Do we still need blockchain today? Reflections from the perspectives of currency and AI

Author: 100y

Compiler: Deep Tide TechFlow

Will the unknown parts in the image reconnect and follow the same trajectory as before?

Humans are remarkable beings. While the pace of biological evolution is very slow, the speed at which humans change the world through science and technology is astonishing. Imagine our lives today compared to a thousand years ago. Although our appearances are similar and our cognitive abilities have not changed much, the gap in living standards is enormous.

However, no matter how rapidly the world changes, humans are ultimately limited by bodies and genes composed of organic and inorganic materials. The instinct-driven struggles for wealth and power, class conflicts, wars to rebuild international order, and the cycles of wealth and debt have always existed in history and may continue to do so. Human responses and behaviors towards these issues are unlikely to undergo significant changes over time.

This perspective suggests that by studying human behavior and responses to significant events in history, we can predict future patterns. While we cannot predict the future with absolute certainty, unless there are significant changes in human biology or a fundamental shift in our collective mindset—such as the entire world converting to Buddhism and achieving enlightenment—we can use the past to make informed guesses about future trends.

Many published books analyze the unchanging aspects of human society and our consistent responses to historical events. For example, Morgan Housel's The Psychology of Money provides insightful explanations of the persistence of human thought processes from a micro perspective. On the other hand, Ray Dalio's Principles for Dealing with the Changing World Order analyzes the repetitiveness of imperial history from a macro perspective. Both books are highly recommended for readers interested in understanding these enduring patterns.

In this context, this article aims to explore some significant and inevitable trends currently facing humanity and their potential impacts on society, comparing them with similar situations in history. The article particularly focuses on the weakening status of the dollar and the rise of general AI (AGI), pointing out that both may pose significant risks due to excessive centralization. Therefore, I believe that blockchain technology essentially promotes decentralization and will play a crucial role in the future of human society. Each section of this article will delve into how the blockchain industry, led by Bitcoin, will ultimately shape our world.

1. An Inescapable Topic: Currency

1.1 The Collapse of Reserve Currency is Inevitable

Currency is a social contract established to facilitate transactions. Its legitimacy relies on the balance of power in the international order and the trust of its participants. Since human thought and emotional systems have not undergone significant changes over long periods, future currency systems are likely to follow historical precedents.

Most people today are accustomed to using the dollar as the global reserve currency without question in their daily lives. The United States' dominance in military, finance, science, and other fields has solidified the dollar's seemingly eternal status. However, humans often have too much confidence in things they have not personally experienced. A brief exploration of the nature and history of currency reveals that the lifespan of global reserve currencies is often shorter than expected.

Since the establishment of the Bretton Woods system in 1944, the dollar has been the only global reserve currency for just 80 years. Before assessing the current state of the dollar, it is worthwhile to review previous global reserve currencies. Before the dollar, the pound sterling was the world reserve currency, and before that, it was the Dutch guilder.

(The Historical Repetition of Reserve Currencies)

The rise and fall of the Dutch and British empires, as well as their tenures as global reserve currency holders, followed very similar patterns. They both began to rise after defeating declining great powers. Victory propelled the development of capitalism and the arrival of the Industrial Revolution, which enhanced national competitiveness and laid the foundation for them to become reserve currency nations.

However, history repeatedly shows that the wealth and prosperity brought by the status of global reserve currency often sow the seeds of decline. Increasing account deficits and widening income inequality weaken national competitiveness and accelerate debt accumulation. Ultimately, the enormous debts and currency devaluation caused by wars force these once-powerful nations to cede the status of reserve currency to emerging powers.

(The Washington Hotel at Bretton Woods | Source: Wikipedia)

The United States, currently the world's number one superpower, has also followed a similar trajectory. After the Civil War, the U.S. enhanced its competitiveness through the Second Industrial Revolution, the development of capitalism, and its geopolitical advantages. During and after World War I and World War II, the U.S. surpassed the declining Europe in wealth and prosperity, reaching new heights. With the victory in World War II becoming inevitable, the U.S. convened a meeting to reorganize the post-war financial order, adopting the Bretton Woods system, which established the dollar as the reserve currency under the gold standard.

However, a reserve currency economy based on hard currency faces a dilemma. To use the dollar as the primary currency for international trade, there must be a sufficient supply of dollars, which requires the reserve currency country to maintain deficits. While gold reserves remain unchanged, the increase in the dollar supply inevitably leads to currency devaluation and undermines international trust in the reserve currency. This issue is known as the Triffin Dilemma.

The Cold War with the Soviet Union, the Vietnam War, and the oil crisis exacerbated trade deficits and inflation. When the U.S. could no longer meet the demand for gold redemption, President Richard Nixon terminated the dollar's convertibility into gold in 1971. This led to a sharp increase in gold prices from a fixed $35 per ounce to $850 per ounce in 1980, marking the beginning of the fiat currency era and the onset of high inflation.

