Original author: 100 y
Original translation: TechFlow
Will the unknown part of the graph reconnect and follow the same trajectory as before?
Humans are pretty amazing creatures. While biological evolution is very slow, humans are using science and technology to change the world incredibly fast. Imagine our lives today compared to life a thousand years ago. Even though our appearances are similar and our cognitive abilities haven't changed much, the difference in living standards is huge.
However, no matter how rapidly the world changes, humans are ultimately limited by bodies and genes made of organic and inorganic materials. Instinct-driven struggles for wealth and power, class conflicts, wars to re-establish international order, and cycles of wealth and debt have existed throughout history and are likely to continue. The way humans respond to and behave in response to these problems is unlikely to change significantly over time.
This view suggests that by studying human behavior and responses to major events throughout history, we can predict future patterns. While we can’t predict the future with absolute certainty, unless there are dramatic changes in human biology or a fundamental shift in our collective mindset, such as a worldwide conversion to Buddhism and enlightenment, we can use the past to make educated guesses about future trends.
Many books published analyze the unchanging aspects of human society and our consistent responses to historical events. For example, Morgan Housel’s Business as Usual provides an insightful explanation of the persistence of human thought processes from a micro perspective. On the other hand, Ray Dalio’s Principles for a Changing World Order analyzes the repetitive nature of imperial history from a macro perspective. Both books are highly recommended to readers who are interested in understanding these persistent patterns.
Against this backdrop, this article aims to explore some of the major and inevitable trends facing humanity today and their potential impact on society, and to contrast them with similar situations in history. This article pays special attention to the shaky status of the US dollar and the rise of general AI (AGI), pointing out that both of them may pose significant risks due to their excessive centralization. Therefore, I believe that blockchain technology, which inherently promotes decentralization, will play a vital role in the future of human society. Each section of this article will delve into how the blockchain industry, led by Bitcoin, will ultimately shape our world.
1. An unavoidable topic: currency
1.1 The collapse of reserve currencies is inevitable
Money is a social contract established to facilitate transactions. Its legitimacy relies on the balance of power in the international order and the trust of its participants. Since human thought and emotional systems have not changed significantly over long periods of time, future monetary systems are likely to follow historical precedent.
Most people today have become accustomed to the U.S. dollar as the global reserve currency, using it without question in their daily lives. The U.S. dominance in military, finance, science, and various other fields has underpinned the dollar’s seemingly eternal status. However, humans tend to be overconfident about things they have not personally experienced. A brief exploration of the nature and history of money reveals that the lifespan of global reserve currencies is often shorter than expected.
The U.S. dollar has been the world’s only reserve currency since the establishment of the Bretton Woods system in 1944, which is only 80 years ago. Before assessing the current state of the U.S. dollar, it is instructive to review previous global reserve currencies. Before the U.S. dollar, the British pound was the world’s reserve currency, and before that, the Dutch guilder.
(History repeats itself as a reserve currency)
The rise and fall of the Dutch and British powers, and their tenures as holders of global reserve currencies, followed very similar patterns. They both began their rise after defeating declining powers. The victory fueled the development of capitalism and the advent of the Industrial Revolution, advances that made the countries more competitive and laid the foundation for their status as reserve currency nations.
However, history has repeatedly shown that the wealth and prosperity brought by global reserve currency status often sows the seeds of decline. Rising current account deficits and widening income inequality weaken national competitiveness and accelerate the accumulation of debt. Ultimately, huge debts caused by wars and currency devaluations force these once-powerful countries to cede their reserve currency status to emerging powers.
(Mount Washington Hotel in Bretton Woods | Source: Wikipedia)
The United States, currently the world’s leading superpower, has followed a similar trajectory. After the Civil War, the United States increased its competitiveness through the Second Industrial Revolution, the development of capitalism, and its geopolitical advantages. During and after World War I and World War II, the United States surpassed declining Europe to reach new heights in wealth and prosperity. As victory in World War II became inevitable, the United States convened a conference to reorganize the postwar financial order, adopting the Bretton Woods system and establishing the dollar as a reserve currency under the gold standard.
