<i>F-LSTM</i>: Federated learning-based LSTM framework for cryptocurrency price prediction

Abstract

<abstract><p>In this paper, a distributed machine-learning strategy, i.e., federated learning (FL), is used to enable the artificial intelligence (AI) model to be trained on dispersed data sources. The paper is specifically meant to forecast cryptocurrency prices, where a long short-term memory (LSTM)-based FL network is used. The proposed framework, i.e., <italic>F-LSTM</italic> utilizes FL, due to which different devices are trained on distributed databases that protect the user privacy. Sensitive data is protected by staying private and secure by sharing only model parameters (weights) with the central server. To assess the effectiveness of <italic>F-LSTM</italic>, we ran different empirical simulations. Our findings demonstrate that <italic>F-LSTM</italic> outperforms conventional approaches and machine learning techniques by achieving a loss minimal of $ 2.3 \times 10^{-4} $. Furthermore, the <italic>F-LSTM</italic> uses substantially less memory and roughly half the CPU compared to a solely centralized approach. In comparison to a centralized model, the <italic>F-LSTM</italic> requires significantly less time for training and computing. The use of both FL and LSTM networks is responsible for the higher performance of our suggested model (<italic>F-LSTM</italic>). In terms of data privacy and accuracy, <italic>F-LSTM</italic> addresses the shortcomings of conventional approaches and machine learning models, and it has the potential to transform the field of cryptocurrency price prediction.</p></abstract>