Arthur Hayes, co-founder and former CEO of BitMEX, has proposed that Bitcoin could become the preferred currency for the rapidly advancing domain of artificial intelligence.
In a recent blog post titled “Massa,” 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 usher in a new renaissance of art and culture.
Future AI adoption and Bitcoin.
Hayes acknowledged the intimidating question about AI potentially overshadowing human capabilities. As he noted,
“Ever since the first computers came online during WW2, 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 cusp of a significant shift, with AI set to go viral and alter the course of humanity.
As an example of the rapid adoption of AI, 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 proposed, offers a glimpse into how swiftly AI integration into daily life can alter societal norms.
Regarding AI’s potential impact on the crypto industry, Hayes suggested that, as a businessman, he views AI’s increasing prevalence as a double-edged sword. He is drawn to it due to AI’s significant influence on humanity’s future and subsequent value. Yet, he is also wary of the initial investment into a new technological advancement, as he believes it is typically overpriced.
Massa
In anticipation of the upcoming ‘AI mania,’ Hayes plans to leverage his deep understanding of the crypto industry to identify its intersections with the evolving developments in AI. He aims to explore this interplay in a series of three essays, the first of which, “Massa,” 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 necessitate a secure, blockchain-based digital payment system, like Bitcoin, to engage in transactions. This is because, according to Hayes, Bitcoin effectively preserves its energy-purchasing power over long periods.
Will AI eat Bitcoin?
Arthur Hayes then explored the basic needs of AI and its “food sources” in a section titled “AI’s gotta eat” and drew a comparison between AI and Bitcoin, suggesting that the latter is the ideal “currency” for AI operations.
According to Hayes, AI necessitates two critical ingredients to exist and thrive: data for learning and strong computational power.
This data must be hosted somewhere, which requires computers to consume electricity. Moreover, AI needs a robust network of computers to process and learn from this data, which also requires electrical power. He simplified the AI’s food sources down to semiconductors and electricity, noting the rising success of NVIDIA due to the essential role its GPU chips play in AI development.
Hayes also drew a fascinating thread connecting AI, Bitcoin, and electricity. He likened the profitability of an AI, and by extension, its entire existence, to its ability to output more than it consumes in energy. In this regard, AI is similar to humans, who also need to produce enough value to afford their food and fuel. However, the ‘currency’ that an AI will accept for its output must maintain its purchasing power in kilowatt-hours. Hayes asserted Bitcoin was the perfect choice, being energy money.
He further broke down the origins and values of gold, fiat, and Bitcoin, evaluating each based on scarcity, digital censorship resistance, and energy purchasing power and concluded that Bitcoin is the logical currency choice for any AI, being purely digital, censorship-resistant, provably scarce, and intrinsically tied 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 starts to be utilized 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 phase of human and computer evolution. He believes this could drive investors to overpay for growth, causing the value of the Bitcoin network to rise exponentially.
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 “can never happen” to “maybe could happen.” This suggests that the idea of AI adopting Bitcoin and the subsequent surge in its value could be an eventuality to prepare for.
While Hayes acknowledged that he cannot predict the precise future of AI or human civilization, his observations and hypotheses illustrate potential future scenarios.
His exploration of the AI-Bitcoin symbiosis prompts us to consider these two revolutionary technologies’ synergies and possible evolution.
The first in this series of AI essays can be found on Hayes’ Substack blog.