However, a reserve currency economy based on hard currency faces a dilemma. To use the US dollar as the main currency for international trade, there must be a sufficient supply of US dollars, which requires the reserve currency country to maintain a deficit. Although the gold reserves remain unchanged, the increase in the issuance of US dollars inevitably leads to currency depreciation and weakens international confidence in the reserve currency. This problem is called the Triffin dilemma.
The Cold War with the Soviet Union, the Vietnam War, and the oil crisis exacerbated trade deficits and inflation. When the United States could no longer meet gold redemption demands, President Richard Nixon ended the dollar's convertibility into gold in 1971. This caused the price of gold to rise dramatically from a fixed $35 per ounce to $850 per ounce in 1980, marking the beginning of the fiat currency era and the start of an era of high inflation.
Fortunately, thanks to Paul Volcker's unprecedented high interest rate policy of 20% per year and the successful establishment of the petrodollar system, the dollar re-appreciated. This recovery ushered in a period of economic prosperity for the United States in the 1990s.
(Source: FRED)
However, after the end of the Bretton Woods system, the way the dollar was issued changed fundamentally. Whenever the government needed money, it began to issue Treasury bonds, and the Federal Reserve printed money to buy these bonds, causing the money supply to increase rapidly. Government debt soared from $391 billion (34% of GDP) in 1971 to $34 trillion (120% of GDP) by the end of 2023. During the financial crises of 2008 and 2020, the government accumulated a lot of debt through this mechanism, causing the dollar to continue to depreciate.
How long can such a large government debt be sustained? This question raises a number of possible scenarios. One possibility is the emergence of an inflation fighter like Paul Volcker, who could take drastic measures to reduce the debt, even at the cost of a severe recession. Alternatively, disruptive innovations such as AI could boost supply and production, exerting sustained deflationary pressure on the economy, thereby extending the life of the dollar.
(Political Polarization | Source: Pew Research Center)
However, as mentioned earlier, currency is a social contract. Therefore, when the international community begins to lose confidence in the United States and its currency, the decline of the dollar will begin. The inevitable inflation of a reserve currency may exacerbate social problems such as income inequality and political polarization both domestically and internationally, further eroding trust in the dollar. Although there are no clear signs of the dollar's demise, a growing number of problems suggest that this scenario is increasingly likely.
(China loves gold | Source: Investing.com)
Geopolitical issues, not just inflation, could also weaken the dollar’s position. In response to Russia’s invasion of Ukraine, Western countries excluded Russia from the SWIFT banking system, prevented it from settling trade in euros or dollars, and froze half of Russia’s foreign exchange reserves held in dollars. These actions could undermine other countries’ trust in the dollar. For example, China has been steadily selling U.S. Treasuries and accumulating gold since the start of the Russia-Ukraine conflict, reducing its dependence on the United States.
History has proven that the power dynamics around currencies remain constant. Unless there is an unprecedented perfect monetary policy, any reserve currency will eventually lose its status. While no one can predict the exact time, the dollar will one day face its end. I can only hope that this moment comes as late as possible and as smoothly as possible.
1.2 Bitcoin as hard currency
As the dollar gradually loses credibility, assets such as gold will naturally attract attention. Gold has been valued from ancient times to modern times due to its scarcity and unchanging physical properties. During major conflicts, gold is recognized as the most reliable and ultimate asset internationally. Therefore, central banks of various countries always maintain a certain amount of gold reserves.
(Russians queue at a bank during the war | Source: Associated Press)
Today, individuals can invest in gold through various means such as mining company stocks, gold futures, and gold ETFs. These investment methods are generally more effective in countries with developed financial markets. However, if you live in a country with less developed financial markets, or a country directly involved in war or revolution, investing in gold may be very limited. These investment avenues do not involve direct ownership of gold and can introduce counterparty risk during periods of international unrest. In addition, purchasing and storing physical gold is not easy.
