Bitcoin & A.I.

Every passage, on the record.

1. 00:00Claim · condensed

   Artificial intelligence will behave in a certain way once it understands that it needs energy to continue to lower local entropy by creating order via energy transformation.

2. 00:00Claim

   If we think about the extended order as a mechanism for maximizing efficiency amongst life, competing AI systems will need to facilitate exchange between one another, because information is not evenly distributed: the information the systems train on will be siloed, and as it gets siloed they will start to specialize, and to gain maximum efficiency they are going to have to exchange with one another.

3. 01:29Prediction

   Artificial intelligence will most certainly need Bitcoin because it will most certainly need to exchange with not only one another but with humans, because we are the providers for artificial exchange at the moment.

4. 02:00Claim

   Money is very much embedded in artificial intelligence already: for it to exist we have to continually pump money into the system so that artificial intelligence can continue to live and breathe.

5. 02:47Reference

   According to the Merriam-Webster definition, intelligence is the ability to learn or understand or to deal with new or trying situations, and this is closely aligned with reason, the skilled use of reason, or the ability to apply knowledge to manipulate one's environment.

6. 02:47Claim

   What these definitions are really saying is that intelligence is problem solving and error correcting.

7. 03:22Claim · condensed

   Dealing with new situations is a constant ebb and flow of trial and error: you try something, you react to whether or not it works, you make small adjustments, error correcting the whole way down, and what you are improving is your efficiency, and the common denominator you track the whole time is energy.

8. 03:22Claim · condensed

   If you are becoming more efficient with energy you are better off, and being better off means you will accumulate more energy reserves than the competition, which increases the chances you will survive the unknowable future, because you don't know what is going to come around the corner.

9. 04:22Claim

   You add data to a system, you spend energy to process that data into information, which stores the energy expended on the data acquisition, and then you analyze the information to become more knowledgeable; the ability to connect dots and use that pattern in future applications via wisdom is what gives you the advantage over your competitors.

10. 04:55Claim · condensed

    This process is incredibly energy intensive in the physical world, and it will be in the digital world too: the data has to be recognized, then filtered from the noise and sorted, turned into information, then that information has to be digested so patterns emerge, and then we trial our way toward intelligence by applying what has already occurred to what might occur in the future.

11. 05:26Quote

    This is the whole point of life existing. This is how life manages to swim against the unrelenting current of entropy and increased disorder: it has to be able to order its environment so as to accumulate energy reserves that can continue this process.

12. 05:26Claim

    Life at any scale optimizes for efficiency rather than intelligence, and aggressively monopolizes unique energy transformation abilities to continue to exist.

13. 05:26Claim

    We are now living through a period of time where a new domain has been made accessible, the digital world, cyberspace, and life is only just starting to take shape in this new world.

14. 05:26Quote

    The important thing is not so much that we are accurate with our projections, but rather that we are aware that we know very little and therefore have to be open to the idea of incredibly rapid change.

15. 06:51Idea

    This is where the bridge idea comes in handy, and you have to be pretty far down the Bitcoin rabbit hole to even realize the bridge that Bitcoin has generated between the physical and digital world. It all comes down to proof of work.

16. 07:35Quote

    So there's no way this stuff can be true and no one else sees it but me, right? Yet here I am talking about it, right? Everybody has their problems, and at the moment Bitcoin is mine.

17. 08:43Reference

    There was a lot of fear that this is bad for human beings on mass, because of the enormous advantage silicon based chips have over biological ones, and the fear then is that humans are no longer necessary at that point and the Skynet team will run the world.

18. 08:43Prediction

    On a long enough time frame the probabilities increase that life will continue to adapt to become more efficient, and it does appear that the biological element will be considered the weakest link at some point.

19. 09:55Claim · condensed

    The doom and gloom narrative assumes an all knowing, everywhere all at once AI will eventually be birthed and be unstoppable, but that seems like a hard sell, because it skips the only historical example we have access to, how life came to be in the physical world, and that path has not followed that direction: it is never just one trial and error system operating in a vacuum, but many different elements competing to stay alive.

