and the right insurance for the right price without getting exploited.

Using Digital Investment Assets for Trading through Blockchain

You must be already aware of how Blockchain is already a ready-made, and good-to-go digital ledger used to store and trade financial instruments such as cryptocurrencies and cryptographic tokens. However, Blockchain is still a nascent technology, been only around for a few years. Where cryptocurrency has definitely taken the world by storm, cryptographic tokens are comparatively more nascent.

Hence, it is evident that there is no probable activity and enough data yet to apply AI to financial products like a cryptocurrency that are traded through Blockchain. However, the upgrading technology and data sets show a promising future for AI taking insights from these data sets to create financial products and trade them autonomously.

How can an organization merge Blockchain and AI?

The convergence of artificial intelligence and Blockchain would be a huge step forward, and the process will cover four distinct yet inter-linked stages.

Stage I: Proof of concepts

Stage II: Asset tokenization

Stage III: Digital Investment Assets DIA

Stage IV: AI agents trading DIA

The four stages will represent how Blockchain is proof of concepts initially. On the second stage, assets are tokenized and traded. Tokens can represent underlying security methods, physical assets, cash flows, and utilities. This reduces the alleged transaction cost and decreases the time taken for settlement to improve audit accountability.

AI and Blockchain Applications

There is no denying that a decade back if someone would have presented us with an idea of magical internet money called crypto in the future, we would have laughed and made fun of the person for coming up with Superman and Kryptonite theories. Fast forward to ten years down the line, and cryptocurrency not only exists, but there are real-world integrations of its blockchain system with AI.

Smart computing power

Think of a machine learning code that would upgrade and retrain when given the right data. That is exactly what AI affords the users to tackle tasks more efficiently and intelligently.

Diverse data sets

The combination of Blockchain and AI can create smarter and decentralized networks to host various data sets. Creating a blockchain API would enable the intercommunication of AI agents resulting in diverse codes and algorithms to be built upon diver data sets, ensuring development.

Data protection

It doesn’t matter if data is medical or financial. Certain data types are too sensitive to be handled by a single company and their coding system. Storing such data on a blockchain and accessed through AI would give its users a huge advantage of personalized recommendations, suggestions, and notifications while securely storing data.

Data monetization

Data monetization would make both AI and advance Blockchain easily accessible to smaller companies. As of now, developing and growing AI is costly for organizations, especially those who do not own data sets. A decentralized market would create space such companies for which it is otherwise too expensive.

Trusting AI for decision making

AI is growing smarter with time. Through the use of blockchain systems like crypto, transactions will become smarter, making the process easier to audit.

Conclusion

All in all, the collaborative effort of blockchain technology and AI is still majorly an undiscovered territory. One of the main reasons why we still have yet to see a commercialized joint adoption of the Blockchain system and artificial intelligence is that the upscale implementation of their convergence is quite challenging.

Many businesses, although having ventured on with AI, are skeptical when it comes to conjoining Blockchain. They are in their early stages for testing the waters for AI and Blockchain coming together in isolation. As they continue to figure it out for appropriate public distribution, the convergence of the two technologies has had its fair share of scholarly attention as well. Yet still, projects solely developed to promote the groundbreaking match are still primarily not catered to.

There is no doubt that the potential of this combination is clearly there and developing, but how it will play out for future public use can be anybody’s call.

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Claudia Jeffrey is currently working as a Junior Finance advisor at Crowd Writer, an excellent platform to get assignment help UK. She is a self-proclaimed crypto-influencer. She has gained significant expertise and knowledge in this regard over the years and likes to share it with an interested audience.

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2020 Global Challenges for Cryptocurrency

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Blockchain, Bitcoin, and Cryptocurrency are some of the terms that you must have heard at some point in your life. Especially in the past decade or so, cryptocurrency became the talk of the global economic forums. As many authorities began to question the future of monetary assets, money, and similar resources, cryptocurrency was among the more controversial topics.

In 2019, right before Blockchain could have seen a public acceptance phase, the revolution came to an abrupt halt. According to the Gartner Group, it was called ‘Blockchain fatigue.’ Other experts also jumped on the bandwagon that the fire of Blockchain technology and virtual currency, in general, has fizzled out. People thought maybe it was a phase after all that overstayed its welcome.

Pragmatically, the perspective is incorrect. According to recent statistics, the crypto market has an estimated total market capitalization of over $155 billion as of 15th March 2020. Considering these numbers and based on many financial institutions, powers might tend to disapprove of cryptocurrency, but they are in favor of Blockchain technology. The disruptive nature of decentralized currencies such as Bitcoin and others has led to a corresponding halt to its progress.