(Source: Kaiko)
In this context, Bitcoin can function as an excellent hard asset similar to gold. Its supply is limited, not controlled by any single entity, and it is particularly easy to store and transfer, even in critical situations such as wartime. For example, during Russia’s invasion of Ukraine on February 24, 2022, BTC/UAH trading volume and price surged, trading at a 6% premium to the international exchange rate. Even in less extreme situations, demand for Bitcoin is high in countries with unstable national currencies. In Turkey, where annual inflation is around 70%, Bitcoin trades at a premium similar to gold. These examples show that Bitcoin can indeed function as a hard asset.
(Source: BlockScholes, Yahoo)
From the above examples, we can see the great potential of Bitcoin as a hard currency in the future. But does this mean that citizens of developed countries who are currently protected by a stable currency system have no need to include Bitcoin in their portfolios? Even outside of crisis situations, allocating a portion of your portfolio to Bitcoin can bring substantial benefits in terms of diversification. As shown in the figure, while Bitcoin's correlation with other assets such as gold, stocks, and the US dollar fluctuates over time, it generally exhibits significant price fluctuations. This uniqueness makes holding cryptocurrencies such as Bitcoin a favorable choice.
(Source: K 33 Research)
In fact, many financial institutions in the United States have recently added BTC ETFs to their portfolios. According to K 33 Research, in the first quarter of 2024, 937 institutions reported holding Bitcoin ETFs in their 13 F filings. These include well-known companies such as JP Morgan, UBS, and Wells Fargo, as well as the Wisconsin Investment Board, which acquired a BTC ETF worth about $160 million. This trend shows that Bitcoin is increasingly being seen as a store of value.
(The surge in fast food prices)
The U.S. is once again increasing liquidity in response to the upcoming presidential election, even as the inflationary effects of COVID-19-era quantitative easing have yet to fully dissipate. The U.S. Treasury is expanding fiscal spending and plans to conduct its first bond buyback in more than 20 years starting May 29. At the same time, the Federal Reserve is also slowing the pace of quantitative tightening.
As a result, the dollar will continue to face inflationary pressures and be issued in large quantities during major economic recessions. Unless the United States can continue to innovate and maintain its leadership in the military, science, and industry, the value of the dollar will inevitably decline over time. In contrast, this will naturally increase the attention and value of Bitcoin.
However, in order to become a hard asset like gold, Bitcoin faces a key challenge: secure scaling and profitability of the network. The fundamental element of Bitcoin’s value is the security of its network. The more miners there are, the more secure the network is, and the more stable the value of Bitcoin is.
Bitcoin miners earn income in two main ways: block rewards and transaction fees. Block rewards are the bitcoins miners receive after successfully mining a block. The number of bitcoins is fixed and is halved every four years. Transaction fees are the fees users pay when they conduct transactions on the Bitcoin network and are unrelated to block rewards.
(Fees should be higher to achieve sustainability | Source: dune, @21co)
For miners to continue participating in the Bitcoin network, their mining revenue must exceed their costs. Since block rewards are halved every four years, mining revenue will gradually decrease, so the difference must be made up by increasing transaction fee revenue. However, unlike networks like Ethereum and Solana, the Bitcoin network has limited applications and low scalability, resulting in lower transaction volume and, in turn, lower transaction fee revenue. Recently, new token standards such as Ordinals and Runes have temporarily increased activity on the Bitcoin network, but there is no guarantee that these standards will significantly increase transaction fee revenue in the long term.
(Source: MacroMicro)
As of now, mining revenue has generally exceeded mining costs. However, as block rewards continue to decrease due to future halvings, miners may exit the network unless 1) the price of Bitcoin rises significantly, or 2) increased network activity brings in more transaction fee revenue. This will reduce the security of the Bitcoin network, weaken its intrinsic value, and may trigger a vicious cycle of further miner exit and reduced security.
