Trezor home
Trezor home

AI and Crypto: A Perfect Pair


6, October, 2023

in Crypto Business News

AI and crypto in the background with Robot and person shaking hands
Trezor home

While they appear like two distinctive technologies revolutionizing their different spheres, after closer inspection, it's now emerging as an undeniable fact that AI and crypto are becoming more intertwined than anyone could have imagined.

This article shows how combining both technologies can potentially introduce racial changes in the world's financial models by shrinking existing systems and creating new ones. 

Crypto and artificial intelligence in Fintech

Blockchain and AI, the hottest technologies today, are two radically different innovations. Still, pundits discuss the potential benefits of merging the pair.

According to a PwC report, AI is set to add at least $15.7 trillion to the global financial market by 2030 and increase the global GDP by 14%. At the same time, Gartner predicts that blockchain's business value will increase by at least $3.1 trillion during the same period.

AI is emerging as an integral part of information technology development, whose primary basis is machine learning. The innovation that has spread to and embraced every area of human activity has also roped in the cryptocurrency industry, which is currently a buzzword.

The inevitable integration of AI into the financial markets, including the creation of intelligent crypto coins, is around the corner. Still, in the meantime, its consequences are emerging in the cryptocurrency market.

The intersection of AI and crypto

While AI and blockchain have specific degrees of sophistication, both technologies can benefit from a joint symbiosis that will help each other grow since they interact with data differently.

When applied to the financial markets, the fusion of crypto and AI can help boost users' interest and confidence in digital assets. There's evidence that merging AI and crypto can revolutionize how people interact with money and place cryptocurrency at the center of things as a secure, decentralized store of value.

Both AI and cryptocurrency interact with data differently. Artificial intelligence depends on data and thrives on its predictions depending on the amount of data the machine learning system receives. Cryptocurrencies, on the other hand, are built on the concept of a secure and transparent ledger that records every transaction and ensures the data is immutable. 

Using blockchain to store and safeguard vast volumes of data creates one potential intersection point between crypto and AI. It is significant for AI since its systems require massive volumes of data to train and improve. When it comes to financial markets, using smart contracts, whose terms are secured in computer codes and executed automatically, is a powerful frontier already being explored.

Potential benefits of merging crypto and AI in financial markets

The convergence of AI and crypto plays a significant role as the world of finance undergoes a radical transformation. The merger can alter how financial transactions are conducted alongside how people make investments.

Here are a few examples of how AI and cryptocurrency are reshaping the future of finance:

Trezor home

Decentralized finance

Powered by blockchain, decentralized finance (DeFi) is implementing financial offerings away from centralized institutions to decentralized platforms. DeFi gives access to financial services like borrowing and lending without third parties like banks. A primary benefit of DeFi is its enabling of creativity and innovation that has introduced new financial products, such as automating the underwriting process for loans and making it faster and more accessible even to the unbanked.

AI-powered investment

AI is already playing a role in automating trading and investment processes, whether portfolio management or risk assessment. By analyzing significant amounts of data, AI algorithms provide real-time market forecasts, enabling traders to make faster and more informed decisions. Furthermore, when applied correctly, AI can help players in the financial markets eliminate unnecessary operating expenses by automating repetitive manual tasks, lowering financing expenses, increasing exposure to new possibilities, and catalyzing institutional adoption of cryptocurrencies.

Transparent and secure transactions

The intersection of AI and cryptocurrency could also make financial transactions more transparent and secure. Crypto operates on a decentralized network where encryption is used to secure transactions, making them impervious to fraud and manipulation. Moreover, the blockchain's public ledger system ensures that every transaction is transparent and that anyone can easily audit it. With such transparency, businesses could reduce fraud risk and improve the overall security of financial transactions.

Fraud detection

Besides automating trading and price forecasting in cryptocurrency trade, applying AI in crypto can optimize investors' trading portfolios and enhance risk management. It can detect fraudulent schemes and monitor long-term market changes as a risk management tool. Traders can use AI systems to raise crypto transactions' safety and security standards and see fraudulent ones by implementing automated verification procedures. Eventually, AI algorithms could make the crypto market safe and encourage crypto adoption.

Conclusion

The intersection of AI and crypto, two nascent technologies with the potential to transform the world of finance profoundly, is set to achieve incredible results in all aspects of the crypto niche.

Creating favorable conditions to conduct crypto investing and the entire financial market could lead to a conceptual model of trading crypto and doing more secure, efficient, and decentralized business.

Trezor home
tom nyarunda

Tom Nyarunda

Tom is a freelance writer with over 15-years’ experience in content creation, blog writing, and SEO specializing in the blockchain and cryptocurrency niche. He is a philosophical figurehead who believes that to make our world a better place, we must invest in incorruptible products and procedures, of which Bitcoin and other cryptocurrencies are leading examples.

This site uses cookies, please see ourCookie Policyfor more information.