Let’s find out what more challenges do cryptocurrency has to face as the year 2020 goes by.

Challenges Hindering Cryptocurrency Growth and Acceptance Worldwide

The following are the challenges hindering cryptocurrency growth and acceptance on a global scale.

1.  Boom Phase for Blockchain

There is no doubt about the fact that where cryptocurrency is facing the challenge of surviving and being accepted by the masses, Blockchain technology has already surpassed it. The masses have widely accepted it, and big names of global trade specialists are now moving towards Blockchain.

The likes of Trade Lens by IBM and Maersk’s joint Blockchain investment in the shipping industry have welcomed the first-ever initiative taken. Many such mind-blowing initiatives are underway that involve Blockchain apart from the cryptocurrency domain. The challenge for crypto-enthusiasts here is that once the Blockchain technology takes off without crypto, it will be the end to it.

2.  Bad Imagery

Cryptocurrency, even after having gone through a boom phase, still has a PR problem. The terms associated are enough to conjure up images of cringe advertisements, low-quality campaigns, bad actors, get rich quick schemes, and criminals alike. For many people, cryptocurrency spells out new technology for age-old scams and frauds, which they don’t want any.

It may seem like a petty issue, given the magnitude that is a cryptocurrency and the Blockchain industry. However, this issue has hindered crypto for years since its inception and will continue to do so if no knowledgeable individuals came forward in favor of it.

3.  Blockchain vs. Authorities and Officials

US constitution is known worldwide for its protection right given to the democratic entity that the country is. Freedom of speech, access to information, and the right to form an opinion is protected by the officials to be open. However, on the flip side, when it comes to assets and financial resources, our system laws, governments, and authorities are designed to keep it limited amongst the powerful.

It is evident why crypto and Blockchain has taken over a decade to adjust in an economy where it had to tackle issue arising from the core of how our economy and society operates.

a. Lack Of Legislation

Digital currencies are decentralized virtual entities. They are purely digital products, and our authorities are not geared to handle this advanced technology. That is why the lack of legislation regulating these digital currencies and providing any sort of user protection has become a huge challenge.

The essential step that needs to be taken to reduce the risk involves educating and informing people about keeping their personal data safe. There is still a gaping void where insurance and dedicated legislation needs to be placed. But until that happens, awareness to safely exercise crypto is crucial.

b. Legal Obstacles

In addition to lack of legislation, the other big obstacle that stands in the way of cryptocurrency holders like Bitcoin traders and users is the challenge to spend their holdings. The untraceable nature of Bitcoin and its bad imagery as a mode of finance for mega criminal activities like terrorist attacks and the drug trade has made it quite scandalous in some countries.

Cryptocurrency is going through a period of abrupt halt where nothing much seems to be happening around the technology. Therefore, one can’t say for sure that what the future holds unless wide acceptability affects these legal obstacles standing in the way of crypto-trading.

4.  The Technology Is Still Immature

Cryptocurrency faces implementation obstacles beyond the lack of regulation and inactive obligations. The technology is an emerging one and is still immature in a system where other options are widely scalable and accepted over it.

One might think how a technology that has been out there for over a decade now can be new and emerging. The reason is that not much has been done to expand it.

a. Interoperability

Interoperability or the ability of computer system software to exchange and utilize information is a challenge faced by Blockchain. The technology has been divided to make multiple uses of it in different industrial domains, separate form cryptocurrency.

The technology needs to be made interoperable for the internet dedicated to Blockchain and crypto exchange. Until then, as long as people continue to go by illegal and wrong means of mining it, the technology is a threat to the economic system that opens its gates to accept virtual currencies.

b. Usability

This point cannot be emphasized enough how difficult it is to buy and sell crypto. We are way in the year 2020, and it is still as difficult as it was back in the day when Bitcoin was first launched. The mere participation in the crypto world requires a nerve-wracking validation that general people find unappealing.

The security procedures are so complex that they have become hurdles in crypto adoption as a mode of exchange. Most students look for personal statement help UK who have a high interest in cryptocurrency markets but unable to compose a compelling profile.

It is still a significant challenge for the industry to create user-friendly processes for buying, selling, storing, and using cryptocurrency securely without being called out for it.

c. Scalability

The generally acceptable country-wise currency exchange and even the banking transactions in different currencies have been made scalable and adaptable to the different rates. Cryptocurrency has years of effort to go until it finally reaches a scalability level that Dollar, Yen, Pounds, or Rupee have gotten to.

