The Best Money for AI is Crypto

Prominent industry leaders are increasingly advocating for cryptocurrency as the ideal monetary system for AI agents. This consensus is shared by figures like Circle CEO Jeremy Allaire, former BitMEX CEO Arthur Hayes, and Animoca Brands’ Yat Siu.

The argument for crypto’s suitability for AI hinges on the fact that Large Language Models (LLMs) can’t access traditional bank accounts but can easily manage transactions using a crypto wallet. This capability is enhanced by their inherent compatibility with smart contracts and decentralized finance (DeFi) protocols. Humans can set broad strategies and rules for the AI-managed wallets and monitor their performance through the transparent records available on the blockchain.

Allaire posits that AI and blockchain technology are a natural fit, ideal for machine-generated and enforced contracts, as well as for machine-to-machine value exchange.

Arthur Hayes champions Bitcoin as the most fitting payment system for AI, citing its constant availability, digital nature, and automation. He envisions AI using Bitcoin to acquire data and compute power essential for their functioning. However, Hayes also speculates about AI’s longevity and Bitcoin mining by robots, leading to somewhat far-reaching predictions about their coexistence.

Yat Siu also supports the idea of crypto being the sole logical medium for future autonomous AI transactions.

Interestingly, ChatGPT, an AI itself, appears to prefer crypto as its currency of choice without external influence. This inclination is mirrored in the current landscape, where trading bots, capable of buying and selling crypto, constitute up to 80% of spot trading volumes. These bots are expected to evolve into more sophisticated AI agents over time. However, caution is advised, as AI-driven trading ventures like Autopilot’s GPT Portfolio have shown mixed outcomes.

Innovative experiments are underway, such as those by Near DAO, where AI is being used to autonomously decide on funding new projects from its treasury based on set criteria.

The integration of AI with crypto payments is progressing rapidly. Lightning Labs has developed tools allowing GPT-4 to interact with Bitcoin using its layer 2 network, and startups like Fewsats have created agents capable of processing Lightning Network invoices.

Fetch.Ai offers services to create AI agents for managing payments, and Ian Dao Lee of Syndicate.io has explored the use of AI for autonomous USDC payments through Syndicate’s Transaction Cloud.

Lee envisions a future where AI agents autonomously manage finances, make purchases, approve funding, and work towards wealth accumulation for various purposes. This potential underscores the growing intersection of AI and cryptocurrencies, heralding a new era of digital financial agency.