This highlights a key difference between gold and Bitcoin. Gold’s intrinsic value is independent of profitability, whereas Bitcoin’s intrinsic value is directly dependent on it. Ensuring profitability is therefore a long-term challenge that the Bitcoin network must solve. While the Bitcoin community does not have a clear solution yet, innovations such as Odinals, Runes, and OP_CAT suggest that transaction fee revenue could increase in the long run.
2. Different than before: AI
2.1 Impact of AGI on Humanity
(Is this really the future of mankind? | Source: The Matrix)
Historically, unlike currency, technological innovations such as AI have always brought major changes to society. The steam engine, electricity, and Internet revolutions have changed the global industrial landscape and profoundly affected how humans work and live. Although these technological revolutions brought various social problems during the transition period, they ultimately provided humans with a more prosperous life. Steam engines and electricity liberated humans from most physical labor, while digital and Internet technologies liberated them from simple mental labor.
(Fun fact: Illia is someone you know, iykyk)
People have been researching AI technology since the 1900s, but there have been few breakthroughs. However, since the publication of the paper Attention Is All You Need that introduced Transformer theory in 2017, the pace of AI development has accelerated significantly. This breakthrough makes it easier to develop large language models (LLMs), bringing humanity one step closer to general AI (AGI). Like previous industrial revolutions, the development of AGI is expected to significantly increase productivity and have significant social impacts. But I think its impact will be different for several reasons.
First, AGI will liberate humans from almost all forms of labor. The previous industrial revolution liberated humans from physical labor and simple mental labor, allowing more people to engage in more complex tasks. However, AGI will be able to handle advanced mental labor, including creative activities such as art and music. Coupled with advanced robotics, this will greatly reduce the space for humans to contribute in the field of productivity.
(Source: Modern Lutheran Movement?)
Of course, that doesn't mean all jobs will disappear. Even in the 21st century, a portion of the population is engaged in agriculture and fishing, although this proportion is much lower than in the past. While most job types will remain with the advent of AGI, the number of people required to perform those jobs will decrease dramatically. For example, one person in the future can complete the work of ten people now, resulting in a significant increase in the number of unemployed people. It is worth noting that leading figures in the field of AI such as Elon Musk and Sam Altman believe that AI and robots will handle global productivity, leading to widespread unemployment among humans.
Some believe that efficiency can be maximized while maintaining existing employment levels, but this is a misconception. For this to happen, demand must increase in proportion to the significant productivity gains (supply) provided by AGI. However, for most fields, this is nearly impossible. New employment opportunities would have to emerge in new areas beyond the reach of AGIs, but as mentioned earlier, AGIs' abilities are not limited to physical and mental tasks, making this highly unlikely.
Secondly, AI is essentially a highly centralized technology. Even before AGI was implemented, the AI industry was already highly concentrated among large technology companies. This is due to the rapid development of AI technology. Since the introduction of transformer theory, the size of language models has increased by a factor of 10 4 between 2018 and 2022. As a result, there are significant technology gaps between core industries in AI technology.
(Source: @EricFlaningam)
Semiconductor Design: Unlike the consumer GPU market, NVIDIA has a near-monopoly on the data center GPU market for AI model training and inference. This dominance is partly due to its CUDA toolkit, which is widely used by AI developers. Demand for NVIDIA H 100 GPUs has surged, leading to longer delivery cycles. With this advantage, NVIDIA enjoys an operating profit margin of up to 78%, and the Blackwell GPU expected to be released at the end of 2024 will further consolidate its dominance. Although AMD Xilinx and Intel Altera are expanding their FPGA businesses, and tech giants such as Microsoft, Google, and Meta are also developing their own AI semiconductors (ASICs), these solutions are still inferior to GPUs in terms of market maturity and readiness.
(Source: Counterpoint)
Semiconductor manufacturing: The foundry industry, which is responsible for manufacturing designed semiconductors, also shows a serious imbalance. NVIDIA's A100 production requires a 7nm process, while H100 requires a 4nm process. These processes below 10nm are almost monopolized by TSMC, Samsung, and Intel, and A100 and H100 are mainly produced by TSMC. TSMC has committed to producing NVIDIA's H100 for at least the next three years. Given various factors, the gap between the leading position of the foundry industry and other companies is expected to continue to widen.
