The rapid growth of artificial intelligence in recent years has magnified the accessibility of online information and expanded technological opportunities across a variety of industries. The most transformative aspects of AI, however, could be facilitated by blockchain and cryptographic technologies (block ciphers, digital signatures, etc.) that offer decentralized network solutions.
The combination of AI and crypto appears not only inevitable but a powerful prospect for driving innovation within the cryptocurrency ecosystem. The market capitalizations of cryptos tied to AI projects have soared along with the rise of machine learning applications and AI chip stocks such as Broadcom Inc. (ticker: AVGO) and Nvidia Corp. (NVDA).
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With 2024 already a watershed year for crypto following the launch of spot Bitcoin (BTC) exchange-traded funds, or ETFs, the adoption of AI technology could continue pushing digital currencies into the mainstream.
VanEck has already estimated that the integration of AI and crypto will represent $10.2 billion in revenue by 2030, with public blockchains helping to improve AI adoption into the future.
However, the most powerful impact of AI and blockchain will be seen in the cryptocurrency industry itself. With intuitive features geared toward improving public trust in crypto and removing barriers to adoption, the artificial intelligence boom is likely to be a catalyst for a golden age of Bitcoin and other cryptocurrencies.
Here are some likely advances driven by AI that could propel cryptocurrency use into mainstream financial planning and systems:
— Lower transaction fees.
— Trading with higher confidence.
— Cutting-edge cybersecurity.
— Optimal blockchain quality.
— Intuitive mining.
Lower Transaction Fees
Uniting AI with the decentralization qualities of blockchain means that investors can make the most of far lower fees for transactions, while removing the need for intermediaries like banks and third-party payment processors.
Decentralized AI can also improve exchange rates by coordinating payments through more efficient or automated pathways. This helps to foster a frictionless environment that makes the sending and receiving of crypto far more cost-effective, particularly when it comes to sending payments across international borders.
Trading With Confidence
There are countless ways that AI is improving cryptocurrency trading, and automation tools are helping investors gain greater control over their portfolios while making transactions with more confidence.
The use of AI algorithms paves the way for real-time market monitoring, helping traders to automatically follow price fluctuations and use “social listening” to analyze investor sentiment in real time.
With the help of machine learning, more traders can access structured and unstructured insights into historical price charts to align their strategy with their investment goals.
Generative AI is also helping to improve trading performance across the board, and AI agents like MEV arbitrage bots or Telegram bots utilize the technology to perform intelligent tasks on behalf of traders. These AI bots can conform precisely to an investor’s trading goals.
This means that AI assistants can tap into the burgeoning ethical investment products market and identify the key drivers of growth that environmental, social and governance-focused investors can benefit from.
Cutting-Edge Cybersecurity
Cybersecurity concerns are one of the biggest barriers to crypto adoption today. Crypto scams bilked about $9.9 billion from investors in 2024, according to a report from Chainalysis, but this figure may be closer to $12.4 billion once more data become available.
Artificial intelligence may eventually help to alleviate the cybersecurity concerns of crypto adopters with the use of machine learning algorithms to actively monitor blockchain networks for suspicious activity and raise the alarm in real time.
As AI may enhance the cryptography of blockchains, helping to improve their resilience to security issues, it could help ward off risks introduced by quantum computing, which may become a key security problem in the future.
AI can also help improve existing crypto processes by reviewing smart contracts to identify possible security risks, bugs and inefficiencies before recommending improvements or even enacting them.
Optimal Blockchain Quality
One of the brightest use cases in AI’s transformation of society’s relationship with cryptocurrency can be found in the Lightning Network, which deploys AI to improve the quality of the Bitcoin blockchain by optimizing route selection, managing liquidity pools and anticipating network conditions from past trends and user behavior. In other words, it’s a new off-chain network of payment channels that lets users send and receive Bitcoin rapidly with essentially no fees.
As a result, Lightning Network can not only improve the quality of cryptocurrency transactions, but it can also open the door to efficient microtransactions. The incorporation of microtransactions has the potential to transform users’ experience of Web3 by facilitating extremely small transactions that aren’t undermined by the high “gas” fees on crypto transactions for purchases.
Intuitive Mining
Bitcoin mining remains a lucrative component of the cryptocurrency industry, and leading mining companies like Bit Digital Inc. (BTBT), Hive Digital Technologies Ltd. (HIVE), TeraWulf Inc. (WULF) and Core Scientific Inc. (CORZ) have already sought to incorporate AI into their systems.
The benefits that artificial intelligence brings to cryptocurrency mining are virtually limitless. From forecasting optimum energy usage to overseeing the incorporation of renewable energy sources, AI can not only lower the carbon footprint of crypto miners but save significant amounts of money in the process.
Generative AI tools can also help to better manage and allocate resources by adapting quickly to market conditions and making rapid judgment calls to optimize hardware performance.
Will AI Move Crypto Into the Mainstream?
For many would-be investors, cryptocurrency simply remains too mysterious to embrace. Horror stories of lost savings, market volatility and limited practical uses remain barriers to mainstream adoption, but these hurdles could potentially be remedied with AI capabilities. By enabling new real-world use cases for crypto spending and security enhancements for crypto portfolios, AI could conceivably improve trust among investors and promote mainstream cryptocurrency acceptance.
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5 Ways AI Will Take Crypto Mainstream originally appeared on usnews.com
