When AI Gold Rush Meets Crypto, AI Agents Make Crypto Products Easier to “Fly into Ordinary People’s Homes”

AI proxy will completely reorganize the current trajectory of global cryptocurrency adoption, covering all application verticals.

Original: AI, Crypto, and America

Author: Derek Edws, Managing Partner at Collab+Currency

Translator: Zen, PANews

Cover: Photo by Martin Martz on Unsplash

I am no longer confident that our traditional strategic playbook can address the new realities of the future - especially given the astonishing acceleration of AI technology and its disruptive potential for the American workforce.

America must start moving towards a new framework to adapt to the new labor reality. This begins with understanding the two most disruptive technological innovations of the past two decades: AI and Crypto.

Artificial Intelligence

Thirty years ago, the first internet search engines emerged. Their value seemed simple - to index the world's data. Twenty-five years later, OpenAI's ChatGPT has become the fastest-growing consumer application in history. The product has 300 million weekly active users and over 10 million monthly paid subscribers. In less than two years, the product is on track to generate around $3 billion in annual revenue.

What is the value of these AI systems? It is the combination of "retrieval" and "completion". Simply put:

1. Request any task in natural language;
2. Have the computer intelligence handle the completion of the task.

Over the past three months, we have seen these products rapidly improve in their ability to fulfill task requests, spanning text, math, audio, video, geometry, programming, and more.

So far, the scaling assumptions for AI systems have held true: more data, more compute power, and better models. Additionally, new scaling dimensions are being explored, like test-time compute. Last month, OpenAI's latest reasoning model scored 25% on a frontier math benchmark, which only deep domain experts could previously solve.

These next-generation reasoning models are adapting to new tasks, producing observable results. Meanwhile, new advances in robotics are making machines increasingly capable of complex physical tasks. Intelligent, humanoid hardware will work tirelessly, never taking a day off or going on strike.

The release of this technological productivity is not unprecedented - the Industrial Revolution of the 18th century and the Digital Revolution of the 20th century have greatly reduced costs, improved efficiency, and transformed various forms of labor markets and economic structures.

But artificial intelligence seems to be a different type of technological revolution. These systems can create value in unprecedented ways, surpassing traditional cost structures. Anthropic's CEO Dario Amodei believes that artificial intelligence could bring us close to 50 to 100 years of biological progress in the next 5 to 10 years, as long as we shift most of our human labor structure to artificial intelligence systems.

As the infrastructure supporting these systems continues to develop, I believe two trends will gradually emerge globally:

• The cost of all cognitive labor will tend towards the cost of running artificial intelligence systems;
• The cost of all physical labor will tend towards the cost of robotic mechanical parts.

The promise of this technology is clear:

• Unlimited outcomes;
• Dramatically lower prices;
• Across every value category.

For the purpose of this article, let's assume the above trends hold true. As someone who firmly believes that the next generation of Americans should have the same opportunities as their predecessors, I have two lingering questions: First, how can America leverage its advantages to win the artificial intelligence revolution? Second, how can individual Americans participate in the future benefits of artificial intelligence systems, given their disruptive potential for human labor?

Cryptocurrencies

In 2008, Satoshi Nakamoto released the Bitcoin whitepaper. The paper proposed a new, gamified accounting system where a distributed network of computers could work together to achieve a shared digital consensus on the Bitcoin ledger.

Today, Bitcoin has become the world's most powerful supercomputer. The scale of this network far exceeds the combined network scales of companies like Amazon, Google, and Microsoft. However, after fifteen years of development, blockchain still appears clunky:

• Poorly written code can have vulnerabilities, leading to theft or account balances being reduced to zero;
• User errors in managing private keys are the biggest cause of cryptocurrency thefts last year;
• Decentralized applications are more difficult to use than traditional Web applications, resulting in extremely high user attrition rates.

Despite these limitations, engagement with cryptocurrencies has reached historic highs. One study estimates that 40% of the US population now owns cryptocurrencies, up from 30% in 2023. Globally, there are around 24,000 active developers participating in blockchain and blockchain application development each month, far exceeding the 1,000 developers per month a decade ago.

Despite all these constraints, why are cryptocurrencies still growing? I believe it is because cryptocurrencies possess five unique characteristics that work together in a way that cannot be replicated by any other database architecture:

1. Digital Ownership. Blockchain databases are global, fully auditable, community-owned, tamper-resistant, and run 24/7. Through blockchain, individuals can own any digital object on the internet, establishing the first global digital property rights system.
2. Coordinated Incentives. Through self-executing contracts, blockchain-based protocols can leverage programmable incentive mechanisms to coordinate new forms of digital work on the network. These incentives can be used to reward those who use the product or service, provide economic security, contribute core code, provide market supply or demand, or refer others to use the product.
3. Frictionless Micropayments. Today, most internet companies must adopt subscription, bundling, and ad-supported business models due to high transaction costs. This constraint limits innovation in internet business models and prevents the emergence of consumer-friendly alternatives. Blockchain databases can enable digital payments globally with zero friction and low cost - bypassing the inefficiencies of traditional payment systems and without the risk of chargebacks. Additionally, any crypto asset can be divided into infinitesimally small units.
4. Shared Standards. By leveraging shared settlement standards on the blockchain, various protocol tokens, stablecoins, applications, games, and financial services can seamlessly integrate with one another, like Lego bricks.
5. Distributed Security. Blockchain networks are typically distributed across multiple global nodes, eliminating single points of failure. This decentralized architecture makes it much harder for malicious actors to attack these network systems, as they would need to control the majority of nodes simultaneously.

