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How Machine Learning Could Reinvent the Way We Invest in Cryptocurrencies
Pini Raviv | Feb 20, 2018 | 23:30
Over the past few years, we have witnessed an increasing adoption of data science to improve the accuracy of our predictions. The result has been astounding and has completely revolutionized organizations across a huge range of industries.
In particular, it has had a great impact on the investment industry.
We’ve now reached the point where has become so fierce that simply doing some research and ‘trusting your gut’ simply won’t cut it anymore. If you want to stay ahead of the curve, you’re going to have to work for it.
Using Machine Learning to Make Predictions and Optimization
‘Machine learning’ has already become one of the hottest buzzwords of this year – and it’s easy to see why. But despite what most people think, ‘machine learning’ isn’t the same as ‘artificial intelligence’. Machine learning is actually a type of artificial intelligence that enables computer systems to learn, improve, and essentially “evolve” as they are exposed to new data.
Tech giants like Google are even using machine learning to predict flight delays. When booking a flight, the algorithm will search through previous flight delays to look more closely at what has caused them – for example, bad weather conditions, late arrivals, etc.
If enough of the information matches up and there is a good chance there will be a delay, this information will appear in the search results to warn customers before they book their flights.
But it’s not just Google that’s reaping the benefits of machine learning. This technology is changing the world. Some of the other industries that are currently being revolutionized by this technology include education, healthcare, travel, business, and marketing.
In the crypto space, a few pioneers are paving the way.
Silo has developed a smart algorithm that analyzes market movements and scrapes the Blockchain to identify the cryptocurrencies that make 95% of the market every 24 hours.
The algorithm is based on Machine Learning and real-time analysis of widely adopted and trusted coins. This insight essentially determines the amount of trust the crypto society has and which currencies are being adopted or “ditched”.
Finally, the algorithm then “purchases” the tokens in a distributed manner, so essentially one Silo token holds several dozens underlying assets such as BTC, ETH, NEO, Qtum, etc. In turn, Silo tokens are liquid from the first second because they represent their underlying assets.
How Can We Use Machine Learning to Maximize Profits in Crypto Trading?
The recent crypto boom has attracted many new investors to the world of crypto trading in the hopes of making it big. However, many of these investors are brand new to trading and find it difficult to know what exactly they should be investing in. As a result, many people end up losing money that they can’t afford.
As if investing wasn’t already risky enough, there have been an increasing number of ICO scams. It’s got so bad that social networks, including Facebook, have recently banned the advertising of all ICOs.
To try and help users to make more informed decisions, some companies are aiming to use machine learning to make smarter, faster trading decisions that will ultimately maximize trading profits.
Leading Blockchain start up Signals aims to completely revolutionize crypto trading by allowing its users to build their very own algotrading models – with absolutely no programming skills or prior knowledge of machine learning required.
To get started, users are simply required to choose a number of indicators and combine them all together. Before they invest any money, they can test their models to gauge their success.
For data scientists and developers with some programming knowledge, the platform opens up a brand new potential revenue stream by giving them the opportunity to develop new trading indicators completely from scratch and monetize them by allowing other users to access them through the Signals Indicator Marketplace.
Ultimately, the aim of this platform is to allow its users to generate profit by using the trading models they have created on real-time data to make optimized trading decisions.
The Rise of Artificial Intelligence
Unless you’ve been living under a rock for a few years, you’ve probably already realized that artificial intelligence is a pretty big deal.
It’s already taking over hedge funds and is set to wipe out thousands of asset management and sales and trading jobs. On the flip side, it’s set to create thousands of brand new jobs centered around technology and data science.
Hedge funds that have decided to replace their human employees with artificial intelligence are already greatly outperforming their competitors who haven’t yet made the leap.
With the recent rise in cryptocurrency hedge funds, it is almost certain that it’s only a matter of time before artificial intelligence trading technology begins to dominate the crypto markets, as well.
How will machine learning and artificial intelligence change the way cryptocurrencies choose and execute trades? Tell us what you think in the comments below.
Images courtesy of Inbound Junction, Shutterstock
