AI And Bitcoin – A Synergy For The Future
“AI And Bitcoin – A Synergy For The Future“ Forbes, 8 December 2023
The intersection of bitcoin and Artificial Intelligence is leading in a new era of digital innovation, particularly highlighted by the integration of AI with Bitcoin's Lightning Network. This union is poised to revolutionize aspects of the internet, from micropayments to AI-driven online economic agents.
The Lightning Network
AI models, which are capable of recognizing patterns and making determinations from previously unseen datasets, are becoming increasingly sophisticated. This advancement in AI is significantly expensive, with the cost of training models like GPT-4 exceeding $100 million. The Lightning Network, with its capacity for micropayments and low fees, offers a sustainable solution for the foundational training of AI by facilitating the collaboration and cost-sharing among organizations. This approach democratizes AI development, making it accessible beyond major corporations.
Fine-tuning AI models, an essential step in AI development, can benefit from the Lightning Network. By enabling micro and instant payments, individuals worldwide can participate in fine-tuning AI, getting paid per task in bitcoin. This system leverages the global reach of the internet, with around 4.32 billion active mobile internet users potentially becoming part of the AI development process. This model aligns with the early days of bitcoin, where users earned the digital currency for tasks like solving captchas.
The Lightning Network stands out for its capacity to operate at speeds paralleling those of an interconnect, greatly exceeding even the fastest node-verified blockchains. This speed is crucial when AI systems communicate and transact with each other.
In scenarios where AI entities are transacting for services, the delay of even a few milliseconds is unworkable. Only the Lightning Network offers this high-speed transaction capability at a scalable level. This speed advantage positions the Lightning Network as an indispensable tool for AI-driven economic activities, where swift and efficient microtransactions are key.
Once AI models are developed, they are served through software installed in data centers. The Lightning Network could facilitate a more equitable pay-per-use model, where users pay only for the AI resources they utilize. This system could also allow individuals with high-end GPUs to earn income by offering their hardware for AI computations, creating a decentralized network of AI processing power.
The Convergence of Bitcoin Mining and AI Development
The synergy between bitcoin's Proof of Work and AI highlights a new dimension. Bitcoin mining and AI development share a common need for high-end computer chips and robust data processing capabilities. This overlap has led to a pivot in the bitcoin mining industry towards AI applications.
Larger bitcoin mining operations, unable to repurpose specialized ASIC chips used in bitcoin mining, are leveraging their existing infrastructure – cooling systems, security measures, and access to affordable energy – to venture into AI domains.
Companies like Applied Digital and Iris Energy have initiated significant expansions into AI cloud computing and high-performance computing data centers, respectively, indicating a move towards AI-driven operations. This shift is seen not as a departure from bitcoin mining but as a diversification strategy, reducing dependence on bitcoin's market fluctuations and embracing the growing AI sector.
Hut 8, a firm in this transition, has invested in data centers equipped with Nvidia GPUs, capable of handling diverse workloads including AI and machine learning, alongside their bitcoin rigs. This convergence of mining and data center operations underscores the potential for a collaborative relationship between bitcoin PoW and AI, where the strengths of each can be harnessed to foster innovation and resilience in the digital economy.
Industry Insights and Predictions
Bill Aronson, founder of Artificial Intelligence Research Group, offered his insight for this article. He said:
“Everyone is focused on human opinion regarding bitcoin adoption. It is hard to comprehend because bitcoin is so different from the money we have lived with all our lives. If bitcoin requires a minimum of a hundred hours of research to get a basic grasp, how will mass adoption happen in a culture with a 10-second attention span?
Ask a thousand people if they think bitcoin will transform society, and you can expect a thousand different answers. Ask those same people if they believe AI will transform society; the only question in their minds is how.
Don’t think like a human. Imagine you are an AI agent called Sami. Your job is to scour the Internet for potential candidates at Acme Investments. You need to trade with other agents who work for other companies looking for employees in similar roles. You will sell tidbits of information to them and vice versa. So you need money. You can’t open a bank account because you can’t do KYC.
Even if you could, you need to be able to do micro-transactions, and the fees would be too high. Banks are open less than 25% of the week, and you need 24x7x365. Banks are national, tied to one currency, and you need a global neutral currency. Banks monitor your transactions and can freeze or close your account.
Banks can print money, debasing its value. Why would you agree to that when there is a better alternative? When you see the world through Sami’s eyes, there is only one form of money you can use - Bitcoin on the Lightning network. Nothing else comes close.
This is why bitcoin adoption is inevitable. It doesn’t matter what humans think. AI agents will decide, and we will adopt bitcoin in their wake. If Sami doesn’t already exist today, she will within a year.”
Cathie Wood of ARK Invest has highlighted the immense potential of the convergence between Bitcoin and AI. She notes that both are entering a phase of explosive growth, as evidenced by the success of companies like TeslaTSLA, which has thrived on the convergence of autonomous vehicles, AI, and electric energy storage.
Wood predicts that this synergy will not only spur growth but also revolutionize company operations, leading to reduced costs and increased productivity. The decentralized nature of bitcoin and the robustness of blockchain technology provide a solid foundation for AI applications, improving aspects like security, transaction speed, and data analysis.
Implications for Bitcoin Valuation
The integration of bitcoin with AI, particularly through the Lightning Network, could have significant implications for bitcoin's value. As AI continues to penetrate various sectors and bitcoin becomes increasingly integral to AI-driven economic activities, the demand for bitcoin is likely to increase.
This growing utility, combined with the network's enhanced capabilities, could drive bitcoin's valuation upward. The scalability and low-fee structure of the Lightning Network make bitcoin an attractive option for microtransactions and AI-related financial activities, potentially increasing its market relevance and value.
The integration of bitcoin with AI, facilitated by the Lightning Network, presents a transformative potential for the AI, the internet and the digital economy. It democratizes AI development, enhances efficiency in model fine-tuning, and opens new avenues for income generation through AI model serving.
This synergy, as underscored by industry experts, could significantly boost productivity and reduce operational costs and making bitcoin the native currency of the internet.
Thank you Suzie, you are helping us plebs to understand where ₿ is going & its potential transformative effects on things we couldn’t even imagine ! Keep up your great work