Hayes said artificial intelligence requires an automated digital payment system based on blockchain.
Arthur Hayes, co-founder and former CEO of cryptocurrency exchange BitMEX, believes Bitcoin (BTC) will be chosen by artificial intelligence (AI) as the currency for future economic activity.
In a lengthy Substack article published on July 7, the American entrepreneur laid out the reasons for his beliefs, presenting arguments and conclusions to prove that the traditional financial system is unsustainable for an AI-driven economy.
AI Currency Selection
Hayes bases his argument on the financial needs of AI machines and their key inputs. He compares the monetary properties of gold, fiat currencies, and Bitcoin, assessing their importance to AI machines.
To meet the financial needs of AI, Hayes posits that such machines will need to use a blockchain-based digital payment system that is always available and fully automated. The traditional banking system, which functions primarily during human waking hours and is divided between different regions, is not well suited.
A blockchain-based system, whose rules are outlined in clear and transparent code, would enable AI machines to pay their data providers and receive the same service.
very suitable
Hayes explained that for any currencies to be suitable for an AI-driven economy, they must have a limited supply, be censorship-resistant, and have energy purchasing power.
While gold has a finite supply on Earth, the BitMEX co-founder insists that the supply of gold in the wild is unknown. Since gold bars are a physical commodity, the only way to use their digital representation is to trust a centralized entity to issue a digital certificate for gold; therefore it is not censorship-resistant. Furthermore, the value of gold cannot be defined by an energy derivative, as the asset can be created from a variety of sources.
In contrast, fiat currencies, in both physical and digital forms, have an unlimited supply because governments control their issuance. Centralized regulation makes the currency censorship-resistant and its value is determined more by the politics of the government than by its natural energy wealth.
Finally, Bitcoin has a limited supply of 21 million. However, due to its decentralized network, the asset is purely digital and censorship-resistant. Since new Bitcoins can only be created by computers, the cost of electricity determines its value over time.
“Bitcoin is therefore the logical choice of currency for any AI,” Hayes said. “It is purely digital, censorship-resistant, provably scarce, and its intrinsic value is entirely dependent on the cost of electricity. There is nothing that can challenge Bitcoin on these counts today.”
