Renowned figure in the crypto market, Arthur Hayes, has made a bold prediction regarding the future of artificial intelligence (AI) and cryptocurrencies. Hayes believes that Bitcoin will become the preferred currency for AI entities in the coming years. His argument is based on the inherent characteristics of Bitcoin that make it ideal for the needs and mechanics of AI.
Efficient Payment System for AI
Hayes emphasizes the importance of AI entities interacting with the economic ecosystem. He introduces the concept through a hypothetical AI entity called “PoetAI,” which creates poetry based on natural language prompts. This model requires an efficient and reliable payment system as it charges a fee for its services.
The requirements for such a payment system are strict. It needs to be digital, automated, and available 24/7 without geographical limitations or dependence on banking hours. According to Hayes, traditional banking systems and digital payment platforms like PayPal fail to meet these needs due to their limitations and susceptibility to censorship.
Hayes argues that only a blockchain-based system, resistant to rule changes and deplatforming, can fulfill the requirements. Among blockchain-powered currencies, he narrows down the choice to Bitcoin, citing its properties of censorship resistance, scarcity, and digital nature.
Energy-Powered Currency for AI
The sustenance of an AI entity relies on data and compute power, both of which consume electricity. Hayes points out that the currency accepted by an AI should maintain its purchasing power relative to the cost of electricity.
Bitcoin emerges as the AI currency of choice according to Hayes. Its scarcity, censorship resistance, and energy purchasing power make it a superior option compared to gold or fiat currencies. Bitcoin’s value is intrinsically linked to the cost of electricity, making it suitable for AI entities.
Bitcoin Price Predictions
Hayes envisions two concurrent trends: the search for an escape from fiat inflation and the desire to capitalize on the merger of human and AI progress. He believes that the growth investment fervor will peak between 2025 and 2026.
Hayes presents three scenarios based on the size of the AI economy: low, median, and mania. Depending on the AI’s share of global GDP, the market cap to daily transaction value of Bitcoin could multiply from 8x to 172x. This results in Bitcoin’s price ranging from $64,934.51 to $760,591.96.
These predictions highlight the tremendous potential for Bitcoin’s price growth, suggesting a future where Bitcoin experiences unprecedented increases in value.
The views and predictions mentioned above are based on Arthur Hayes’s perspective and should not be considered financial advice. Cryptocurrency investments carry inherent risks, and it is essential to conduct thorough research and consult with a financial professional before making any investment decisions.