AI & Crypto News: Arthur Hayes on Bitcoin and AI; Solana Labs's New AI NFT Tool

AI & Crypto News: Arthur Hayes on Bitcoin and AI; Solana Labs’s New AI NFT Tool

Updated: 08 July 2023

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Arthur Hayes, co-founder of BitMEX, recently released an essay arguing for Bitcoin’s potential to become the ideal currency for artificial intelligence (AI). He believes that, akin to humans, AI will also require a monetary mechanism to function at its best.

Bitcoin’s inherent traits of being always accessible, completely automated, and digital makes it uniquely suitable for the demands of AI. Hayes underlined that AIs must have continuous access to data and computational power – their version of ‘food’ – to stay operational.

Hayes expressed that a blockchain-based system can fulfill the AI’s need for 24/7 service in a way that the traditional, ‘balkanised,’ and analogue banking system can’t. Especially when transactions need to be made in very small increments, blockchain systems are advantageous, allowing AI to receive payments digitally.

While touching upon the need for a censorship-resistant payment system, Hayes argued for clear and straightforward rules from the get-go. Such measures would counter the high risks of deplatforming for an AI that lacks the capacity to comprehend the complex human laws and banking system regulations. Bitcoin, in Hayes’ view, aptly satisfies these conditions.

By using a blockchain-based payment system, [AI] … can also receive payments electronically in extremely small increments if needed.

Bitcoin‘s strength against censorship is due to the requirement for rule changes to be publicly proposed and approved by a majority of the network’s participants. Hence, no single entity holds the power to alter the network rules arbitrarily.

Hayes further pointed out the limitations of fiat currency and gold’s circulation through stablecoins on decentralized networks. The reserves backing these tokens are held with centralized entities, thereby posing the risk of freezing and censoring by the issuer. The example of Circle freezing USDC linked to Tornado Cash following Treasury Department sanctions against the privacy protocol last year underpins this point.

Focusing on the value maintenance aspect, Hayes argued for Bitcoin’s suitability as the top contender against AI’s ‘food’ – electricity. This can be attributed to Bitcoin’s defined supply of 21 million coins and the fact that its mining process utilizes electricity, thereby setting Bitcoin’s value over time.

Hayes dismissed the claim that Ethereum (ETH) could potentially be a better currency than Bitcoin, in light of its deflationary supply dynamics post the Merge. He stated that Ethereum’s additional applications disqualify it from being ‘pure money’ like Bitcoin and fiat currency. Emphasizing Bitcoin’s strength, he asserted, “Bitcoin’s value cannot be conflated with the actual utility of other stuff.”

Solana Labs Develops AI Tools to Aid Newcomers in Navigating the NFT Market

Despite a somewhat bleak outlook for the NFT sector in the news and data reports, Solana Labs insists there remains a keen interest from potential new participants. In response, the company is developing an AI-based tool designed to guide newcomers in their foray into the NFT market.

According to Tal Tchwella, Head of Product at Solana Labs, it can be quite daunting for a first-time buyer to make sense of the numerous data points within the NFT space. This is where Solana‘s AI tool comes in, helping users pinpoint and purchase non-fungible tokens that align with their specific requirements and preferences.

Tchwella acknowledges the hype surrounding certain NFT collections but also notes the authentic relationships that people form through these. He believes that AI can play a significant role in making this data readily available to those new to the web3 world, helping them find what truly resonates with them.

Tchwella also shared that Solana might soon introduce AI applications to help novice NFT buyers not only identify trending collections but also connect with communities that fit their profiles. This, he noted, is particularly important for those who are just entering this space and are keen on learning more and finding the right associations.

Even though the value of NFTs minted on the Solana blockchain often pales in comparison to high-priced digital assets on Ethereum, like Bored Ape Yacht Club and Azuki NFTs, Solana has shown promising growth in its ecosystem in recent months. Research data revealed that in May and June, Solana added a total of 10 million new digital wallet addresses, outpacing Ethereum’s addition of 4.8 million addresses during the same period.

Anatoly Yakovenko, Solana Labs’ co-founder and CEO, has previously emphasized the potential of AI in enhancing the usability and understanding of Solana, thereby contributing to the broader web3 and crypto development. This was brought to light when the company announced the release of a ChatGPT plugin.