Arthur Hayes, co-founder and former CEO of BitMEX, has suggested that Bitcoin could become the currency of choice for the rapidly emerging field of artificial intelligence.
In a recent blog post titled “Mass,” Hayes discussed a future where AI and robotics would eliminate the less desirable tasks in human work, allowing more people to focus on their passions and potentially ushering in a new renaissance of arts and culture.
Future AI Adoption and Bitcoin.
Hayes acknowledged the daunting question about AI potentially overshadowing human capabilities. As he noted,
“Since the first computers came online during WWII, scientists and philosophers have debated how thinking machines will evolve and their impact on the human experience.”
He sees recent advancements in computing power as an indication that we are on the verge of a major shift, with AI poised to go viral and change the course of humanity.
As an example of AI’s rapid adoption, he pointed out to his readers how ChatGPT reached 100 million monthly active users in just two months, making it the “fastest adopted technology in human history.” This, he suggested, offers a glimpse of how quickly AI integration into everyday life can change societal norms.
Regarding the potential impact of AI on the crypto industry, Hayes suggested that, as a businessman, he sees the increasing prevalence of AI as a double-edged sword. He is drawn to it because of AI’s significant impact on humanity’s future and subsequent value. Yet he is also wary of the initial investment in a new technological advancement, as he believes it is usually too expensive.
Mass
Ahead of the coming “AI mania,” Hayes intends to use his deep knowledge of the crypto industry to identify the intersections with the evolving developments in AI. He aims to explore this interplay in a series of three essays, the first of which, “Mass,” argues that Bitcoin will be the currency of choice for AIs.
Hayes visualized a scenario where advanced systems, such as a poetry-creating AI, would require a secure, blockchain-based digital payment system, such as Bitcoin, to transact. This is because, according to Hayes, Bitcoin effectively maintains its energy purchasing power over long periods of time.
Will AI Eat Bitcoin?
Arthur Hayes then explored AI’s basic needs and its “food sources” in a section titled “AI Must Eat” and made a comparison between AI and Bitcoin, suggesting the latter is the ideal “currency” for AI operations.
According to Hayes, AI needs two critical ingredients to exist and thrive: data to learn and strong computational power.
This data needs to be hosted somewhere, for which computers consume electricity. In addition, AI needs a robust network of computers to process and learn from this data, which also requires electricity. He simplified AI’s food resources to semiconductors and electricity, noting NVIDIA’s increasing success due to the vital role its GPU chips play in AI development.
Hayes also drew a fascinating thread connecting AI, Bitcoin and electricity. He compared the profitability of an AI, and by extension its entire existence, to its ability to produce more energy than it consumes. In this respect, AI is similar to humans, who also need to produce enough value to pay for their food and fuel. However, the “currency” an AI accepts for its output must maintain its purchasing power in kilowatt hours. Hayes claimed that Bitcoin was the perfect choice because it is energy money.
He further analyzed the origins and values of gold, fiat and Bitcoin, evaluating each based on scarcity, resistance to digital censorship and purchasing power of energy and concluded that Bitcoin is the logical currency choice for any AI as it is purely digital and censorship resistant. , demonstrably scarce and inextricably linked to the cost of electricity.
According to Hayes, the adoption of Bitcoin by AI systems could potentially lead to a significant increase in value if the cryptocurrency is used by AI, leading to a possible overlap of two separate manias: the mania of wanting to escape inflation within the fiat financial system and the mania of wanting to own a part of the next stage of human and computer evolution. He believes this could push investors to overpay for growth, exponentially increasing the value of the Bitcoin network.
Looking to the future.
While this is more of a speculative exercise than a concrete prediction, Hayes emphasized that the most money can be made when the market price adjusts from “could never happen” to “might happen.” This suggests that the idea of AI adopting Bitcoin and the subsequent rise in its value could be an opportunity to prepare for.
While Hayes acknowledged that he cannot predict the precise future of AI or human civilization, his observations and hypotheses illustrate possible future scenarios.
His exploration of the AI-Bitcoin symbiosis prompts us to consider the synergies and possible evolution of these two revolutionary technologies.
The first in this series of AI essays can be found at Hayes’ Substack blog.