Computing power: AI companies need a lot of computing power for training and inference processes. This requires a large number of AI semiconductors such as H100, large data centers, and considerable electricity. According to Huawei, AI data centers are expected to account for 13% of global electricity consumption and 6% of carbon footprint by 2030. The cost is also considerable; as Huang Renxun pointed out in his keynote at NVIDIA GTC 2024, training a GPT-MoE-1.8T (GPT-4) model requires 8,000 H100 GPUs and 90 days. Therefore, due to the need to protect AI semiconductors and bear huge electricity costs, centralization of the industry is inevitable. Cloud services such as AWS and Azure provide computing power based on H100 and are also inevitably centralized.
AI Models: While some AI models, such as Meta’s Llama and Google’s BERT, are open source, many others are closed source. Compared to open source models, closed source models such as OpenAI’s GPT and Anthropic’s Claude often offer system development and better customer support, but their centralization brings disadvantages in terms of cost and transparency.
Data: Training AI models like LLM requires huge datasets. Legal arrangements such as Google paying $60 million per year to use Reddit’s data, but also numerous lawsuits regarding unauthorized use of data for AI model training, have heightened interest in data sovereignty.
In conclusion, in the AI industry, centralization is inevitable and achieving economies of scale is critical. As the AI industry becomes more centralized, there may be micro-level issues such as excessive corporate profiteering, unethical data usage, single points of failure such as server downtime, and opacity of AI models. On a macro level, we may face social chaos as the line between humans and AI becomes blurred and many people lose their jobs. I believe that blockchain technology, which inherently pursues decentralization, can serve as the antithesis of AI and solve the challenges associated with AI centralization. Let's explore how blockchain can be applied to the AI industry.
2.2 Blockchain can fix AI
Satoshi Nakamoto launched Bitcoin in 2008, advocating decentralization as a response to the unconstrained issuance of currency by central banks. Blockchain technology can also be applied to the AI industry in various ways as economies of scale drive the trend towards centralization.
Of the five highly centralized elements mentioned above, semiconductor design and production require concentrated expertise and a large number of production facilities, leaving little room for blockchain solutions. However, blockchain can be effectively applied to areas such as computing power, AI models, and data. In addition, it can also solve problems such as the spread of false information (including deep fakes) and provide basic income policy support for people facing large-scale unemployment. Let's explore the potential applications of blockchain technology in the AI pipeline.
Of the five highly concentrated elements mentioned above, semiconductor design and production require high specialization and a large number of manufacturing facilities, leaving limited room for blockchain solutions. However, blockchain has broad application prospects in the fields of computing power, AI models, and data. In addition, blockchain can also address false information issues such as deep fakes and support basic income policies for populations facing large-scale unemployment. The following are potential applications of blockchain in the field of AI.
Decentralized computing
Training and inferring AI models requires enormous computing power and hardware. Large technology companies continue to purchase GPUs such as NVIDIA H 100 for model training, exacerbating the global hardware supply shortage. While services such as AWS and Azure provide data centers for cloud-based AI model training and inference, they operate in a monopoly form, bringing high profits to users. In response to these challenges, new services that use blockchain technology to provide decentralized computing power have emerged.
For example, Akash and io.net, users can contribute the computing power of their hardware to the platform in exchange for incentives. There are also protocols that specialize in providing specific services. For example, Gensyn specializes in training AI models. General decentralized computing services can reduce costs by utilizing idle hardware, but it is challenging to perform state-related calculations (such as AI model training) in a decentralized manner. Gensyn solves this problem through concepts such as probabilistic learning proofs and graph-based precise point protocols. Gensyn focuses on training AI models, while Bittensor focuses on AI model reasoning. Users can submit tasks, and Bittensor's decentralized nodes compete to provide the best results.
zkML
zkML combines zero-knowledge (zk) cryptography and machine learning (ML) to enhance the privacy and transparency of AI models. Many AI models currently operate in a closed-source manner, leaving users unsure whether these models use the correct weights and perform reasoning. By applying cryptographic techniques such as ZK-SNARK (Zero-Knowledge Succinct Non-Interactive Argument of Knowledge) to ML models, it is possible to prove that the AI model correctly performs the reasoning process without revealing its weights, thereby achieving privacy and computational integrity.
