I forecast that 2025 will see an explosion in both AI and cryptocurrency. With the latter, I am not referring to market prices. Instead, this is really focused upon utility.
When mentioning crypto, we cannot ignore blockchain as they go together. Since all crypto transactions are written to blockchain, it is part of the conversation by default. Also, data is crucial to AI, something that also brings blockchain into the equation.
The progress is AI is astounding from a technology standpoint. However, with regards to usage, it is still lagging. We have few applications which people can ultilize the features being created. This will change throughout the next year.
What we are preparing for is the first wave of the agentic Internet. AI agents will become the norm in 2025. For the moment, we are dealing with a sprinkling of these throughout different platforms.
When it comes to AI agents, cryptocurrency will be the standard.
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2025: Crypto and AI Convergence
Convergence is the most powerful technology in the world. When two technologies, advancing in their individual ways, converge, the results are powerful. We have seen this a number of times throughout the last half century. The best example I can think of is the smartphone, which merged compute, mobile, and the Internet.
AI gets a ton of attention. The pace things are advancing, against from the technical angle, is mindnumbing. In spite of many detractors, I forecast this to continue in 2025.
Cryptocurrency is also making progress, albeit at a much slower rate. We are seeing infrastructure that is going in place starting to provide the necessary foundation. Governments also appear to be getting out of the way by being friendlier to the entire industry.
Startups were hamstrung, especially in the United States. That should end in the upcoming year with a new administration taking office.
The key here is that crypto is now going to follow AI. If AI agents are indeed the next evolution, this cannot operate without crypto. Therefore, there will be some correlation between the advancement of AI and crypto.
Naturally, this will not be a 1:1 situation. However, we can expect the acceleration of AI adoption to impact cryptocurrency.
Medium of exchange
The first area that I foresee this taking place is as a medium of exchange. When it comes to making payments, crypto is going to be what is used.
We see a lot of maneuvering by Wall Street and the traditional financial operatives. This is a sound decision but one I sense will be futile.
AI agents are going to operate without the use of financial intermediaries. When we are dealing with computers, there is no need for something to stand in between. Computers can operate directly without issue. It is humans that require intermediaries.
It is important to view AI agents as service providers. They are going to offer some skill. In many instances, this will be free; others will have a charge.
Many of these will require micropayments. The amount required to access the service will be minimal, hence making cryptocurrnecy the only solution. There is no way to make a payment of a penny or two via the established financial system. Intermediaries simply make it too expensive.
With some crypto networks (such as Hive), this is not an issue. Sending a payment of under a penny is possible.
As I like to state, AI agents are not going to swipe the Visa card.
Value Capture
Most cryptocurrency is value capture. These coins or tokens are not ideal as a medium of exchange. The market is starting to realize that with the increase in stablecoin usage.
In this regard, we are talking more about digital assets as opposed to currecny.
The value of a network, platform, or application is captured by the token. This is something that is going to apply to AI agents.
To be clear, AI agents will come in all forms. Some will be on centralized platforms, owned and controled by Big Tech. Others will be on blockchain yet owned by an individual or company. And still others will be tokenized, where ownership is spread among a variety of different wallet owners.
The last one is where cryptocurrency excels.
Whatever the percentage of AI agents that are tokenized, it provides a new ownership structure outside what we presently deal with. Some will be full blown DAOs, requiring only some coding updates. It is the time when some long discussed concepts start to emerge in practice.
Speaking of DAOs, there were many attempts at setting these up. Most failed because they were not autonomous. It could seem logical that most would grasp this since it is in the name: decentrlaized autonomous organization. To be a DAO, autonomous operations are required.
AI is really just an exercise is automating certain activities. The difference is that, with generative AI, the output is actually cognation. This expands the cogniative ability of society to, potentially, an unlimited level.
In Conclusion
As these two technologies converge, we are going to see the foundation for a new economy emerging. Most are not aware of how things will change. There is a great deal of discussion by "experts' about what the impact will be.
To me, this is very clear.
Tokenization is going to be the key factor. Cryptocurrency will be core to the new economy. We are seeing how labor income is being replaced. This means that everything is being driven by capital. It is something that stimulated a great deal of discussion over the past decade.
How do we replace income capital? This is the question that everyone has. Many proposals are offered, with all having their downsides.
The simple answer is tokenization. Income capital is replace with staking capital. As people own stake in different AI agents, their financial position increases. Under this scenario we have the dual mechanism of yield and asset appreciation.
An income can be derives from the base operation of the agents. At the same time, the value of the agent has the potential to increase along with utility. This puts everyone in the aseet ownership game.
To beome a reality, this requires cryptocurrency. The existing system is exclusionary, with only a sliver of the global population in position to participate in this manner.
Tokenization alters this completely. 2025 will see the onset as AI agents and cryptocurrency converge.