How Can Blockchain Developers Use AI?

 

Advancements to both blockchain technology and Artificial Intelligence have come so far that talks of merging the two have been commonplace lately. Developers of the former tech have looked at AI to see whether or not it can be used to create and improve platforms.

 

AI has already proven to be effective in other fields, which surprisingly includes the blockchain space and crypto trading solutions. Through some serious testing by larger entities in the field, some would say that the human-mimicking nature of AI has made it a good fit for the blockchain. This is especially true as they lack human error and are extremely efficient.

 

Contents:

- What would the application of AI look like?

- What are the benefits?

- Analyzing the markets

- Smart contract development

- Error detection and bug prediction

- Overall optimization

- Enhancing the entire field

- What are the drawbacks?

- Final thoughts

What would the application of AI look like?

One of the interesting things about the blockchain is that it's open to just about everyone willing to have some input on it. This open-source way of doing things is how several blockchains already operate. This leaves more than enough wiggle room for AI to be the developer as opposed to a human.

 

A blockchain by its very definition, is a platform or ledger on which all crypto transactions are kept. This means that it contains a whole lot of data that has to be processed quickly. Said data includes things such as the following:

- Network configurations

- Device setups

- User behavior

- Security information

- Traffic

 

With all of this happening at once, human power will be incredibly inefficient. AI, on the other hand, lacks this flaw and can process all this information in a streamlined manner. It is from the analysis of multiple variables that developers can fine-tune what is necessary.

 

What are the benefits?

As stated earlier, Artificial Intelligence can do a whole lot automatically, all while learning from past mistakes as well as from looking at patterns. That said, what else can it do in the larger framework? Well, the following are just a few of how AI's capabilities can aid developers in specific ways:

 

Analyzing the markets

Data analysis is the key component that allows a user to gauge the market and make decisions. Developers should be aware of this and fit AI into the space in this regard if anything.

 

In doing so, users will have the ability to use efficiently processed data to predict the market and make educated guesses regarding trends, which the AI can also do by learning behaviors. Blockchain developers can harness the power of AI to enhance their capabilities in analyzing the markets and executing trading strategies. By leveraging AI algorithms, developers can analyze vast amounts of market data, real-time and historical data for trading purposes, identify patterns, and gain valuable insights to make informed trading decisions. 

 

Smart contract development

Smart contracts are the base of action on the blockchain, which means that input from AI will undoubtedly affect them. With AI, a developer can not only write but simulate code to see whether or not certain actions will be effective and work smoothly.

 

Error detection and bug prediction

Blockchain is known for its complexity even when things are going well. So when things aren't, issues become far more difficult to sort out. With AI, these issues can easily be sorted out as bots with the tech built into them will have the equipment and the power to quickly scan, record, and deal with the at hand.

 

A developer can even go the extra mile by not waiting until a random bug enters the system. Instead, they could use advanced models to create certain situations and in doing so, the system will be better prepared for when things go sour. With this added protection, users will have a better experience than the standard network.

 

Overall optimization

Having affected the core elements of the blockchain positively, a chain reaction of sorts almost always follows and it affects the more auxiliary aspects. These elements are more in the future and they include the following:

- Finding weak points

- Establishing scalability

- Optimizing code

- Optimizing data mining

- Ensuring cost-effectiveness

- Better security

Enhancing the entire field

With AI being able to be used to great effect in blockchain, it should come as no surprise that the entire field of decentralized finance would see similar benefits. For example, Artificial Intelligence can be used to create decentralized applications on a grander level. On a much smaller one, basic security as far as verification processes can be made more secure as the data is closely and constantly monitored.

 

What are the drawbacks?

With AI looking to be the future of just about everything, it's easy to forget that it has its issues in general. As it pertains to blockchains, some of the problems are a bit more specific, with the most obvious one being the fact that the technology isn't where it needs to be self-reliant. As such, it won't be able to carry out some of the above tasks without at least some human input.

 

All this says about AI is that as it stands, it's still merely a tool to aid humans and not something that can act for them. In any case, it's a tool worth having.

 

Final thoughts

The truth is that despite the many advancements in AI, nothing has happened that has taken the tech to the next level. In short, we're always going to be the ones in control of the blockchain and its inner workings, at least for the foreseeable future. Even the innovation known as ChatGPT isn't there yet.

 

Despite this, AI is still a very useful solution that can help improve operations in trading by allowing it to sort out what its owners set out. In the end, we're not even sure how things will develop and you may be surprised to find that a few more steps is all it takes for AI to catch up.

 

You can get your Real-Time and Historical Cryptocurrency Data with Finage free Crypto Data API key.

Build with us today!

Start Free Trial