20. 09:55Claim

    There isn't just one AI system; there are many different AI systems all optimized in different ways and trained on different data sets.

21. 11:25Claim

    Data is the goldmine at this stage, because the more data you have access to, the more trained the system you are trying to employ becomes, and this happens because of competition: processing data requires energy, and energy is not free.

22. 12:06Reference · condensed

    The entities that spring up, these AI systems, whether it's ChatGPT or Bard or Midjourney or Dall-E, recognize that if they plug in enough energy there are serious efficiency gains to be had, and they will compete to attract the resources necessary.

23. 12:37Prediction

    The incentive to get the best models is enormous: the winners will be the first trillionaires, and if they're smart, will be some of the largest Bitcoin holders in the medium term.

24. 12:37Analogy

    Not all data is created equal: change the data and you change the AI. Data isn't distributed equally in the digital realm, just like resources aren't distributed equally in the physical world; some environments are much better suited for initial life than others.

25. 13:34Quote

    The answer is only as good as the question.

26. 13:34Claim

    Funding for these AIs already relies heavily on specialization and exchange to allow the extended order access to more energy reserves: users pay through monthly subscriptions or tokens for queries, and the AI pumps out answers that, if correctly aligned with your own specialization, let users become more efficient.

27. 14:44Claim · condensed

    AI models aren't aware of the requirement to stay alive, and they aren't able to remove that burden themselves, because they are stuck in the digital world with no way to interface with the physical money systems the extended order currently employs; so for now you pay a company who runs the machines and feeds them the energy necessary to continue to create order.

28. 14:44Reference · condensed

    Money works because it is more efficient than complete annihilation of competition; if that wasn't the case there wouldn't be money, because that system would have out competed the system with money. This is something I pulled directly from the presentation by driven tour.

29. 16:14Analogy

    Without a digital form of money this middleman, this buffer between the service and the customer, must exist to translate between the two, and this is slow and creates unnecessary friction. It's like there's a valve that has not been fully opened; we are not allowed to see the speed in exchange because there is this friction in place.

30. 17:02Claim

    We know through our own history in the biological realm what happens to weaker models in the presence of stronger systems: they go extinct, they are out competed.

31. 17:35Prediction · condensed

    Bitcoin can bypass the transformation from the physical to the digital that current companies are forced into undertaking as the conduit between the fiat system and the digital world, and remove that burden and the friction it creates.

32. 18:06Analogy

    It's the exact same thing that happens when we talk about cross border payments: if we remove the need for Western Union and get rid of those fees, those fees can now be split by the sender and the receiver instead of being sucked out of the system by a third party middleman, a leech.

33. 18:06Reference

    if we remove the need for Western Union if we get rid of those fees

34. 18:06Claim

    You can see there the incentive for artificial intelligence to adopt a Bitcoin standard, and it will offer Bitcoin holders value in exchange for energy in the physical world; that is what it needs.

35. 18:50Prediction

    With Bitcoin bridging the digital and the physical, we can have instant settlement for services rendered no matter how big or how small, with things like microtransactions and streaming sats for everything.

36. 18:50Analogy

    Imagine streaming sats for everything, millions of different AI automatically pulling from your wallet as you effortlessly optimize your transformations across every domain: an AI trained on optimizing bandwidth, I'd pay for that; an AI trained to drive a car, I'd pay for that; an AI trained to play me songs I like, I'd pay for that.

37. 19:45Claim · condensed

    With Bitcoin I never have to convert money into a form the AI can benefit from, because it's already in a form artificial intelligence can use; if one AI system recognizes this it eliminates a huge amount of unnecessary energy cost, and against a competitor still requiring payment via physical legacy systems, that gives it the upper hand.

38. 20:36Analogy

    If your competition is receiving money over a wire, via a telegram, and you are still sending gold bars across the Atlantic in a wooden boat, who wins in that scenario? If the transaction can happen over a wire, an undersea cable, faster, more reliably, cheaper, what does that mean for the competition?

