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Crypto is the future of money in the age of AI
Balaji Srinivasan, former Chief Technology Officer (CTO) of Coinbase and prominent angel investor, recently shared his thoughts on the future interaction between cryptocurrency and artificial intelligence (AI) on his X (Twitter) account.
Srinivasan posits that cryptocurrency will become the predominant form of money as AI and robotics develop due to its inherent scarcity and security. This view has sparked a debate within the crypto community.
Scarcity and security: the pillars of the money of the future
Srinivasan outlined several reasons for this view. He emphasized that in the age of AI-driven abundance, cryptocurrencies represent a form of digital scarcity that will retain its value and importance.
Learn more: How will artificial intelligence (AI) transform cryptography?
He explained that cryptocurrency is particularly suited to proving human authenticity in a world. where AI can easily imitate human behavior. Additionally, while robots owned by individuals do not require monetary exchange to function, robots operated by different economic actors will require financial transactions. Cryptocurrency can facilitate these transactions efficiently and securely.
Srinivasan emphasized that while AI can create digital abundance, it does not eliminate all forms of scarcity. Critical resources, such as supply chains for manufacturing robots and infrastructure for AI data centers, remain limited. These resources, primarily located in Asia, highlight the continued need for a valuable and secure medium of exchange, which he believes is cryptocurrency.
One of Srinivasan’s key points was about the private keys needed to control robots in the AI era. He said these keys will likely be based on cryptographic technology because of its superior security compared to traditional Web2 systems.
“AI means digital abundance, but it doesn’t make everything abundant. Crypto is digital scarcity and complements AI abundance,” he said. concluded.
Crypto Meets AI: Expert Opinions on Future Integration
Srinivasan’s comments were in response to a request by Emad Mostaque, former CEO of Stability AI, who asked questions about the future of money and economic policy in a world populated by robots and AI agents. This discussion inflamed a debate within the crypto community, with some members arguing for a more Bitcoin-centric view, arguing that Bitcoin’s scarcity makes it a more viable candidate than other cryptocurrencies.
“Balaji replaced “crypto” with “Bitcoin,” and everything looks good because the money is converging into one. I can bet no autonomous AI agent/robot will accept Vitalik Buterin [and] Ethereum in charge of their monetary policy and therefore their purchasing power”, a crypto community replied.
Despite differing opinions within the community, Srinivasan’s broader point about the synergy between AI and cryptocurrency has gained attention. Industry reports like Bitwise predict that the integration of AI and the crypto industry could add up to $20 trillion to global GDP by 2030. This economic growth potential shows the importance of understanding and leveraging this emerging technological convergence.
Learn more: AI in finance: the 8 main use cases of artificial intelligence for 2024
Global impact of AI by 2030. Source: PWC
Dominic Williams, founder and chief scientist of DEFINED, shared his views on the potential of AI-crypto synergy. He noted that AI running on blockchain-based smart contracts could revolutionize various sectors, from decentralized finance (Challenge) to Web3 social networks.
Additionally, Williams highlighted that the security, autonomy, and composability inherent in smart contracts make them ideal for deploying AI applications on the blockchain. He also highlighted that decentralized AI could offer significant regulatory benefits, improve privacy and reduce risks from bad actors.
“They are tamper-proof, guaranteeing security and proper functioning; unstoppable, because they are resilient and always on the move; autonomous, requiring no trusted intermediary; and composable, making them easy to integrate with other blockchain systems and services,” he explained to BeInCrypto.
As AI evolves, its intersection with cryptography will likely shape the next phase of technological and economic development. Srinivasan’s vision of a crypto-dominated monetary system in the AI era reflects the growing recognition of the potential of cryptocurrency to address the unique challenges and opportunities of advanced AI technologies.
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