Decoding the enhancements made via artificial intelligence (AI) in the crypto industry, fledgling alterations that sparked a buzz seem to be concentrated around trading, data analytics, and user experience. Some sceptics might argue that the integration of AI and digital currencies was too hyped; however, one can’t discount the substantial impact AI-powered tools have had, particularly with automated trading.
When one talks about trading, the concept of bots often spring to mind. Establishing an aura of ease around trading processes, bots adhere to preset parameters to execute trades. Making strides in this field are Large Language Models such as ChatGPT employed within AI-powered bots. These bots exploit large databases of historical data useful in predicting future price movements. Still, many would agree that, although valuable, these AI entities lack the sophistication to comprehend complex trading strategies.
Contrasting crypto trader and YouTuber Eric Crown‘s take on AI tools, he said, “It’s basically like having a bunch of dumb partners who can adhere to very basic commands but can’t do any very complicated thinking themselves.” It throws light on the AI’s limitations within the crypto trading realm.
Apart from trading, AI has been instrumental in producing meaningful insights from the massive quantities of crypto data distributed on the blockchain. It fulfills the role of a digital miner, digging deep into the crypto ecosystem’s dynamic data, a valuable feature for assessing market risks.
Despite AI’s promising capabilities, it has to deal with some hurdles. A substantial amount of market data housed within off-chain centralized exchanges remains out of the public’s reach. This lack of transparent access impairs AI’s ability to make accurate assessments, leaving it handicapped to an extent.
The tale of AI’s function in transforming crypto isn’t necessarily black and white, with several gray inputs. Yes, its potential and impact are undeniable, but it’s also impossible to overlook the limitations in its current state.
Expecting AI to perform complex trading operations might be too ambitious for today, but considering the pace at which AI is evolving, we can be optimistic for the future. Gradually integrating into the digital currency landscape, it’s a continuous journey where AI is upgrading its skills to translate the enormous potential hyped today into tomorrow’s reality.
So, to truly understand how AI and crypto are navigating their shared journey, one must oscillate their gaze between the ‘hype’ and ‘reality’ to find their line of vision.
Source: Cointelegraph
