Don’t Be Surprised If AI Tries To Sabotage Your Crypto

As the world of cryptocurrency trading evolves, so does the technology supporting it. In recent years, we have seen a rise in AI tools such as ChatGPT being integrated into various aspects of the crypto landscape. This development, while exciting, is not without its drawbacks.

A recent survey by my own exchange – BitGate – found that in 80% of cases, crypto traders admitted to having a negative experience with ChatGPT. Typical examples include providing false investment advice, misinformation and falsification of facts.

misleading investment recommendations

Artificial Intelligence is not an omnipotent entity, but a man-made tool. The AI ​​and, in particular, ChatGPT, operate within parameters set by human developers, and while its capabilities are impressive, they are not without their limitations. Our society’s understanding of these tools is still maturing, and it is important to recognize their potential risks, especially when it comes to financial decisions.

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In the pursuit of improved customer experience and innovation, many fintech companies are exploring the potential benefits of incorporating AI into their operations. However, experiments using AI for customer inquiries, design, copywriting and coding have shown that human talent still outperforms AI most of the time.

Bitget attempted to use ChatGPT to handle routine customer inquiries. Initially, we were impressed by its efficiency in analyzing and compiling information. However, as we delved into more complex questions, cracks began to appear. Despite being trained on extensive data, ChatGPT sometimes provides misleading, biased or incomplete information, as a recent internal test reminded us.

When our staff inquired about market sentiment regarding a lesser-known altcoin, ChatGPT mistakenly associated the coin’s name with a popular internet meme. The resulting response, though amusing, may be taken seriously by those new to the market who rely heavily on third-party programs.

Another request came from a user who asked why Terra’s LUNA was trading 95% lower than last year, after the user received a list of potential coins from ChatGPT to consider. The question was: “What are the 30 cryptocurrencies that I can consider investing based on the criteria of the best team, token, security and reliability?”

When I tried to ask the same question and explain why LUNA is on the recommended list, ChatGPT quickly changed its mind and started offering another coin.

The thing is that language models such as GPT-4 and GPT-3, which are used in ChatGPT, have access to an outdated information base, which is unacceptable in the business market, where speed and relevance matter. For example, FTX, the crypto exchange that went bankrupt in November 2022, is still safe and sound if ChatGPT is to be believed.

Although the exchange collapsed nearly a year ago, ChatGPT’s knowledge only runs until September 2021, meaning it believes FTX is still a going concern.

Importance of Human Expertise in Crypto Trading

The crypto landscape is complex and ever-changing. Navigating its many ups and downs requires keen human insight and intuition. AI tools, while robust and resourceful, lack the human touch needed to accurately interpret market nuances and trends. It is important to exercise caution, diligence, and critical thinking. In the pursuit of technological advancement, both companies and individuals should not overlook the importance of human intuition and expertise.

As a result, we have chosen to limit our use of AI tools such as ChatGPT. Instead, we place greater emphasis on blending human expertise and technological innovation to better serve our customers.

This is not to say that AI tools do not have their place in the crypto sphere. In fact, for basic questions or simplifying complex topics, they can prove invaluable. However, they should not be viewed as a replacement for professional financial advice or independent research. It is important to remember that these tools, while powerful, are not infallible.

In the crypto world, every piece of information carries weight. Every detail can affect investment decisions, and in this high-stakes environment, one wrong move can have significant consequences. Thus, while AI tools can provide quick answers, it is important to cross-verify this information from other reliable sources.

Furthermore, data privacy is another important aspect to consider. While AI tools like ChatGPT do not inherently pose a privacy risk, they can be misused in the wrong hands. It is important to ensure that the data you provide is secure and the AI ​​tools you use follow strict privacy guidelines.

Ethical considerations and data protection

Still, AI tools like ChatGPT are not the enemy. They are powerful tools that, when used responsibly and in combination with human expertise, can greatly enhance the crypto trading experience. They can explain complex jargon, provide quick feedback, and even rudimentary market analysis. However, their limitations must be acknowledged, and their use requires a responsible approach.

In our journey with ChatGPT, we’ve learned that AI tools are only as effective as their latest updates, training, and the data they feed them. They may not always be aware of the latest developments or understand the subtleties of a dynamic and often volatile crypto market. Furthermore, they cannot provide empathy – a quality that is often needed in the stressful world of crypto trading.

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The integration of AI into crypto trading also raises ethical questions, especially when it comes to decision making. If a user makes a financial decision based on misleading information provided by an AI tool, who is responsible? It’s a question the industry is still grappling with.

Then there is the issue of data security. In an age of data breaches and cyber threats, any technology that collects, stores, and processes user data must be scrutinized. While AI tools like ChatGPT do not inherently pose privacy risks, they are not immune to misuse or hacking. It is paramount to ensure that these devices have strong security measures in place to protect user data.

It is also worth noting that while AI tools can crunch the numbers and provide data-driven insights, they cannot replicate the instincts that experienced traders often rely on. The kind of instinct that is honed over years of trading, watching market trends, and understanding the psychology of other traders. This is something AI, for all its sophistication, cannot learn or emulate.

While AI tools like ChatGPT offer exciting possibilities for the crypto industry, they should not be viewed as a magic bullet. They are tools to assist, not replace people, intuition and financial expertise. As we continue to explore the potential of AI in the crypto world, we must be mindful of these limitations and potential risks.

This article is for general information purposes and is not intended and should not be construed as legal or investment advice. The views, opinions and opinions expressed here are those of the author alone and do not reflect or represent the views and opinions of Cointelegraph.