Opening new horizons: the interaction of mining and artificial intelligence
Artificial intelligence is primarily a hot topic. This is confirmed by the results of data analysis of the Google search engine. Not once in the last 5 years has the search query “artificial intelligence” enjoyed such popularity as last year. Within a few days, search volumes have skyrocketed, and Google’s trending ranking is currently at a maximum of 100.
Possible prospects
Perhaps the most important reason for AI’s success is ChatGPT, a prototype chatbot from OpenAI, which was released in November, and is most likely one of the most impressive artificial intelligences available to the general public today. One of the investors is Tesla CEO Elon Musk. Microsoft also seems to see great potential in an artificial intelligence-based chatbot and has even announced plans to introduce the service into its Bing search engine as well as the Edge web browser.
In turn, the cryptocurrency market is known for reacting to events with lightning speed. However, the problems of crypto exchanges, which can be observed recently, create an image of manipulators and speculators for blockchain technology. But despite all the scandals, the cryptocurrency sector still has great innovative potential.
It is quite possible that AI will soon take its place on stock exchanges. Securities traders are already facing an uncontrolled flow of information. AI can become a long-awaited lifeboat in this data stream. Based on the stored and processed data, AI systems perform various analyses and can independently develop trading strategies. With the help of data, the AI can understand when it makes sense to buy or sell and how high the position should be. Unlike automatic strategies, where a trader receives a trading recommendation and then makes a decision himself, an AI application is given a framework in which it is trained. Ultimately, artificial intelligence independently decides on the application of learned strategies. People will no longer be needed for this, and stock exchanges, cloud mining or mining pools, for example Ultramining will most likely be managed using AI.
One of the areas in which AI and cryptocurrencies can develop together is cryptocurrency mining. Artificial intelligence can be used to optimize mining strategies and maximize the use of equipment. Artificial intelligence algorithms can identify the most profitable mining strategies and adjust them in real time to benefit from changing market conditions. In addition, artificial intelligence-based systems can monitor the condition of mining equipment and predict when maintenance will be required, which can reduce downtime and increase the profits of miners, while reducing the negative impact of mining on the environment.
What AI will definitely help with
Here are a few ways in which artificial intelligence technology can be applied in the field of cryptocurrencies and mining:
1. Energy consumption
Artificial intelligence can help miners continuously optimize energy consumption, thereby increasing efficiency and therefore reducing costs for miners.
2. Scalability
Approximately every ten minutes, a new block is created in the bitcoin blockchain, which increases its volume by 1 MB / 10 minutes at a time. The so-called ”blockchain pruning”, once proposed by Satoshi Nakamoto, is aimed at removing resources that are no longer used in the bitcoin blockchain. Again, artificial intelligence can significantly increase the overall efficiency of the system and lead to better scalability of blockchains.
3. Security and Privacy
One of the big advantages of blockchain is security – it cannot be hacked or it will require significant resources, which would make any undertaking unprofitable. The situation is different for applications (for example, crypto exchanges) that actually act as an intermediary between the user and the blockchain. Artificial intelligence can control the structure and operations, making the use of cryptocurrency wallets more secure and confidential.
Quantum Computer and Cryptocurrencies
Along with AI, quantum computers have been actively developing recently. It is likely that the systems will soon become powerful enough to crack certain cryptographic procedures, which will be a problem for Bitcoin & Co.
The fact that quantum computers are quite well suited for hacking public key infrastructures (PKI) is mostly well known. However, initially we are talking, first of all, about hacking certain key pairs so that, for example, one user’s messages can be read. The result of this is a recommendation to encrypt almost everything, even completely insignificant messages, in order to make it difficult to find confidential information. In the end, this raises the question of what efforts an attacker would need to gain access to certain content.
Thus, even with the presence of separate powerful quantum computers, the use of expensive equipment to decrypt some emails with unknown content is still unlikely. On the other hand, everything is completely different with cryptocurrencies. In the end, the blockchain makes it possible to track all transactions, which allows you to purposefully search for particularly valuable wallets, break encryption and steal.
The collapse of the corresponding cryptocurrency systems is unlikely to look like wallets will be hacked and emptied in turn. Most likely, only one case will be enough. Then all speculators will withdraw their deposits fairly quickly, and the fall in value will reach extreme proportions in the shortest possible time. Anyone who can’t get out of the game fast enough will lose almost everything.
In the field of computer science, work is already underway on encryption methods that can also resist attacks on quantum computers. And some cryptocurrency systems, such as Ethereum, are also developing in this area. But such procedures require even more complex keys, which will further increase the already huge need for computing power for networks. But before that, there will probably be a problem, which is that in the event of a change in the basic technology, all users will be forced to leave, which is also a difficult task, as repeatedly evidenced by the planned updates in the bitcoin network.
Conclusion
And in order to summarize the article, let me give a simple example: What do camera manufacturers and banks have in common? Both of these sectors have made the transition to the digital world, but they are being challenged by new technologies. The smartphone has already destroyed the camera market. Now the smartphone is in the process of replacing even more advanced camera models.
In the field of finance, we have not yet reached this level, but, again, this issue is extremely relevant. Decentralized finance, which relies on cryptotechnology, began with a modest set of betting services and other financial products that do not require interaction with the physical world.
The future belongs to both technological directions. AI offers more practical use cases than blockchain and cryptocurrencies. AI will largely determine the Internet of the future, but coupled with cryptocurrencies, these are technologies that will act as complementary.
