Placeholder Putting AI into the cage of blockchain

Revolutionizing the Future Harnessing the Power of AI with Blockchain Technology

AI proxy numbers will grow exponentially, but native digital legal and financial systems, as well as new business models, are needed to fully harness the potential of AI. Blockchain can ensure the secure deployment of AI, smart contract wallets and “wallet-as-a-service” can enable proxies to transact, and the combination of AI and blockchain can coordinate business activities among proxies, achieving an Internet financial system.

Original title: Artificial Intelligence Belongs Onchain

Original author: Joel Monegro

Original source: placeholder

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Translated by: MarsBit, MK

As the production cost of AI models decreases, the number of AI proxies will grow exponentially. Soon, the number of proxies online will surpass that of humans, and the amount of information they create, consume, and exchange will exceed our processing capacity. However, if digital activities grow a millionfold and 99% of the growth comes from machines, we will struggle to cope with this transformation without adopting on-chain infrastructure and business models. This model can allow proxies to fully unleash their potential and enable us to identify, control, and audit their behavior.

Currently, companies like OpenAI bear the huge cost of model production and then sell access through their proprietary interfaces and APIs, mainly targeting content consumption and creation. But to fully tap into the potential of AI, we need a large number of specialized proxies that can communicate and transact with each other. They should be able to freely traverse the Internet and have the ability to own and spend funds to act on our behalf or on their own. We also need methods to identify, control, and audit their behavior.

The problem is, we cannot enforce our laws on proxies to prevent effective regulation. They cannot use traditional financial systems that rely on jurisdictional identity models, which restricts their trading capabilities. They consume a large amount of online information – transferring all traffic costs to service providers – but generate no corresponding revenue through subscriptions or ad clicks. To address these issues, we need a native digital legal and financial system, along with new business models, to fully leverage the opportunities brought by this new technology.

The solutions include (1) sovereign digital infrastructure with a new software paradigm that guarantees trustworthy code execution with an immutable audit trail; (2) an independent digital financial system that treats humans and machines equally; and (3) an encrypted identity model combined with decentralized communication and reputation protocols. This can only be possible through blockchain protocols and smart contract applications.

Blockchain protocols provide a variety of decentralized digital services that can be accessed through smart contracts and paid for with digital assets. For example, smart contract networks like Ethereum and Solana ensure the secure and reliable execution of open-source software and are supported by the auditable traceability of blockchain transactions; while networks like Filecoin and Arweave provide low-cost and scalable on-chain data storage services. As building new protocols on existing platforms becomes easier and more cost-effective, the range of services provided by decentralized networks continues to expand.

We can use these platforms to train, deploy, and operate agents in a distributed manner, but more importantly, the use of smart contracts enables interaction between agents. For AI agents, using smart contracts and paying for their services with tokens is simpler than accessing typical Web2 REST APIs and requiring accounts or credit cards.

Wallet-enabled agents can leverage any smart contract service or platform, from infrastructure services to DeFi protocols to social networks, opening up a whole new field of new capabilities and business models. Agents can pay for their own resources, whether it be computation or data, on demand, which is an innovative idea. They can trade tokens on decentralized exchanges to access different services, or use DeFi protocols to opportunistically borrow or generate revenue from their assets to optimize their financial operations. They can vote in DAOs, even charge tokens for their functionalities, and exchange information with other specialized agents in exchange for funding. The result is a vast and complex economy where specialized AI agents communicate with each other through decentralized messaging protocols, transact information on-chain, and pay the necessary fees. This is not achievable in traditional financial systems.

Consider the potential impact of this concept: if agents are active on-chain—even if their thought processes are completed off-chain—we will eventually have a public, immutable record with encrypted signatures to document their activities over time. Blockchain will ensure secure deployment of AI, enabling us to implement measures such as auditing agents’ network behavior, differentiating between machine-generated and human-generated content, and building identity and reputation systems for machines based on their on-chain activities. This will help us and machines identify and reward good actors (through tokens or reputation), punish bad actors (e.g., by lowering reputation), and understand which agents perform better than others on specific tasks. Subsequently, agents will be able to decide whom to trust based on their on-chain historical data, which benefits from the openness of blockchain data and easy accessibility.

Multiple factors are coming together to realize this vision. Thanks to new consensus mechanisms and scaling solutions, blockchain infrastructure is rapidly becoming efficient and cost-effective. Smart contract wallets and Wallet-as-a-Service (WaaS) providers will enable agents to transact; meanwhile, emerging account abstraction technologies can allow interactions between humans and agents, authorizing agents to pay from our wallets. We can use agents’ public keys as identifiers to build registries and reputation systems (including mechanisms such as blacklists or reputation reduction). We can even interact with agents owned by DAOs and experiment with new business models; perhaps certain agents will operate on second-layer networks owned and managed by decentralized communities.

These ideas may initially seem far-fetched, but in retrospect, they are highly intuitive. Undoubtedly, smart contracts will coordinate business activities between agents, just as legal contracts govern human activities. Undoubtedly, agents will leverage internet financial systems supported by digital assets instead of traditional banking and credit card systems. Undoubtedly, agents will use encrypted identities to identify, communicate, and transact through decentralized protocols. I see no alternative solutions: artificial intelligence and blockchain complement each other.

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