(Source: Polygon ID)
ZK-SNARKs are a powerful cryptographic technique that can prove the validity of arbitrary computations without revealing the input data. To illustrate this, consider a real-world example: proving a person’s age online. Typically, this requires complex KYC verification involving the disclosure of personal information such as name and ID. With ZK technology, this process can be simplified and made more private. Once a user has verified their age with an official entity, they can generate and submit a ZK proof when they need to prove that they are over 18 years old. The proof does not contain any personal information, but still assures the verifier of the user’s age, making the identity verification process safer and simpler.
(Top: Standard ML, Bottom: zkML | Source: @danieldkang Medium)
Applying the same concept to ML models, consumers using closed-source ML models cannot be sure that the model honestly performed the computation on a given input. By integrating ZK-SNARKs, ML providers can assure consumers that the computation was performed correctly without revealing the inputs or weights. ZKPs (zero-knowledge proofs) of the ML reasoning process can be generated and verified by smart contracts on a neutral blockchain protocol, ensuring that anyone can trust the results.
(Source: Modulus Labs)
While the concept of zkML is very appealing, there are still significant challenges. Verifying a ZKP for a specific computation is relatively simple, but generating these proofs requires more computing power than the actual computation can actually perform. According to Modulus Labs, it takes about a minute to generate a ZKP for an 18M parameter ML model based on Plonky 2. Given that GPT-3 has 175B parameters and GPT-4 has 1.76T parameters, substantial progress will need to be made before zkML can be widely adopted.
Data sovereignty
As the AI industry continues to grow, the importance of data is growing exponentially. However, this surge has led to an increasing number of data sovereignty violations. Through blockchain technology, individuals can manage their identity-related information through self-custody, providing data only when necessary through digital signatures. In addition, blockchain enables transparent provision or sale of data through an incentive system or marketplace accessible to all. Reddit demonstrated the most blockchain-like approach to data sovereignty by offering long-term users the opportunity to participate in its IPO while signing a contract to provide data to Google. This move embodies a new path to data sovereignty.
Although slightly different from data sovereignty, blockchain also has the potential to solve problems in the data labeling industry. Data labeling is essential to improving the accuracy and ethics of AI models. Currently, this task often falls to low-paid workers, becoming a new social issue. For example, China’s AI industry exploits students from vocational schools, and OpenAI has outsourced this work to low-paid workers in Kenya. Integrating blockchain into data labeling can democratize participation and ensure fair pay.
Proof of character
Decentralized computing, zkML, and data sovereignty may solve some of the challenges of the AI industry. However, proof of personhood and universal basic income (UBI) can maintain human sovereignty in a society radically transformed by AGI. Let’s explore how blockchain can support human sovereignty in such a profound social transformation.
As AI models advance, AI-generated content in various forms (text, images, videos) is becoming more common. It is becoming increasingly challenging to distinguish whether these outputs are artificial. The acceleration of digitalization is inevitable, and with the surge in AI-generated content, related social issues will undoubtedly surge.
(Did Caitlyn Jenner really launch a memecoin?)
These questions are not just speculative, they are already happening. Fraud via deepfakes that mimic individual faces and voices has become all too frequent, resulting in huge financial losses. Due to deepfakes, the authenticity of videos is now often hotly debated online.
This was vividly illustrated by a recent incident involving Caitlyn Jenner. She announced the launch of a memecoin on the Solana network through Platform X. Given the unusual nature of the announcement, many suspected her account had been hacked. Although Caitlyn herself posted a video, there was still a lot of controversy about whether it was a deepfake. It wasn't until Caitlyn's agent also released a video that the controversy was slightly calmed down.