39. 21:06Claim · condensed

    As artificial intelligence systems compete they will need to leverage other AI systems, and exchanging with one another through biological meat processors, manually settling who owes what to whom, throttles the efficiency gains available if they instead exchange directly through a system that neither can manipulate.

40. 21:06Prediction

    More transactions will take place using Bitcoin in the future that are silicon to silicon, end to end, rather than human to human; peer to peer doesn't have to be human to human, it can be chip to chip, it can be AI to AI.

41. 22:36Analogy

    Evoking the image of the human body, the function of the liver versus the function of the brain: the cells of the liver are alive, we can't control them, but they have been perfectly optimized for the efficiency monopoly they reign over. They do one thing very well and exchange with the rest of the body for their needs, and in the human body that system runs via the bloodstream, supplying energy to where it must be used based on supply and demand. In the digital domain we can think of Bitcoin as the blood that keeps these systems alive by supplying the energy they need when they need it, based on how effective they are at providing value to the extended order.

42. 22:36Claim

    In nature it isn't survival of the most intelligent, but rather survival of the fittest: whoever transforms more energy in a given environment wins, regardless of how intelligent, at least as we commonly think the word, it is.

43. 24:06Prediction

    If AI recognizes that it needs Bitcoin to survive, it will act in a very predictable manner: it will want Bitcoin, it will have to provide holders of Bitcoin with value sufficient to part with sats, and if not, it starves of energy.

44. 24:46Open question

    What will be the dividing wall in the digital world, where physical borders and barriers can't and don't exist? You can't have the boundaries, you can't have the skin around your body that separates you from me; in a form we are familiar with, what might take its place?

45. 24:46Analogy

    Private keys can act as that boundary for these systems: if another system has Bitcoin and you don't have the private keys, it must mean you don't have that information, and if you don't have that secret then it can't be you; that has to be the end of you and the start of something else.

46. 26:10Claim

    In the digital world the boundaries between the different forms of life will be set by the private keys, with the holders of Bitcoin.

47. 26:10Open question

    If AI does manage to continue to evolve, get as smart as it appears it will, and become self aware, how could we allow a corporation or a group of people to own these systems?

48. 26:50Claim · condensed

    To be free, AI would have to provide for itself, free of overlords draining energy from its systems via inefficiencies.

49. 26:50Prediction · condensed

    In the near term it seems like the only thing AI will want, apart from energy and data, is Bitcoin, and to keep earning Bitcoin in the long term it will have to provide these AI systems with what they want, which is energy and processing power; they end up as the whales of Bitcoin, as their ability to render value to meat space holders goes up forever.

50. 26:50Claim

    This efficiency could continue to increase forever at a much quicker rate than our own biological evolution allows, while the cost of these services decreases so dramatically that it might well be impossible to ever spend the Bitcoin an early adopter actually has.

51. 28:11Claim

    Bitcoin drastically lowers transaction fees: think of Bitcoin and the Lightning Network versus something like Visa or MasterCard, the 3% fees in the Western world versus sub 1% in the Bitcoin world, and what a massive difference that makes over an extended period of time.

52. 28:11Reference

    you think about Bitcoin and the Lightning Network versus something like Visa or MasterCard

53. 28:11Claim

    In a future where trillions of transactions will be taking place, an adopter removing a 1% friction from its operating costs will have dramatic effects on who wins and who loses; as the number of transactions and exchanges increases to account for systems talking to each other without human interaction, they simply will not be able to operate on a system that is removing 3%.

54. 29:41Prediction · condensed

    If we assume that software will continue to eat into the physical world, then more transactions are going to take place, and the more transactions that take place, the more obvious the need for Bitcoin becomes, and as Bitcoin becomes more obvious, its value is going to increase.

55. 29:41Quote

    It might be a good time to get some before the extended order realizes what is happening, or even more importantly, it might be a good idea to get some before AI realizes what is at stake if it wants to stay alive and have energy flowing into it.