Title
Influence of artificial intelligence on gold exchange standard in an underdeveloped country, using the
Purchase of Nigeria's crude oil extraction as a case study
ABSTRACT
This research provides a short overview of the relationship between Artificial Intelligence, using the gold
exchange standard as the method of payment for crude oil in an underdeveloped country. Al was used as a
tool to investigate, analyze, forecast, and monitor the sales output of crude oil. The study showed that
using the gold exchange standard primarily as the only acceptable means of payment for the sale of crude
oil only on international platforms bought by different countries would deal with the issues of
undervalued currency, elevate income levels and, stabilize inflation or economic crises in underdeveloped
nations such as Nigeria.
INTRODUCTION AND MOTIVATION
Before the advent of artificial intelligence and Fiat money, the gold-exchange standard was used as a
legal tender for means of exchange between countries. Some important economies recorded low inflation,
stabilized foreign exchange rates, reduces economic crises, and improved credible commitment
mechanisms. England adopted a de facto gold standard in 1717 after the expert in the mint, Sir Isaac
Newton, overvalued the gold in terms of silver and England formally adopted the gold standard in 1819.
From 1880 to 1914, the period was considered the classical gold standard regime, where most countries
held onto gold, although in varying degrees. It was also a period of unprecedented economic growth with
free trade in goods, labor, and capital.
The Gold Standard is a pre-modern fixed exchange rate system. This system used gold as the common
unit of parity between currencies from various nations. Every nation was required to specify the value of
its money in terms of gold. As a result, the worth of one currency is set about another currency while
considering the gold value of each currency. Countries that use the gold exchange standard have a
predetermined price for the metal and conduct their business using this fixed price.
AI has been present in the industry since 1950, playing an important role in a variety of sectors and
advancing technology. In Nigeria, AI has aided in the extraction of Crude oil, increasing the average
depth of a well from 3,635 feet in 1949 to 5,964 feet in 2008. AI-powered solutions have been used to
detect and mitigate cyber threats and perform surgeries, drive cars, and monitor crops. AI has been a great
asset to the industry, and it is expected to continue to evolve in the future, bringing more advancements.
In this Section, the discussion is about the impact of artificial intelligence on the gold exchange standard,
and how Al systems can transform the method used in the extraction of crude oil in its most natural state
through research, planning, data collation, and drilling of crude oil. I will also discuss how the gold-
exchange standard tends to be a potential solution to stable revenue generation if crude oil is sold to other
countries using Gold Exchange Standard scheme. This scheme is an ideology that could bring about a
drastic reduction in inflation, an undervalued currency, economic crises, and poverty plaguing
underdeveloped countries like Nigeria.
BACKGROUND HISTORY
Gold is an international standard for money, reliability, storability, and ease of recognition. It was used as
a form of money in prehistoric times and was formalized as an international system of fixed exchange
rates in the late 19th century. This system requires countries to fix the value of their currencies to a certain
amount of gold, allowing for a stable exchange rate between countries and facilitating international trade.
Additionally, the Gold Standard is used to train AI systems by providing them with data to learn from,
evaluate algorithms, and assess the generalizability of an algorithm. Furthermore, gold has been a reliable
store of value throughout the centuries. Since gold is a finite resource, its value is not affected by inflation
or economic downturns. This makes it an attractive asset for investors who are looking for a secure place
to store their wealth. Gold is also a great hedge against geopolitical turmoil, as it can be used to purchase
goods and services in times of crisis.
LITERATURE REVIEW
Kemal Güler and Abdulkadir Tepecik conducted a review in which they used artificial intelligence to
predict an economic crisis based on economic data. Their research looked at the external, microeconomic,
and macroeconomic factors that influence gold exchange, such as the gold price, exchange rate, inflation
rate, interest rate, current account balance, foreign direct investment, foreign reserves, and government
budget. In conclusion, the researchers concluded that these various factors should be considered when
predicting gold exchange.
Allan R. Gold, Author at Leff Communications, wrote an article on March 16, 2023, highlighting the gold
standard on artificial intelligence, his thoughts point towards how companies can reap huge rewards from
investing in digital technologies and AI. For instance, the research by BCG shows that even a small
investment could lead to a 6% increase in revenue, with larger investments resulting in 20% or more. He
also suggested that to maximize the benefit of investments, taking advantage of artificial intelligence
(AL) propels companies to focus on the most beneficial tools and scale them quickly, thereby leveraging
data and technology across the organization. AI strategies must be carefully selected to create the best
outcomes if you want operations to be transformed by effectively taking advantage of smart machines,
and balancing technology and talent.
In the field of Petroleum Research, Anirbid Sircar proposed that industries dependent on crude oil should
deploy a range of technologies for exploration, design, and operation in oil fields. To combat rising
prices, oil, and gas companies have developed new technologies to increase their efficiency. With mature
oil fields now producing more water than oil, Machine Learning and Artificial Intelligence technologies
have been used to optimize production processes and support legacy reservoir engineering approaches.
