Machine learning is not all that difficult to understand. Your brain is a machine of a sort, and it learns. If you walk up to a stranger and he smacks you in the face, you are not likely to approach that particular stranger again. You went out, gathered data about strangers, and made a prediction about what might happen if you approach one.
Machine learning algorithms do the same thing but on a much larger scale. They build a model based on available data to make predictions without having to be programmed to do so.
There are several reasons why it is essential to understand the benefits of machine learning when combined with blockchain, all of which are listed below.
More Accessible and Cheaper Data
People want this information, but Facebook, Google, and Amazon have monopolized the systems for gathering data. Blockchain has the potential to break this monopoly, making machine learning and data more accessible and cheaper.
People using blockchain will be able to use machine learning algorithms using their web browsers and applications on their desktop computers and mobile phones. This will allow people to gather data and create predictions without having to pay the exorbitant costs per query or not being able to access it all.
One of the problems in the digital age is security and fraud. These have always been problems; after all, people didn’t start stealing from or defrauding their fellow man yesterday. However, committing theft and fraud is a lot easier and more effective now that these crimes can be committed via computer.
Consider that the James-Younger Gang’s most successful robbery was in 1866 when they netted $60,000 from the Clay County Savings Association in Liberty, Missouri. In contrast that Manor Independent School District losing $2.3 million to a phishing scam. Had they had access to a computer, Frank and Jesse James would have been much richer (and Jesse would have lived a hell of a lot longer).
The sheer amount of money cyber thieves can steal requires those running various services to rethink how they approach security. Machine learning algorithms can help people to locate vulnerabilities criminals can exploit. Furthermore, since this data is on the blockchain, it is decentralized and can be easily shared.
More Effective Trading Strategies
Trading anything, whether it is cryptocurrency, stocks, or commodities, requires a lot of research. This research takes a lot of time and effort. It is possible that machine learning can take up much of the slack and make more accurate predictions on when it is best to buy or sell. Additionally, with this data available on the blockchain, more people would have access to this information, and they would be able to make their own decisions without having to consult with a broker.
Closing Thoughts About Blockchain and Machine Learning
The ability of blockchain to make machine learning more widely available comes with some risks. People have to ask themselves who is inputting the data. The data used to make these predictions must be relevant, and if it isn’t, the final results are worthless. People should properly vet who is providing the data before using it. You would think that a group with the know-how to create applications for blockchain would know how to do this, but people are people, and there are many examples of biased data tainting results.
There is also the danger of people substituting critical thinking for machine learning. You may think that is not possible but having worked in digital marketing for the past few years, I have seen this in action. SEOs stuff keywords and phrases into an article that make no sense because a computer program told them to do it.
Doing this is no different than letting a hammer do the carpenter’s thinking. You wouldn’t let a hammer tell you how to drive a nail into a two-by-four, would you? So why would you let a computer think for you?
Regardless, machine learning will change the way blockchain is used in various ways, from security to investing. So, it is a good idea to start taking advantage of it now.