Machine Learning in the World of Blockchain and Cryptocurrency
So, you’ve decided to learn a bit about Blockchain and Cryptocurrency. That’s great! But what you will learn in this article is how it ties into Machine Learning. So, before you get started, please note that this article is meant for those who know the Machine Learning basics and would like to understand how it ties in with Blockchain and Cryptocurrency. So, make yourself comfy in your chair and read along if you fit the bill!
As per IBM, “If a machine can learn, then it has the potential to improve from experience without being programmed explicitly continually.”
There are many possible use cases of Machine Learning in blockchain technology. Here, you can look at some of them:
1) Detection of Fraudulent Transactions
In a blockchain network where digital currencies (like Bitcoins) and their transactions form the crux of the system, this information needs to be accessed by machines only in an authorized fashion.
Any unauthorized access or modification in this data can bring significant losses in terms of money and time to everyone involved. This is why Machine Learning is required for you to detect any unauthorized access or modification in the data. You can create a Machine Learning model that is trained with examples of authorized transactions and detect fraudulent activities.
2) Detection of Network Disruptions
Using Machine Learning, you can develop algorithms that warn us whenever there are anomalies in the data representing blockchain transactions. Since any network disruption can be potentially dangerous, this would aid you in identifying and rectifying the problem before it creates widespread damage. Learn more at ethereum-trader.app
3) Determination of Underlying Cause of Errors
Whenever errors occur during a transaction, you will need Machine Learning to determine the root cause of that error. Only then you can consider rectifying the problem. For instance, if a transaction has been initiated, but an error pop up during its execution, you will need Machine Learning to determine whether the error is because of a mistake in the data or a system failure.
4) Smart Contracts
Besides enabling digital currency transactions, blockchain technology also allows the automated self-execution of contracts. This technology is known as Smart Contracts. Using Machine Learning, you can create algorithms to determine whether an agreement has been executed following its agreed conditions. This would act as an essential security measure against frauds and manipulations, thus ensuring that transactions are performed safely and reliably on the blockchain.
5) Prediction of Cryptocurrency Prices
Machine Learning can be used to predict the price and volume of cryptocurrencies. You will need to create machine learning algorithms that consider different factors that affect cryptocurrency prices, such as demand-supply ratio, historical data on prices and volumes, etc., and predict the future price.
6) Prediction of Cryptocurrency Exchanges
Using Machine Learning, you can predict the sentiment of cryptocurrency exchanges. This will help you decide which exchanges are likely to perform well and survive in the world where Artificial Intelligence grows stronger with each passing day. Furthermore, you can create algorithms that take into account factors like social media presence, website traffic, etc., which can predict the future growth of an exchange.
7) Cryptocurrency Prediction Using Machine Learning
Using Machine Learning, you can also create algorithms that predict which coin is likely to perform well in specific time duration. For instance, if cryptocurrency experts have already indicated that a particular currency will increase by 50% in two days, you can also create an algorithm to predict this increase for the same time duration. You can use Machine Learning algorithms to predict fluctuations in cryptocurrency prices of different coins during a specific time duration.
As you can see, there are many use cases of Machine Learning in blockchain technology and cryptocurrency. This list is just a tiny part as new technologies are being developed now and then. The applications of these technologies will only expand as time progresses!
As stated in the examples above, Machine Learning promises to bring about many positive changes and improvements in Blockchain and Cryptocurrency. First, however, you need to be open-minded enough to explore its applications and understand how this emerging technology can be used for your benefit!