AI-powered workflows can estimate the exact results of inverse problems, thus enabling the Gulf of
Mexico oil and gas industry to transition to a data-driven system for inspection and production. Over the
past 50 years, technologies and increased amounts of oil have been connected with the advancement of
AI.
The Nigerian economy is closely linked to currency, crude, and money, with the Naira being highly
volatile in value. This has caused economic instability, and the gold-exchange standard is being proposed
to help stabilize the Naira and improve economic conditions. The Central Bank of Nigeria has
implemented a managed float system to keep the exchange rate within a predetermined range, and the
government has implemented fiscal and monetary policies to reduce volatility. The gold-exchange
standard would tie the value of the Naira to an internationally accepted commodity, such as gold, to
ensure a more stable currency and improve the country's income and reduce unemployment.
RESEARCH AIMS AND QUESTIONS
This research proposal is aimed at addressing how artificial Intelligence (AI) could boost the gold
exchange standard on the international trade of crude oil in an underdeveloped nation, such as Nigeria.
Despite the largescale o extraction of crude oil in Nigeria, the nation is still faced with several challenges
amongst many other detrimental oppositions. In other to address some of these challenges, a study into
the intricacies of how AI could savor the situation and some other apparent questions is required, such as;
In what way can artificial intelligence (AI) improve Crude oil extraction and issues regarding its
depletion?
what procedures do crude oil extraction need and by how much, can it be expedited by using AI
How crude oil extraction was previously been done and what improvements are anticipated in the
upcoming years.
How artificial intelligence could help predict, analyze, and forecast the sustainability of crude oil
extraction.
How gold-exchange standards could help resolve undervalued currency, stabilize or reduce inflation and
ultimately reduce the risk of economic crises in an underdeveloped country such as Nigeria
Why underdeveloped countries should trade their crude oil in exchange for gold rather than fiat money.
How the gold-exchange standard could impede other governments from currency manipulation.
RESEARCH METHODOLOGY
This proposal applied the method of secondary qualitative research is a valuable tool for researchers, as it
provides access to data such as public records, articles, published reports, and official statements. This
data can be used to efficiently research and draw meaningful conclusions, supplement primary research,
verify key data, provide additional insights, analyze existing trends, suggest new research directions, and
identify new research questions. Therefore, secondary qualitative research is an effective method for
obtaining reliable and valid data and research. The results of secondary qualitative research can provide
critical insights into complex situations that cannot be obtained through primary research. For example,
researchers can use the data to uncover hidden relationships, analyze the impact of certain variables, and
provide a broader context for the research. Additionally, the results of secondary qualitative research can
be used to identify potential sources of bias in primary research, including the selection of research
participants, the data collection process, and the analysis of results. Furthermore, secondary qualitative
research can be used to validate the results of primary research, providing researchers with a more
complete understanding of the topic.
Crude oil is a major commodity in Nigeria, and AI can greatly influence its sale and extraction. This
application is divided into three sections that discuss ways in which AI can help with the exchange of
crude oil using the gold exchange standard, secondly, how this could benefit the Nigerian economy, and
thirdly, the impact of AI on the extraction of crude oil.
Summary Of Expected Outcomes
It is expected that the relationship between artificial intelligence and the gold exchange standard would
enable AI to leverage its capabilities to encompass the sub-fields of machine learning and deep learning,
using algorithms available on data to make predictions or classifications and get smarter over time by
automatically monitoring the sales task between crude oil and gold exchange standard repetitively. This
would improve decision-making regarding the federal currency reserve.
The relationship between artificial intelligence and the extraction of crude oil in Nigeria would improve
the process of drilling, distribution, and depletion of crude oil to buyers.
The relationship between the purchase of crude oil using the gold exchange standard as the only means of
exchange primarily for inter-trade between nations for the purchase of crude oil alone would retrieve the
correlation of foreign currency as a determining factor of the value of Nigeria's currency, it is expected to
stabilize inflation crises and deal with the issue of an undervalued currency.
CONCLUSIONS
Overall, this work suggests that the relationship between AI and the gold exchange standard goes in two
directions. On one hand, AI has the potential to immensely change the impact of the gold exchange
standard in an economy and elevate the view of a nation on a global scale. On the other hand, returning to
the gold exchange standard can be an important mechanism through which underdeveloped countries
begin to consider the inputs needed to build AI systems that would support their sale of crude oil to their
buyers. AI can help to streamline the process of exchanging crude oil using the gold exchange standard.
This would allow for the quick and easy exchange of crude oil, providing a more efficient and costeffective way to buy and sell oil. Additionally, AI could be used to provide an automated system to
monitor the prices of crude oil, ensuring that the Nigerian economy is not adversely affected by sudden
fluctuations in the market, and it could be used to provide an automated system to track the output of
crude oil while allowing for the efficient extraction of oil