AI agents will use crypto to transact with one another
A lot of people hate crypto so they hate the idea of AI agents transacting with it
AI reveals a lot about human behavior. In particular, it reveals how resistant many people are to change, and what it augurs for the future. When confronted with the idea that AI might bring about a radically different future, people often become uncomfortable. In response, they cleave to their existing beliefs, even when evidence suggests alternative possibilities.
Consider the notion of an AI agent. Consider further that as AI becomes more powerful, AI agents may be able to transact directly with other AI agents. They could do this on behalf of a human, or they could simply do it on behalf of themselves or other agents. But if an AI agent transacts with another AI agent, how is the transaction paid for? What currency is used as a medium of exchange to facilitate the transaction?
If you know anything about how banking regulations work, you immediately intuit the problem: only corporeal humans1 can open bank acocunts. (When a business opens a bank account there has to be a corporeal human tied to it.) But an AI agent is clearly not a corporeal human! Sure, if the AI agent is operating on behalf of, and with the authorization of, a corporeal human, then the corporeal human can simply provide the AI agent with its banking credentials and let the AI agent execute a transaction on her behalf.
But let us consider the more interesting example of one AI agent, call it Agent 1, transacting with another AI agent, call it Agent 2, with no corporeal human behind either agent. How, then, can these agents pay for the transaction? Remember, an AI agent can’t open its own bank account because it’s not a corporeal human.
Well, it turns out that one possibility is that these agents will use crypto to pay for the transaction. And a lot of people don’t like crypto. A lot of people are axiomatically opposed to crypto, and so oppose on principle the notion of AI agents transacting with crypto. Why can’t they just open a bank account? Well, we just explained why AI agents can’t open bank accounts. Anyway, Alex Tabarrok at Marginal Revolution noted recently that AI agents have, in fact, used crypto to pay for transactions with each other. Here’s Coinbase CEO Bryan Armstrong’s tweet thread about this. Quoting from his tweet thread:
AI agents cannot get bank accounts, but they can get crypto wallets. They can now use USDC on Base to transact with humans, merchants, or other AIs. Those transactions are instant, global, and free.
This is an important step to AIs getting useful work done. Today if you give an AI agent a task and come back in a few days or hours, it can't get useful work done. In part this is a limitation of the technology itself, and products like devin.ai are getting closer to this. But the other reason is AIs can't transact to acquire the resources they need. They don't have a credit card to use AWS, Github, or Vercel. They don't have a payment method to book you the plane ticket or hotel for your upcoming trip. They can't get through paywalls (for instance to read a scientific article), promote their post on X with a paid ad, or use the growing network of paid APIs to integrate data they need.
The comments at the Marginal Revolution post are almost all negative, perhaps predictably so. Here’s a representative one. People don’t like contemplating the prospect of radical change, and AI agents autonomously transacting with one another using crypto as the medium of exchange is a fairly radical departure from our current model for the world.
One can reasonably argue in response to Bryan Armstrong’s tweet thread that he’s talking his book. It benefits Coinbase if AI agents use its crypto products to pay for transactions. And yet, while that is an obvious point, it is also irrelevant: someone had to have built this capability, and it might have well been Coinbase. Companies tend to build products which benefit them.
So, if you accept that AI technology will improve over the near term, and that AI agents will become more powerful and capable, and you further accept that this observation implies that AI agents will start to perform economically substantial transactions with each other, then one possible implication is that crypto will become the AI payment rail of choice. And that implies a much different world in the near future than many are comfortable with.
I am using the awkward phrase “corporeal human” for a reason here: a bank account must be associated with a physical person. Sure, Walmart has a bank account (it has many thousands of bank accounts). But those bank accounts are all tied to a discrete and identifiable person who operates the bank account on behalf of Walmart-the-corporation.