The Case For AI + BTC
Bitcoin is the natural choice for the transactions AI will need to function, and may prove a vast new source of demand.
Crypto and artificial intelligence have been two of the most compelling technological narratives of recent years. Now, with the entrance of TradFi giants into the space, and the launch of powerful new AI software, it seems they are both coming of age.
But is there a more direct link, and a mechanism via which AI use will drive crypto adoption? Some analysts believe so.
"Society's Base Money"
There's the general idea of users needing to pay for AI applications, AI needing to pay for data, and so on, and an internet-native decentralized currency being the best way to make those payments and micropayments. But it goes beyond this.
In a recent Twitter thread, Bitcoin advocate and documentary maker Luke Broyles makes the point that not only is it inherently more logical for AI to transact in a verifiable currency (like Bitcoin), but that the number of AI agents will grow exponentially in the coming years, until they far outnumber humans.
There's also the reality that AI will bring massive productivity boosts, which will drive down costs. The risk of deflation and economic stagnation could prompt yet another wave of money printing. Effectively, the gains from AI productivity will flow into BTC.
The Only Game In Town
BitMex CEO Arthur Hayes is of the same opinion. While the global economy is facing serious headwinds, AI is the one sector poised for incredible "hockey stick" growth in the coming years.
As others have done, Hayes makes the case that only public blockchain-based currencies can support the AI economy. Any system of money used by an AI agent to access the data and resources it needs, and deliver its service 24/7, must have flawless availability. Decentralized public blockchains are the only solution fit for the job. (Ideally, any currency an AI uses will also retain its purchasing power over time, so it can continue to buy electricity efficiently.)
Hayes has written extensively over the last year about his belief that governments are soon to embark on another orgy of money printing. His view is that this will naturally seek the best returns, which right now means AI. "I believe the peak of deranged growth investing will occur in the 2025 to 2026 timeframe," he comments.
In this very plausible version of the future, in which AI powers a significant percentage of the economy, the value of the Bitcoin network is a function of the volume of transactions it sustains. Since there is a fixed supply of BTC, there's only one way the system can adjust to cope with the demand. Price has to increase.
These opinions are predicated on a world where AI gets to make its own decisions about the currencies it uses, and has autonomy over how it's run—rather than solely existing as a servant to Web2 corporations (as is currently the case). However, that's a reasonable assumption, since if AI can make those decisions better than humans, then it will 1) be allowed to do so, and 2) those who don't give their AI software that freedom will be less competitive.
Alongside the ETF narrative, and money printing narrative, the AI narrative is a strong tailwind for Bitcoin adoption in the upcoming years. The future may be a killbot hellscape, but there's a good chance it's a killbot hellscape powered by digital currency.
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