Developing an Ethical Framework for Responsible Artificial Intelligence (AI) and Machine Learning (ML) Applications in Cryptocurrency Trading: A Consequentialism Ethics Analysis
Abstract
:1. Introduction
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- Maximizing societal welfare;
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- Avoiding harm to stakeholders;
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- Promoting transparency and accountability.
2. Materials and Methods
3. Results
4. Discussion
5. Conclusions
Funding
Institutional Review Board Statement
Informed Consent Statement
Data Availability Statement
Conflicts of Interest
References
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Ethical Framework | Key Principles | Application in Cryptocurrency Trading | Example in Cryptocurrency Trading |
---|---|---|---|
Utilitarianism | Maximize overall happiness and minimize overall suffering. | Assess whether AI in cryptocurrency trading would create more happiness or suffering. | A cryptocurrency exchange uses AI to prevent market manipulation, resulting in more trust in the market and increased happiness among traders. |
Egoism | Maximize self-interest. | Assess whether AI in cryptocurrency trading would benefit the self-interest of the individual or group. | A cryptocurrency exchange uses AI to make more accurate trades, resulting in higher profits for the exchange and its investors. |
Hedonistic Egoism | Maximize pleasure and minimize pain for oneself. | Assess whether AI in cryptocurrency trading would create more pleasure or pain for oneself. | Cryptocurrency trader uses AI to make more profitable trades, resulting in more pleasure for themselves. |
Ethical Altruism | Maximize the overall well-being of others. | Assess whether AI in cryptocurrency trading would create more overall well-being for others. | A cryptocurrency exchange uses AI to prevent market manipulation, resulting in increased trust and overall well-being for traders. |
Rule Consequentialism | Follow rules that maximize overall happiness and minimize overall suffering. | Assess whether AI in cryptocurrency trading would follow rules that lead to more overall happiness and less overall suffering. | A cryptocurrency exchange uses AI to follow strict regulations, resulting in increased trust in the market and overall happiness for traders. |
Act Consequentialism | Make decisions that maximize overall happiness and minimize overall suffering in each situation. | Assess whether AI in cryptocurrency trading would make decisions that lead to more overall happiness and less overall suffering in each situation. | A cryptocurrency trader uses AI to make decisions about trades, resulting in more overall happiness and less overall suffering for traders. |
Ethical Outcomes | Potential Benefits | Potential Detriments | Alignment with Consequentialist Theories |
---|---|---|---|
Market Efficiency | AI and ML can enhance market efficiency by quickly processing large amounts of data and making accurate predictions. | AI and ML could contribute to market manipulation and financial instability if misused. | If the use of AI and ML leads to a more efficient and fair market, it will align with consequentialist theories, prioritizing the greatest good for the greatest number. |
Risk Management | AI and ML can improve risk management by identifying potential risks and generating real-time alerts. | Over-reliance on AI and ML could lead to complacency and a lack of human oversight, potentially exacerbating risks. | If the use of AI and ML effectively manages risks and prevents harm, it would align with consequentialist theories. |
Access to Financial Markets | AI and ML can democratize access to financial markets by providing sophisticated trading tools to the general public. | If not properly regulated, AI and ML could be used to exploit less knowledgeable investors, leading to unfair outcomes. | If the use of AI and ML broadens access to financial markets and promotes financial inclusion, it would align with consequentialist theories. |
Regulatory Compliance | AI and ML can help firms comply with regulatory requirements by automating compliance tasks. | If used unethically, AI and ML could be used to evade regulatory scrutiny and engage in illegal activities. | If the use of AI and ML promotes regulatory compliance and protects investors, it would align with consequentialist theories. |
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Share and Cite
Alibašić, H. Developing an Ethical Framework for Responsible Artificial Intelligence (AI) and Machine Learning (ML) Applications in Cryptocurrency Trading: A Consequentialism Ethics Analysis. FinTech 2023, 2, 430-443. https://doi.org/10.3390/fintech2030024
Alibašić H. Developing an Ethical Framework for Responsible Artificial Intelligence (AI) and Machine Learning (ML) Applications in Cryptocurrency Trading: A Consequentialism Ethics Analysis. FinTech. 2023; 2(3):430-443. https://doi.org/10.3390/fintech2030024
Chicago/Turabian StyleAlibašić, Haris. 2023. "Developing an Ethical Framework for Responsible Artificial Intelligence (AI) and Machine Learning (ML) Applications in Cryptocurrency Trading: A Consequentialism Ethics Analysis" FinTech 2, no. 3: 430-443. https://doi.org/10.3390/fintech2030024