Definition ∞ Feature engineering is the process of selecting, transforming, and creating new input variables for machine learning models from raw data. This technique aims to improve model performance by making data more representative of the underlying problem to be solved. It involves domain expertise and creativity to derive meaningful attributes that enhance predictive power. Effective feature engineering is crucial for building accurate and robust analytical systems.
Context ∞ In the digital asset domain, feature engineering is vital for developing sophisticated algorithms used in price prediction, fraud detection, and market sentiment analysis. Analysts continuously work to extract relevant signals from blockchain transaction data, social media activity, and trading volumes. The effectiveness of these models in understanding market dynamics heavily relies on innovative feature construction.
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