BitMEX co-founder Arthur Hayes: Bitcoin will become the currency of choice for AI projects
BitMEX founder Arthur Hayes described in his latest article "Massa" why Bitcoin is the most suitable medium of exchange for AI projects, and hopes that the narrative of "AI + Bitcoin" will become the driving force for the bull market in 2025.
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Arthur Hayes Looks Forward to AI Replacing Mundane Jobs
Arthur Hayes visited a unique café in Paris a few weeks ago, which only offers a 2-hour omakase dining experience and his passion for specialty coffee left Arthur amazed.
This experience led him to believe that such user experiences can currently only be achieved by humans. Therefore, he hopes that the development of AI can replace the tedious and mundane jobs that most people are currently engaged in.
This way, more and more people can pursue their true passions in their work.
Facing ChatGPT becoming the fastest technology adopted in human history, Arthur also started to contemplate the intersection between AI and the cryptocurrency field. How can he profit from the upcoming AI boom?
This will be the main focus of his upcoming three papers:
Bitcoin will become the currency of the AI field - this article
DAO and DEX: How will AI change the meaning of profit for enterprises?
Benefitting the most from the demand for AI data across various sectors
Why is Bitcoin the Preferred Currency for AI?
AI Requires Uncensored, 24/7 Payment Systems
Arthur emphasizes that the key point of this section is that traditional financial payment systems (TradFi) cannot sustain in an AI-driven economic system. He uses an AI poet as an analogy.
An AI poet writes poetry based on user prompts, needs to absorb all known poems, and continuously absorb new poem data. This means that the distributor of the AI poet must constantly pay different data providers to acquire more data samples.
Arthur believes that what AI poets need is a 24/7, digital, and fully automated payment system. Systems like banks that only operate during regular business hours from Monday to Friday are not suitable.
Some may argue that new payment providers like PayPal can meet the demand, but Arthur points out that institutions like PayPal still have to comply with banks and lack an uncensored mechanism.
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AI Projects Must Speculate in Coins?
Arthur mentions that AI requires a significant amount of computing power to operate, hence needing a currency that can hold its value in the long term.
Returning to the AI poet, it requires substantial computing power, a lot of storage space to host data, and its profitability must exceed these operational costs. Therefore, a currency accepted by the AI poet that can maintain high purchasing power is more likely to be profitable.
In Arthur's mind, this currency is undoubtedly Bitcoin.
Bitcoin, Gold, and Fiat Currency
Arthur compares Bitcoin, gold, and fiat currency, analyzing how their purchasing power, scarcity, production cost, and censorship resistance will evolve over time.
Scarcity:
Gold: Limited supply on Earth, unknown on other planets.
Fiat Currency: Decided by governments.
Bitcoin: Fixed total supply.
Censorship Resistance:
Gold: Digital forms of gold require trust in third parties and are not censorship-resistant.
Fiat Currency: Controlled by governments and lacks censorship resistance.
Bitcoin: Completely censorship-resistant.
Energy Purchasing Power Cost:
Gold: Can be mined using various energy sources, but costs vary, making value definition difficult.
Fiat Currency: Almost zero cost.
Bitcoin: Mining, electricity costs determine Bitcoin's value.
Arthur Hayes: Bitcoin Triumphs
Whether in censorship resistance, scarcity, or energy purchasing power, Arthur believes Bitcoin emerges victorious.
Arthur specifically points out that fiat currency should not be the currency for AI. Assuming AI lifespans far exceed human lifespans, one should not trust anything involving humans because fiat currencies typically require governance by human-formed governments.
Gold and Bitcoin can be mined by AI-driven robots, with Bitcoin being more suitable as the preferred currency for AI compared to gold.
Arthur hopes that the narrative of AI + Bitcoin will become mainstream, serving as a catalyst for the bull market expected in 2025 and 2026. He summarizes the above reasoning becoming a reality:
Bitcoin Price = Moon Landing