Pick an industry – any industry – and you can virtually guarantee that AI will have been hailed as its next big thing. The cryptocurrency sector is no different, with many of 2017’s ICOs shoehorning the concept into their whitepapers somewhere in a bid to appear “cutting edge” and in touch with the zeitgeist. But beyond all the hype, what impact will artificial intelligence have on the crypto industry, and could its rise ultimately render human traders obsolete?
The Companies Cashing in on the AI Craze
AI is to tech what “blockchain” is to the cryptocurrency industry: a concept whose genuine applications are significantly outnumbered by the projects interested solely in latching onto the buzzword and surfing it for all it’s worth. Given that startups described as being involved with AI attract 15-50% more funding than other tech firms, it’s understandable why companies are so keen to cash in on the hype. Unfortunately, this has served to drown out much of the real progress being made in AI-based technologies.
In the traditional financial markets, AI is well established and has already made its mark. For artificial intelligence to be effective, it requires vast troves of data for the purposes of machine learning, and the stock market is ideal for this purpose, with terabytes of empirical data to draw upon. The evidence that AI can out-trade humans in this domain is compelling. A recent study by Eurekahedge of 23 hedge funds using artificial intelligence showed that the computers returned significantly better results than those managed by people. But what about in the cryptocurrency markets?
AI Is Already Here – It Just Isn’t Evenly Distributed
Within the smaller cryptocurrency sector,