EMERGING TECHNOLOGIES IN HARMONY AI, Crypto, and Policy Innovation

AGATHA H. LIU
Duane Morris LLP

THE NATION IS WELL POSITIONED TO further develop artificial intelligence (AI) and promote its application,¹ while the government renews its interest in cryptocurrency (crypto) as a significant part of digital assets.² Both AI application and crypto hold huge potential to advance collective prosperity, yet they are rooted in complex, disruptive technologies that pose significant challenges for policymakers. Traditionally, the two fields have followed separate trajectories, but their convergence is increasingly evident.

From the perspective of crypto, AI and specifically machine learning (ML) can be deployed to enhance processes that involve intensive computation and advanced decision-making. For example, during blockchain operations, user-initiated transactions are pooled so that miners can select transactions and solve intricate cryptographic puzzles to add new blocks. This mining process is the most compute-intensive aspect of the blockchain, yet it is essential for maintaining the chain’s integrity. ML can offer multi-faceted support, from selecting optimal mining strategies and assigning mining tasks efficiently to predicting faulty conditions in mining equipment.

ML also holds promise for improving crypto trading, which, unlike conventional securities trading, is characterized by around-the-clock activity and extreme volatility. Advanced ML systems are capable of operating continuously with fault tolerance. They excel at filtering out noise, capturing subtle patterns, and adapting in real time to chaotic and rapidly changing conditions. These attributes make ML especially well-suited for predicting prices, detecting fraudulent activities, and optimizing portfolios based on numerous technical, psychological, and environmental factors.