Today, the crypto economy has a market capitalization of around $3.6 trillion, spanning multiple emerging domains.

Over the next decade, I believe the crypto economy will be repriced and rise significantly, driven by two key intersections of trends: (1) AI and crypto infrastructure; (2) AI and crypto applications.

AI and Crypto Infrastructure

To understand the current landscape of AI infrastructure, it can be helpful to look for historical parallels.

In 1849, the California Gold Rush quickly attracted massive investment. To facilitate rapid transportation, hundreds of new roads were built. The port of San Francisco became one of the busiest in the world, shipping out gold miners, goods, and tools to all corners of the globe. A powerful banking and financial system emerged to support the needs of the new global enterprises. The infrastructure investments of that era laid the foundation for the region to become an economic powerhouse.

175 years later, the world is witnessing a similar gold rush, this time aimed at creating Artificial General Intelligence (AGI). However, the infrastructure supporting AI is not limited to a specific region; the networks of data, computing power, and electricity are being built by competitors globally.

Unsurprisingly, the capital and computing power required to train, optimize, and deploy AI infrastructure is extremely expensive, affordable only to a few companies. Conservatively, the cost of a single training run of GPT-3 exceeds $4 million, while the training cost for GPT-4 is estimated to be over $60 million.

More capital, more computing power, better performance.

While I am immensely proud of and supportive of America's contributions to artificial intelligence in traditional corporate forms, I also believe it is necessary to acknowledge their structural limitations:

• Capture value. While centralized companies can leverage venture capital to drive important AI innovations, the economic benefits of these products are limited to a few shareholders, restricting their broader impact on society.
• Proprietary knowledge. Advances in technology frameworks are often concentrated within centralized companies, limiting the opportunities for others to access critical breakthroughs - while information now flows 24/7 at internet speeds.
• Opaque systems. Concentrating AI within opaque, closed-off centralized systems makes it difficult for independent auditors to scrutinize the company's practices in areas like data collection, security, and accountability.
• Closed competition. The massive computational resources required to develop advanced AI pose a significant barrier to market entry for new products, with only a few well-funded companies able to continuously overcome technological bottlenecks.

By combining the United States' AI infrastructure with the five unique properties of cryptocurrencies - digital ownership, coordinated incentives, frictionless micropayments, shared standards, and distributed security - I believe we can mitigate the negative impacts of centralized AI and restore the competitive spirit that has long characterized the U.S. capital markets. Furthermore, by integrating the United States' AI infrastructure with cryptocurrencies, I also believe this will lead to superior AI systems: (a) higher transparency, and (b) more equitable ownership among the millions of future participants.

(a) Better performance

To understand the breakthroughs AI can achieve without massive funding, one can look at the DeepSeek team. Two weeks ago, this China-based research group released DeepSeek-V3, a 670B parameter model that performs on par with many closed-source SOTA models, including GPT-4o and Claude-Sonnet-3.5. DeepSeek has not received any venture capital to date.

As open-source projects like Bitcoin and Ethereum have demonstrated, programmable incentives distributed to a global contributor pool can greatly amplify the qualified labor and computational networks, forming more powerful forces than single laboratories or centralized systems. From this perspective, creating systems that reward AI labor and computational networks is not much different from creating systems that reward Bitcoin labor and computational networks.

A few examples:

• For improved training data, crypto networks can reward human contributors of high-quality annotated datasets - including private data, proprietary intelligence, or information not captured in traditional web crawling.
• For more powerful computational networks, crypto networks can incentivize individuals and organizations to contribute computing power through decentralized markets - without upfront capital investment, rapidly building a global machine network.
• For more efficient model training, open-source developers can receive rewards for customized contributions, improvements, and optimizations to existing models. Furthermore, when code and model weights are public, hundreds or thousands of researchers and developers can simultaneously release improvements, debug issues, fine-tune customized models and agents, and create new applications on top - all coordinated through the network's incentive mechanisms.

Over time, I believe this broad collaborative approach pioneered by decentralized projects like Nous Research, Prime Intellect, and Bittensor will surpass what resource-rich private companies can achieve internally.

(b) Higher transparency

Open-source AI models allow the research community to thoroughly examine their training processes, architectures, and behaviors, and make improvements. This transparency helps identify potential risks or biases early on, leading to more reliable systems that people can trust. By leveraging blockchain in this process, the entire lifecycle of creating, rewarding, and improving AI protocols can be kept transparent and auditable.

