Nation state and institutional adoption is cool, bit this is cooler.
Earlier today, Paul Itoi, founder of Stak and Sphinx, sent out a tweet highlighting a few of the things he's interested in as it pertains to the intersection of Bitcoin and AI agents. We've talked about this intersection before in this rag. However, I feel compelled to write about it again today because I don't think people understand the profound nature of what will be unlocked once this intersection reaches a critical tipping point.
The nature of most AI products today is you find an LLM that is really good at a specific task that you're looking to accomplish. You set up an account, you pay a subscription fee, and you begin pinging that model with prompts in the hopes of getting a response that will surface the answer you're looking for. More and more often, these days, the answers that are surfaced are very, very good. And Even though the advancements that have been made in the AI space over the last three months have been absolutely incredible, it still feels as if we're just seeing the tip of the iceberg in terms of what is about to be unleashed on the world.
As it stands today, the tip of the iceberg is robust reasoning models and the emergence of a agentic frameworks. Despite the fact that these models and frameworks are in their very nascent stages they are making people's minds run wild. Myself included. You may be able to tell if you follow me on X or Nostr, but I've been leaning more and more into the AI tools as everyday passes. They're becoming an integral part of my workflow and my personal life.
The amount of productivity I've personally unlocked by using the numerous tools that have been brought to market over the last few months is quite frankly insane. If you would have told me two years ago that I would have the ability to use AI tools to accomplish some of the things I've accomplished in the last three months alone, I would have told you you were crazy. We've automated a bunch of the workflow that is pertinent to our business here at TFTC. I'm not even writing this newsletter right now. I'm dictating it to a voice recognition AI model that is transcribing what I'm saying and putting it into my publisher.
We have workflows that take the video and audio content that we produce for the podcast, automatically ingests it into models that are transcribing the audio content into written content, dissecting that written content, highlighting sections of the conversations I have on the show, running analysis on those sections to highlight what is most pertinent to our audience, surfacing that, creating video clips, and distributing them on social media. That is just one example of a workflow we have implemented. It's truly insane.
And again, it's just the beginning. I can only imagine how much more productive we're going to be as a company here at TFTC and at Ten31 once these agentic frameworks become more mature and more widely adopted and implemented into the workflow. This is where I begin to think the introduction of bitcoin into all these workflows is inevitable.
Many people are narrowly focused on the institutional and nation-state adoption of bitcoin at the moment. It makes sense. These are very important and profound developments that will likely prove to have a very positive effect on the market cap of bitcoin and the purchasing power of each individual unit. I'm becoming more convinced that as the focus of the industry has shifted towards these narratives many bitcoiners are completely overlooking what is likely to be an adoption trend that is just as, if not more impactful, than institutions and nation-states getting into bitcoin.
Once you get comfortable using these tools and you begin to understand how they interact with each other, it becomes pretty clear that the payments layer of AI as it stands today is a duct tape solution that likely will not suffice if these tools are to scale to the level I believe they will. The AI economy is going to need bitcoin if it is going to scale. These agents are going to need bitcoin if they are communicating with each other, completing tasks on behalf of each other, and ultimately on behalf of an individual human or team of humans providing them with the prompts. They're going to need to pay and be paid for those tasks. And the fiat payments infrastructure as it exists today simply cannot facilitate the amount of economic activity that will exist within the AI economy.
As the cost curve for compute continues to decline at a rapid clip, it becomes clear that prompting models for responses and agents going out to complete tasks are going to want to do that in the most economically efficient way possible, which necessitates the facilitation of micropayments. Not only microtransactions, but microtransactions that don't come with credit risk. I truly believe this problem can only be solved with a digital bearer asset. Disregard the privacy concerns of loading up your debit or credit card information and handing it over to an agent to go complete economic tasks. Even though that is an extremely poor design, the bigger problem may turn out to be the amount of credit risk that model would be inject into an AI economy at scale. You need a better solution. You need a digital bearer instrument. Nothing is better suited to facilitate microtransactions without credit risk at scale than the Lightning Network.
This gets to the heart of the point of why I'm writing this newsletter today. I think we can pull forward bitcoin adoption by extending an olive branch to those building out the AI economy and helping them realize that bitcoin is THE solution to this massive problem that will arise if AI continues to scale. Institutions and nation states adopting bitcoin is pretty cool. But if you ask me, injecting bitcoin into the core of an emergent digital economy that will be many, many, many orders of magnitude bigger than the internet as it stands today is way cooler.
I highly recommend you go read the tweet that Paul sent out yesterday. He's much more eloquent than I am and is way closer to the cutting edge of this intersection than I ever will be. The points he makes about building these products in ways that ensure that we have a future that is built on open protocols are very important and things that you should be focused on as AI continues to become a more prominent part of our everyday lives. I probably need to catch up with him on the podcast soon.
In my recent conversation with Jim Carucci, we explored the critical difference between monolithic AI systems controlled by tech giants and the emerging open-source alternatives. As Jim pointed out, monolithic systems like those from OpenAI and Google hold their models behind APIs, creating an asymmetric advantage where users become dependent on these providers for information that may be censored or biased. Without access to the weights and context used to train these models, we have no transparency into their inherent biases or limitations.
"It's kind of like with Bitcoin. You don't want anyone to control the stock or the storage of wealth. And on the flip side, if AI is centric to the economy in the future, that's controlling the flow of wealth." - Jim Carucci
I believe the parallel to Bitcoin is profound. Just as we don't want central authorities controlling our monetary system, we shouldn't want centralized actors controlling what could become the most important technology of our lifetime. Jim highlighted how open-source alternatives like Deep Seek are already providing significantly lower token costs while allowing users to run models on their own hardware. This decentralized approach ensures that technology serves humanity, not corporate interests.
Check out the full podcast here for more on AI agents and Bitcoin payments, privacy concerns in large language models, and the future of machine-to-machine economics. All with Jim Carucci of Cascador.
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Ten31, the largest bitcoin-focused investor, has deployed $150M across 30+ companies through three funds. I am a Managing Partner at Ten31 and am very proud of the work we are doing. Learn more at ten31.vc/invest.
Final thought...
I've never been more bullish on humanity in my life.
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