How Natural Language Processing (NLP) Can Help Crypto Investors?

Various cryptocurrency trading systems are currently applying Natural Language Processing to their technology. What is this? In this blog post we will look at each and every aspect of this subject.

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What do you stand to gain as a crypto investor using NLP?

Read on and find out.

How Natural Language Processing (NLP) Can Help Crypto Investors?

Let us start from the basics. I will explain what is Natural Language Processing (NLP), how NLP works and why NLP is important to cryptocurrency?

What is Natural Language Processing (NLP)?

In simple terms, NLP is a part of Artificial Intelligence that makes it possible for computers to understand human language.

Artificial Intelligence is the development and computer systems that can perform tasks just like those of humans. These include things like translations, decision making and speech recognition to name but a few. The computer systems are equipped with algorithms and formulations that help them to be intelligent.

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With Natural Language Processing, people can be able to talk to their computers and the computer understands what is being said and gives a suitable response. This is usually made possible by the use of a program that is capable of decoding human voice and words and converting this into a language the computer can understand and react accordingly.

It can also be the analysis of documents to see what are the words or phrases the most used to generate context about what a given document is written about. At a glance we can then immediately see what the document is talking about. We can also analyze the authors choice of words, determine the reading level needed to understand the document, compare it to similar documents, search for keywords and terms and many other tasks that involve analyzing language.

Machines can also communicate with each other using NLP.

How NLP works?

The working of NLP is divided into three steps. The first step is the understanding of the natural language directed to the computer. This is done using a statistical model that converts the natural language to programming language.

To do this, the speech is broken down into small units and the computer compares these to stored units. The input is determined statistically and the computer is able to change the speech to text.

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The text is then grouped according to the type of words, that is, nouns, verbs, past tense and so on. This is done by using predetermined lexicon rules in the program.

Then the computer understands what was said and it coins a suitable response in programming language. The next step involves converting this into text, and then speech. The response can be in written form or speech depending on the complexity of the program used.

Why NLP is Important to Cryptocurrency?

The cryptocurrency market is growing at a very fast rate and people are finding it difficult to keep up with the market needs. There is a lot of hunger for information that is becoming almost impossible to satiate. Many investors are now looking into using Natural Language Processing to help solve this and other challenges in the crypto world.

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NLP can help investors stay in the know of the trends in the market. They provide faster and more reliable responses compare to the human response. Picture this, wouldn’t it be better to just ask a computer to read through 100 different white papers vs reading them yourself. You can be like the boss who hires a smart apprentice and asks them to do all the hard work while you focus on the big picture. In fact the computer will give you accurate information and fast. It saves you time and money!

Some examples of NLP applied to crypto investors and traders could be:

1. Summarizing thousands of blogs, Reddit, Twitter streams, Bitcointalk threads, Steemit posts and filtering data based on your particular interests.
2. Creating customized sentiment scores, whether you are a day trader or long term bitcoin HODLers.
3. Using automated NLP scoring to add to your ICO/new token investment analysis, for example rating project whitepapers on their grammar, writing style, etc.
4. Providing you daily/weekly or monthly updates from the crypto world based on you customized newsfeed. Heck with the right data it can even be updated every second.

Machines are reliable because their stand cannot be easily swayed by emotions. They make decisions based on facts which make their advice solid and reliable. The risk they calculate for you is true.

Technology keeps changing and you need to change with it. With cryptocurrencies trade being done mainly online, you know that you require computer skills to carry out this trade. With NLP you do not need to be tech savvy to benefit. You don't need to understand how all the technology works. All you will need is basic computer skills and how to make good judgements. Investors now have an easy time in the trade.

I hope your questions about natural language processing have been answered. It is a crucial part of the crypto business that we would all not wish away. It makes an investor’s life easy helping make the right decisions without too much brainstorming.

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