The future of AI and crypto is a foregone conclusion in my mind. By this, I am not referring to AI coins or simple market mechanisms although that will certainly come into play.

Instead, we are looking at a central premise of reworking the economy. Obviously, there are many layers to this, outside the scope of a single article. Yet when look at the basis, payments and commercial interaction, we can see how these two technologies will blend.

This is even before we consider the potential of the automated economy.

Some of the bigger names in crypto are on board with this idea. This is what we will take a look at.

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AI And Crypto: Wallet Integration Into LLMs

Massive technological gains can be made simply by riding the coattails of another. This is the case with LLMs.

When it comes to generative AI, the world has not scratched the surface. We are in the early stages with some foundational pieces being constructed. Throughout this process, advancement is taking place as evidenced by xAI's release of Grok4.

Large Language Models (LLM) are a central component to our AI future. This is, naturally, not the only piece but it is a major one. The next advancement appears to be the expansion to real world AI.

The potential impact upon the economy is enormous. Many, including myself, predict an age of abundance, a time where most basic needs are produced in massive quantities at a low cost. This is mostly due to automation.

Many fret about a potential future where humans are not a central component of economic productivity. Of course, this will cause massive shifts in society, something that presents a great unknown.

When thinking about this is the fact that an economy absent (to a large degree) of humans means existing structures become obsolete. This includes something as basic as payment. Consider the fact that banks were established by humans, for humans. Our payment system is filled with transactions predominantly initiated by us.

An automated economy means this is no longer the case. Of course, AI systems are not able to have bank accounts. How does this get reconciled?

Digital Wallets: The 21st Century Bank

The majority of people utilize a bank for basic purposes. When we look at the common utility, for most, a bank allows them to send, receive, and store money. Those are the most basic features that are provided.

Banks look at generate greater revenues by offering more services, something a percentage take advantage of. The point here is to target the masses.

It is a point that is also driven home when looking at businesses. Most small businesses utilize banks for the same purpose. Again, there could be things such as lines of credit but all businesses engage in basic banking.

The problem for banks is that a digital wallet can provide the same service. A wallet such as Metamask or CTRL enables users to send, receive, and store money. Here is where we see potential disruption.

If we couple this with AI, it provides the opportunity for automated businesses to engage in commercial endeavors.

This is a point Brian Armstrong, CEO of Coinbase, foresees. He made reference to it in an interview.

“I expect enhanced crypto functionality will be a catalyst for AI to achieve another 10x unlock,” Coinbase chief executive Brian Armstrong posted to X. “Personally I’m most excited to see crypto wallets fully integrated into large language model (LLMs) one day. That will be a huge step towards a permissionless, digital economy.”

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What is interesting here is that Armstrong sees the potential for crypto to expand the potential of AI, by a 10x. Whether this is precise or not is not relevant. Even if we are looking at a 3x-5x, that is a huge jump.

In other words, we are talking about something much bigger than market trading.

The future potential of AI is hindered without digital wallets, according to Armstrong. When we consider the integration of AI agents, many of these will require commercial activity. That means sending and receiving value. Here is where a new payment system emerges.

Once again, AI agents are not going to have bank accounts. When we look at the numbers, it can be mind blowing.

A large bank like Chase will have tens of millions of customers. We will see a time when AI agents are in the billions. Naturally, not all will be engaging in transactions but the majority will. Consider how each robot might ultimately have a digital wallet.

The digital economy is spreading. With automation, it is going to require new structures. The digital wallet is one of them.

Posted Using INLEO