(c) More equitable ownership

Crypto networks designed for the various verticals of the AI technology stack will establish more equitable ownership structures than existing centralized models. Through programmatic incentives, all contributors and participants in the crypto protocols can be transparently rewarded.

Furthermore, the complete markets that form around the different categories of work in the AI infrastructure stack will drive more granular competition across AI design domains. Data, computation, training, and deployment categories and subcategories can compete and accrue value in independently.

However, the ultimate beneficiaries are not just the AI infrastructure. I believe AI agents will fundamentally reorganize the current trajectory of global cryptocurrency adoption - across all application verticals.

AI and Cryptocurrency Applications

The complexity of cryptocurrency applications has long been seen as a major barrier to widespread adoption. Over the past fifteen years, blockchains have required users to navigate complex approval flows, manage private keys, and understand complex UI patterns - all beyond the grasp of most internet users.

However, with the emergence of agent technology, these user patterns are rapidly changing. If you view AI models as responsive infrastructure, making decisions based on prior training data, then you can view AI agents as proactive applications - integrating models into new architectures to accomplish narrow objectives.

In simple terms, AI agents leverage foundation models to think automatically, plan automatically, and execute actions automatically. The key to understand is that agents differ from what we've known as "robots" in the past. Unlike robots, AI agents can reason on-demand. They can analyze their own performance, adjust strategies, and solve complex tasks that sometimes require hundreds or even thousands of unique steps.

In September 2024, I met with a founder in my portfolio who is building an AI agent protocol for blockchain navigation, called Wayfinder. Through his phone, using a few simple natural language prompts, I deployed a frontend and token contract, replicated Bitcoin's monetary policy onto the BASE blockchain, and bridged ETH from the Ethereum mainnet - all in under 5 minutes and with just a handful of prompts.

Applications like Wayfinder demonstrate an important trend: AI agents will mediate the long-standing technical frictions of cryptocurrencies. Over the next 12 months, agents will translate blockchain's complex structures into seamless natural language interactions, increasing protocol accessibility, shielding users from their own mistakes, helping developers deploy safer code, and dramatically reducing consumer churn in complex decentralized products and services.

More importantly, key management networks will extend all these agent capabilities, allowing agents to execute tasks across blockchains without human involvement. Global namespace networks will enable each agent's actions to span all blockchains, connected to a human identity.

In summary:

Crypto agents make it easier to build or use any crypto product, regardless of blockchain.

• In DeFi, agents will compress the financial frictions of cryptocurrencies into each user's risk appetite through simplified natural language instructions.
• In crypto gaming, agent workflows will enable the personalized and ownable generative assets, more complex NPCs, and chain-native experiences tailored for players in the crypto economy.
• In DAOs, humans will agree on overall policy goals and constraints, and allow agents to execute across business, protocol, or administrative functions.

These guiding roles and advantages bring revolutionary breakthroughs from zero to one for all crypto applications. Millions of new users will join in this way, with no domain left untouched.

AI, Cryptocurrencies, and Ownership

In understanding the grand trends before us, it is important to reflect on and remember the lessons of our history. For most of human history, the ability to secure and defend resources meant the difference between survival and extinction. The modern property rights system is a product of millions of years of this evolutionary pressure. The concept of property rights has been so crucial to human experience that it was enshrined in the U.S. Constitution (5th Amendment). The Founding Fathers of America viewed property rights as a cornerstone of our system of governance and way of life.

Economists have long argued that strong property rights are the cornerstone of economic growth. They are crucial for individuals to safely create income, store wealth, and use these assets for credit and investment over time.

Multiple studies also support this view. Research on more than 100 countries from 1990 to 2002 showed that countries with stronger property rights grew faster than those with weaker property rights, partly because they were better able to promote technological growth and improve resource allocation.

From the perspective of property rights, blockchain is a core competitive technology. They are the most powerful technological foundation for global digital information, capable of providing immutable record keeping, encrypted secure ownership, distributed security, and programmatic execution of rights through smart contract programs.

As the United States enters the digital intelligence era, blockchain can also serve as the standard environment for all AI infrastructure and applications, ensuring that the US AI system can benefit from the structural support of the five unique features of cryptocurrencies. Historically, the United States has created unprecedented opportunities, both for individuals and for the nation - from breaking free from colonial rule, to the constitutional promise of individual freedom, to the struggle against racial segregation, and the fierce market competition and entrepreneurial spirit.

Today, on the threshold of AGI, I believe the United States has an important opportunity to further consolidate its leadership in these same dimensions. Aligning the US AI policy goals with cryptocurrencies will unleash unprecedented individual participation in open source networks, driving incentivized contributions across all layers of the AI stack. Broad participation in our AI market will stimulate competition, encourage new forms of bottom-up mobilization, and bring broader social impact.

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