## This is the Algorithm To Earn Bitcoins

In mathematics, logic, computer science and related disciplines, an algorithm (from Greek and Latin, dixit algorithmus and this in turn from the Persian mathematician Al-Juarismi) 1 is a prescribed set of well-defined, ordered, and finites that allows to carry out an activity through successive steps that do not generate doubts to those who must do this activity.2 Given an initial state and an entry, following the successive steps, a final state is reached and a solution is obtained. Algorithms are the object of study of the algorithm.1

In everyday life, algorithms are often used to solve problems. Some examples are user manuals, which show algorithms for using an appliance, or instructions that a worker receives from his employer. Some examples in mathematics are the multiplication algorithm, to calculate the product, the division algorithm to calculate the quotient of two numbers, Euclid’s algorithm to obtain the maximum common divisor of two positive integers, or the Gaussian method to solve a system of linear equations.

In terms of programming, an algorithm is a sequence of logical steps that solve a problem.

**The Law of Supply and Demand**. Investment groups do not want to see their money running through the sewer in case of disaster: they look for a safe, if not a winning, way to at least keep their money as intact as possible. You buy more virtual currency, therefore there is more demand. If there is more demand, the higher the value of the currency.

A team of researchers from the Laboratory of Computer Science and Artificial Intelligence of the Massachusetts Institute of Technology (MIT) and the Laboratory of Information Systems and Decision of the same entity; worked together to develop a learning algorithm that can predict the price of Bitcoin.

According to the team, their algorithm allowed them to earn almost double the initial investment they worked on, in a period of 50 days. This was possible because they used a technique called “Bayesian Regression” to train an algorithm and make it able to identify patterns in the bitcoin data and thus predict its estimated value at a given time. “Instead of making subjective assumptions about the shape of the patterns, we simply take historical data and put it into our predictive model,” said Devavrat Shah, the team’s principal investigator.

To carry out the project, Shah and his colleague Kang Zhang collected data on major exchanges that occurred using bitcoin over the past 5 months. “A lot of data was needed, partly because of that we chose Bitcoin. All transactions are public, “said Shah, who is an electrical engineer and professor at MIT.

The algorithm works by predicting every two seconds the price fluctuation over the next 10 seconds. This allowed Shah to buy a bitcoin when the price trend of the first two seconds went up and sell it if it was down. In this way, the team obtained a 89% of gains on the initial amount, after 2872 transactions. In addition, Shah ensures that the accuracy index can continue to increase if more data is added to the algorithm.

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