In a recent interview, BingX CPO Vivien Lin spoke about the intersection of AI and blockchain technology, and how it is revolutionizing online trading. BingX is a leading cryptocurrency exchange, with over 10 million worldwide users.
Lin explained that AI and blockchain are much more than just underlying technologies for cryptocurrencies. AI’s ability to analyze and process data complements the decentralized nature of blockchain, greatly benefiting online trading.
Before the advent of AI, traders relied on machine learning models to predict trends and formulate strategies. AI, with its superior computational power, has made this process more efficient, benefitting traders across assets, be it stock or cryptocurrency. More specifically, AI is particularly useful in the decentralized cryptocurrency world, as it can track and analyse data across different blockchains— a task difficult for an average human trader.
AI is also seeing applications in security measures for detecting fraudulent transactions. While these technologies are yet to mature, they hold significant potential. Traditional financial markets are highly regulated, making fraudulent activities less likely, the same does not hold in the world of cryptocurrencies where there are hundreds of exchanges, each with different ethical standards. AI can therefore assist here by helping design systems that minimize potential mistakes or flaws.
AI also has implications for trading bots and copy trading systems. AI-based strategies can empower those with less experience to make strategies comparable to those of professional traders. Lin pointed out the bias and flaws that human traders can experience, and argued that AI can better assist in making profit-related decisions and lower the psychological resistance to implementing strict rules.
AI can help traders refine their trading strategies when considering market indicators or factors. Specifically, it can help screen out factors or indicators not suitable in the current market, thereby aiding market prediction.
AI also plays a role in data management, including decentralized data storage or decentralized computing systems. It can help in making decisions about which nodes should be used when a blockchain is proposing blocks and achieving consensus.
Finally, AI can enhance the trust and transparency in the decision-making processes by validating AI-driven decisions through smart contracts before any transaction is executed. Furthermore, it can manage and analyze data across multiple chain platforms, aiding in detecting fraud.
