Will artificial intelligence need currency to operate in the same way humanity does? BitMEX co-founder Arthur Hayes says yes—and that currency will be Bitcoin (BTC).
In an essay published on Thursday, Hayes outlined why Bitcoin will be “chosen by AIs” as the most logical money with which to calculate their economic decisions, and the best payment rail with which to carry them out.
For starters, AI will necessarily require a payment system that is “available at all times, digital, and completely automated.” That’s because it must constantly be able to pay for two critical forms of “food”—data and compute power—in order to “stay alive.”
According to Hayes, the “balkanised,” analogue banking sector cannot provide this sort of 24/7 service, but a blockchain-based system can.
Normies Don’t 'Actually Care About Decentralization': Arthur Hayes
Decentralization may be core to crypto’s DNA, but the same cannot be said about people’s preferences when engaging with digital assets, said Arthur Hayes. The distribution of decision-making and control is an essential component of Satoshi Nakamoto’s vision for Bitcoin in 2008, well before the dawn of the digital assets industry. But Hayes, the former CEO of cryptocurrency exchange BitMEX, suggested this central tenet isn’t important to the masses. “At the end of the day, the average person d...
“By using a blockchain-based payment system, [AI] … can also receive payments electronically in extremely small increments if needed,” he added.
An AI payment rail must also be censorship-resistant, and enshrined with “clear and transparent” rules from the outset, Hayes explained. This is to avoid the risk of deplatforming, which is “high and undesirable” for a robot that does not intrinsically understand human laws, or the “opaque and intentionally unintelligible” rules of the censorious banking system.
While not all blockchains are necessarily permissionless or censorship-resistant, Bitcoin certainly fits the bill.
“Bitcoin is censorship resistant because the only way the rules can change is a public proposal is put before the entire network and the majority decides,” Hayes wrote. “There is no singular entity that can arbitrarily change the network rules.”
While fiat currency and gold can technically circulate on digital, decentralized networks using stablecoins, the reserves backing such tokens must be held with centralized entities. As such, stablecoins can be frozen and censored by their issuer, such as when Circle froze USDC linked to Tornado Cash following Treasury Department sanctions against the privacy protocol last year.
gm: Arthur Hayes Says Crypto Failures Are A Sign of The System Cleansing Itself
Arthur Hayes says the speed at which projects like Terra grow and implode is a feature of the crypto industry, not a bug. He founded crypto exchange Bitmex in 2014 and then became the original crypto bad boy. In 2021 the DOJ charged him in with violating the U.S. Bank Secrecy Act for not implementing an anti-money laundering program at Bitmex. He plead guilty and was sentenced to two years probation and six months of home detention. In fact, he was still sporting an ankle bracelet on a recent cover of New York Magazine. Now he's living in Singapore, offering up his views on the crypto industry with long form, meme-filled essays, and still thinks the crypto industry will save investors from what he calls a broken banking system. "I don't care if you're capitalist or you're a communist. Everybody put on a lot of debt. We've passed the point where that debt is becoming useful," he said. "And therefore everyone is going to take an L unless they get some crypto or some gold—some hard asset that's outside of the traditional banking system."
Finally, the ex-CEO argued that Bitcoin is best suited to maintain its value over time against AI’s electricity “foodstuffs.” Not only is the asset programmatically capped at 21 million coins, but is also mined directly using electricity, which therefore “defines the value of Bitcoin over time.”
Some have argued that Ethereum (ETH) could make stronger money than Bitcoin due to its deflationary supply dynamics following the Merge. However, shortly after the upgrade, Hayes claimed that ETH doesn’t qualify since it has other applications, unlike Bitcoin and fiat currency which are “just money.”
“That’s what makes [Bitcoin] good money, because its value cannot be conflated with the actual utility of other stuff,” he said at the time.
