How Will AI Affect The Blockchain Space? All You Need To Know

How Will AI Affect The Blockchain Space? All You Need To Know

The emergence of Artificial intelligence (AI) in recent years has continued to be mind-blowing as it has evolved as the world’s most attractive technology with so much potential to affect the general activities of humans, including the blockchain and cryptocurrency industry.

Many people have taken to explore the different ways artificial intelligence systems could be used to make work easier, from writing to exploring how it affects the world of arts and non-fungible tokens (NFT). NFTs are blockchain-based tokens that each stand in for a particular asset, such as a work of art, media, or digital content.

Reading: Decentralized Identity: All You Need To Know

Although artificial intelligence brings lots of promises and potential, we need to tread with caution as this great technology does not affect our illusions of using it to solve every problem but can be used to solve problems where its innovation can be applied successfully.

What Is Artificial Intelligence And Blockchain 

Artificial Intelligence is dip level simulation of human intelligence processed with the help of computer systems using programming languages like python, R, Java, and other popular programming languages.

AI systems are fed with large amounts of data and analyzed data for relatable correlations and patterns to use these patterns to make successful predictions of future states. That is why we have a chatbot that has human interactions and ImageGPT to identify and recognize images and objects.

Although artificial intelligence has a huge impact and cuts across the different aspects of life, we can not exempt its effect on the blockchain space.

Blockchain technology is a digital ledger that enables transactions to be carried and stored for the public, making it difficult to be hacked, changed, or manipulated. With the help of distributed computers on the blockchain, transactions are approved.

Both AI and blockchain technology have the means to disrupt the traditional financial system through their efficiency, transparency, and accessibility. But we must be wary of how these tools can be used to solve problems in the financial system and blockchain industry and not be clouded by their potential on the surface.

How AI Can Be Used On The Blockchain Space

  • Predictive Analysis – Artificial intelligence can be used to carry out predictive analytics with the help of historical data and prices by applying statistical models through its machine learning to determine future market outcomes based on technical and fundamental analysis of the asset. 
  • Automation of Smart Contract – artificial intelligence system has the power to increase the effectiveness of lending protocol’s smart contract through constant monitoring of a lender’s collateral before transactions are processed through the lending of assets or borrowing.

Despite the unending possibility of using AI tools, we need to be aware that human decision-making can not be replaced, as these systems still need humans to operate them to perform the task needed. 

Image from daily express
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