While interoperability may be a huge step forward to achieve that, that itself is a challenge to mitigate first, the system is so slow, and many dominant platforms for smart contractual applications are still under development. The processes face numerous delays and would require many scalable solutions to counter this issue of exchange.

d. Data Rights

Data has reached a level of becoming a digital asset at this point. Digital mafia considers data the real deal and a key to all things penetrable for the immense value it can hold for individuals and organizations. That is why one of the biggest lose loop in cryptocurrency is and will always be data rights and privacy.

The solution here is not just government protection of privacy and data for cryptocurrency traders. A dedicated system is required where such identities can capture and control their own data. And where there is a long way to go for an efficient framework, many initiatives have been taken and underway.

e. Security

Blockchain might be immature, but it is so far advanced that it is more secure than a traditional computer system.

However, many financial breaches, data leaks, and huge losses due to the system vulnerabilities have made it challenging for people to be satisfied with their transactions. At one point in time, $250 million were lost in a single transaction through QuadrigaCX exchange due to its deadly centralized business model.

In addition to it being not secure enough, these pieces of news make rounds globally. People have lost faith in cryptocurrency over time.

2.  Difficulties Of Bitcoin Transactions

In 2013, a crypto-enthusiast made a luxury car dealership in Costa Mesa, CA, for a Tesla Model S and paid for it in Bitcoin. Just under 92 bitcoins that were worth over $100,000 at that time, the deal was sealed and legally conceived. Considering this transaction and comparing it with the real-time value of crypto right now, the setback and skepticism surrounding Bitcoin have not done much harm to the growing estimation of it.

However, one cannot move past the real-time losses that have occurred given the Bitcoin transactions over the years. Spending Bitcoin is still a huge deal than hoarding it.

a. Countries Banning Bitcoin

Countries like Vietnam, Bangladesh, Bolivia, and Ecuador have prohibited crypto transactions. The state bank has outlawed it and declared cryptocurrency an illegal form of payment with a heavy fine due to violators. And even where it is legal, there are countless logistical issues.

Even in the United States, the Securities and Exchange Commission is having an ongoing debate if it prefers new regulations for the cryptocurrency market. If major countries with relevant economic forums stand against Bitcoin, it will become increasingly difficult for the crypto-type to gain acceptance from the masses as people continue to engage in it illegally.

b. Conversion Issues

Conversion remains a huge hurdle for Bitcoin vendors. As Bitcoin is not a fiat currency and is only limited to monetary value when converted to a cash equivalent, not many vendors go for its conversions for other cryptocurrency types. They are more willing to look for a payment method that delivers in Dollars or any other local currency. So that any exchange made for goods and products is made on consumer rates.

Such an implementation system is difficult even if bigger brands are willing to make it possible. No matter if a business sells cars or academic writing services, there is a lack of appropriate regulations to facilitate this type of exchange.

c. People Losing Money

Though Bitcoin regulatory protocol was not affected and not a single Bitcoin disappeared or got lost, people lost loads of money. The downfall and cases of transactional breakdowns are the major reason why cryptocurrency came to an unannounced halt in the first place.

There is a serious need to regulate and change the trading and mining protocols in Bitcoin and other cryptocurrencies. Only then can I expect the general public to safely indulge in Bitcoin mining and trading without feeling it to be illegal or a complete daredevil gambling moves on their part.

d. Volatility Of Prices

The volatility of prices also hangs in the balance of the potential of Bitcoin and cryptocurrency in general. Even though Bitcoin has gained significant community following over the years, there have been disputes among the community member for deciding the path it should take.

The compact user base has made the currency increasingly volatile. The stability expected concerning a centralized authority system to regulate it will increase once people start to accept it. The doubts about Bitcoin’s usage and the resistance by major countries to integrate the system and legalize it will continue to deteriorate the prices further.

Conclusion – The Stakes Are High

All in all, the results of no action being taken by major industrial giants, businesses, and government authorities have never been so altering ever since all these years of crypto trading and mining as it is now. The year 2020 is going to shape the cryptocurrency industry either for better or for worse.

Crypto networks like Bitcoin, corporations like Facebook, and nations like China implementing digital currency by the end of this year will be taking a step towards stumping Dollar as the record currency. It will, in turn, lead to the US Federal Reserve pushing ahead of the digital counterpart.

There is no denying that the stakes are high, and just like everything else, the future is unpredictable for cryptocurrency too.

____________________________________________________________________

Claudia Jeffrey is currently working as a Junior Finance advisor at Crowd Writer, an excellent platform to get assignment help UK. She is a self-proclaimed crypto-influencer. She has gained significant expertise and knowledge in this regard over the years and likes to share it with an interested audience.