(Proof of Personality | Source: Worldcoin)
As we enter the AI age, one of the most critical challenges will be proving a person’s humanity in the digital realm. This concept, known as “proof of personhood,” is designed to prevent Sybil attacks and false information in the digital world. Currently, most applications rely on government-issued identity systems, such as passports or credit cards, to verify personhood. However, these approaches introduce privacy risks and the potential for single points of failure. Therefore, a true digital identity system is essential. Blockchain technology offers a solution that allows individuals to prove their humanity and the authenticity of the content they create, potentially alleviating problems like deepfakes.
(Iris scan via Orb | Source: Sam Altman)
The most common method of digital identity verification is biometric systems, which verify specific body parts. OpenAI CEO Sam Altman is promoting a project called Worldcoin, which combines blockchain technology with iris scanning. Users install an application on their mobile device and receive a private key (account) on the blockchain. By using an iris scanning device called Orb, users can verify their human identity in the digital world. Orb ensures that the user is indeed human and that the iris has not been registered, thereby securely granting a digital identity.
Orb only transmits a hash of the iris data to the server and then destroys the actual iris data. Users can later solve privacy issues by proving their human identity through ZK-SNARK without revealing their account address. However, potential issues such as hardware backdoors still need to be addressed. The importance of human identity proof is not limited to content authenticity, it also plays a key role in the concept of universal basic income (UBI), which we will explore in the next section.
Universal Basic Income
(Source: Scott Santens)
As mentioned earlier, the emergence of AGI is expected to bring about a productivity leap unprecedented in human history. However, such revolutionary progress will inevitably lead to the loss of a large number of jobs. In order to maintain social stability, the concept and necessity of universal basic income (UBI) has received increasing attention. The concept of UBI predates AGI and its origins can be traced back to Thomas More's "Utopia" in the 16th century. UBI requires providing regular and unconditional financial support to all members of society. An existing example of UBI can be found in Alaska, where the Alaska Permanent Fund Dividend provides a form of UBI that has demonstrated positive results in various aspects such as poverty, employment, and health.
However, the point here is not a UBI that simply improves quality of life, but a UBI that is sufficient to support individuals who lose their jobs due to AGI, ensuring they can live a full life without working. Elon Musk refers to this as a "universal high income". Similarly, Sam Altman has shown a keen interest in UBI, conducting research through OpenResearch. He has proposed innovative ideas, such as providing UBI in the form of assets and means of production (such as equity or computing power), rather than just cash.
Worldcoin, discussed by Sam Altman in the “Proof of Personhood” section, is also closely related to UBI. A key aspect of UBI distribution is ensuring that only genuine individuals receive it and preventing multiple claims by the same person. Therefore, preventing Sybil attacks is critical to implementing UBI. Worldcoin achieves this through iris recognition. Currently, users who undergo iris recognition through the Worldcoin app periodically receive WLD tokens, which are a form of UBI. Although I resonate with the vision of Worldcoin, I still have some concerns about the distribution of WLD tokens.
Even outside of Sam Altman’s Worldcoin, blockchain technology is integral to building a complete UBI system. Blockchain can improve transparency and efficiency not only for recipients through proof of personhood, but also for the distribution process, ensuring a more effective and transparent UBI delivery.
3. Humanity will need blockchain no matter what
Despite unprecedented crises such as the collapse of Terra and FTX, the blockchain market has quickly recovered its size. However, looking back at the previous and current market booms, there has been a clear shift in the industry's vision. In 2021, many protocols were driven by a grand vision of decentralization that captured the imagination and excitement of many. Now, despite similar market sizes, there seems to be widespread uncertainty within the industry and community about the direction of blockchain development. This is not due to any failure on our part or a flaw in blockchain technology itself; rather, it is simply that the current era has not yet created a pressing need for blockchain technology.
While it is interesting to observe the application of blockchain in niche markets, the industry must aim higher. As human history has shown, we will continue to experience cyclical monetary systems and revolutionary technological innovations. In these megatrends, blockchain will become a key technology to maintain human sovereignty.