What Crypto is associated to AI?

October 12, 2023

There is no need to look further if you are curious about which cryptocurrency or blockchain will most impact AI. We will dive into this nuanced topic today.

As of 2023, a few tokens are trying to power different AI blockchain platforms. One Forbes article covered a few tokens, all under a 1 billion dollar market cap, and since then have fallen in price further.

This leaves me with many questions! In a time when AI is booming, why are these tokens not being leveraged when “the blockchain” is so empowering?

Do AIs need a token? Or does AI need a way to communicate with itself based on value transfer? Does AI simply need a way to have autonomy with capital to purchase resources when needed?

Let’s dig deeper.

Payments Risks with AI

The problem that must be solved with AI and LLMs (Large Language Models) is the payment mechanism of how resources are used and their timeliness of being paid for mostly in the digital realm but also the physical.

AI systems rely on out-of-date payment systems like credit cards, creating massive counterparty risk for platforms like Midjourney and OpenAI

Like 99.9% of crypto tokens over the last 14 years, crypto AI tokens will likely fail to find market footing. AI will want and rely on a digital bearer asset that is decentralized, accessible, and globally used.

There is a readily available and active set of developer tools that empower developer communities to build LLM tooling that incorporates Lightning and Bitcoin. Before we dive into the tools, we must clearly define the problems that must be solved.

Problems that need to be solved:

How does Bitcoin assist in AI API payments?

Lightning Labs has released a usable protocol that empowers AI agents to pay for resource usage. It is in production today and is called L402. It is essentially a means to authenticate and charge for API requests using Lightning Network. This enables charging for API usage in real-time and machine-to-machine automated value transfer.

This enables a means to coordinate among a network of AI agents each with specialized roles. Just like physical money does in the real world, Bitcoin being a digitally native way to transmit value, makes it a perfect fit for AI value transfer as well.

83% of the modern web are API calls, and AI uses APIs in the same way to automate and connect different enterprise applications, systems or servers.

Giving AI APIs access to real-time payments to access services on demand creates opportunity the web has never had before. In Part 2 of our Lightning Networks impact on AI, we covered the 402 Forgotten HTTP status code. Payments that are required within the web can now be completed thanks to Lightning Network and cryptographic blockchain innovation.

Blockchain Tools for AI

LangChainBitcoin is a suite of tools that enables Langchain agents to interact directly with Bitcoin and the Lightning Network.

What does this mean in simple terms?

Think of the L402 standard as a kind of technology that helps in two main ways: it lets users prove who they say they are (authentication), and it allows for paying for services, bit by bit, as they are used (service charges), all across different connected computer systems (decentralized networks). This is opposed to larger payments that happen traditionally before or after usage, which naturally strain the buyer and seller depending on how payments are arranged.

In particular, L402 combines two excellent pieces of tech: “macaroons” and the “Lightning Network.” Macaroons are unique authentication files that prove you can access something without checking with a central authority each time.

The Lightning Network system allows for quick, universal payments without requiring permission from anyone else. These value transfers can be any size and are settled instantly anywhere in the world. (Pay for what you use in the moment)

Back when the internet was first created, there was an idea (the “402 error”) for a system that could handle small payments (micropayments), but it was impossible to implement at the time.

With the L402 technology and Bitcoin, we can finally realize this idea, creating a web where machines can pay each other, powered by the Lightning Network! And this isn’t just a theory. This is available right now to be used by anyone anywhere.