Fortunately, due to Paul Volcker's unprecedented high-interest rate policies, with rates reaching 20%, and the successful establishment of the petrodollar system, the dollar appreciated again. This recovery ushered in a period of economic prosperity for the U.S. in the 1990s.

(Source: FRED)

However, after the end of the Bretton Woods system, the way the dollar is issued fundamentally changed. Whenever funds are needed, the government begins to issue treasury bonds, and the Federal Reserve prints money to purchase these bonds, leading to a rapid increase in the money supply. Government debt skyrocketed from $391 billion in 1971 (34% of GDP) to $34 trillion by the end of 2023 (120% of GDP). During the financial crises of 2008 and 2020, the government accumulated massive amounts of debt through this mechanism, leading to continuous devaluation of the dollar.

How long can such massive government debt be sustained? This question raises various possible scenarios. One possibility is the emergence of an inflation fighter like Paul Volcker, who may take severe measures to reduce debt, even at the cost of a significant economic recession. Alternatively, disruptive innovations such as AI could promote supply and production, exerting continuous deflationary pressure on the economy, thereby extending the dollar's lifespan.

(Political Polarization | Source: Pew Research Center)

However, as mentioned earlier, currency is a social contract. Therefore, when the international community begins to lose confidence in the U.S. and its currency, the decline of the dollar will begin. The inevitable inflation of the reserve currency may exacerbate social issues such as income inequality and political polarization, both domestically and internationally, further undermining trust in the dollar. Although there are currently no clear signs that the dollar will vanish, an increasing number of issues suggest that this scenario is becoming more likely.

(China Loves Gold | Source: Investing.com)

Not only inflation, but geopolitical issues may also weaken the dollar's status. In response to Russia's invasion of Ukraine, Western countries excluded Russia from the SWIFT banking system, preventing it from settling trade in euros or dollars and freezing half of Russia's dollar foreign exchange reserves. These actions undermine other countries' trust in the dollar. For example, since the onset of the Russia-Ukraine conflict, China has been steadily selling off U.S. Treasury bonds and accumulating gold, thereby reducing its dependence on the U.S.

History proves that the power dynamics surrounding currency remain unchanged. Unless there is an unprecedented perfect monetary policy, any reserve currency will ultimately lose its status. While no one can predict the exact timing, the dollar will one day face its end. I can only hope that this moment comes as late and as smoothly as possible.

1.2 Bitcoin as Hard Currency

As the dollar gradually loses credibility, assets like gold naturally come into focus. Gold has been valued from ancient times to the present due to its scarcity and unchanging physical properties. During major conflicts, gold is recognized as the most reliable ultimate asset internationally. Therefore, central banks around the world always maintain a certain amount of gold reserves.

(Russians queue at banks during wartime | Source: AP)

Today, individuals can invest in gold through various means such as mining company stocks, gold futures, and gold ETFs. These investment methods are generally more effective in countries with developed financial markets. However, if you live in a country with underdeveloped financial markets or are directly caught up in war or revolution, investing in gold may be significantly restricted. These investment avenues do not involve direct ownership of gold and carry counterparty risks during international turmoil. Moreover, purchasing and storing physical gold is not easy.

(Source: Kaiko)

In this context, Bitcoin can serve as an excellent hard asset similar to gold. Its supply is limited, it is not controlled by any single entity, and it is particularly easy to store and transfer, even in urgent situations like wartime. For instance, during Russia's invasion of Ukraine on February 24, 2022, the trading volume and price of BTC/UAH surged, trading at a 6% premium over international exchange rates. Even in less extreme situations, demand for Bitcoin is high in countries with unstable national currencies. In Turkey, where the annual inflation rate is around 70%, Bitcoin's trading premium is similar to that of gold. These examples indicate that Bitcoin can indeed play the role of a hard asset.

(Source: BlockScholes, Yahoo)

From the above examples, it is evident that Bitcoin has tremendous potential as a hard currency in the future. But does this mean that citizens of developed countries, currently protected by stable currency systems, have no need to include Bitcoin in their portfolios? Even outside of crisis situations, allocating a portion of a portfolio to Bitcoin can provide substantial diversification benefits. As shown in the chart, while Bitcoin's correlation with other assets like gold, stocks, and the dollar fluctuates over time, it typically exhibits significant price volatility. This uniqueness makes holding cryptocurrencies like Bitcoin a favorable choice.

(Source: K33 Research)

In fact, many financial institutions in the U.S. have recently increased their holdings of BTC ETFs in their portfolios. According to data from K33 Research, in the first quarter of 2024, 937 institutions reported holding Bitcoin ETFs in their 13F filings. This includes well-known companies such as JP Morgan, UBS, and Wells Fargo, as well as the Wisconsin Investment Board, which acquired approximately $160 million worth of BTC ETFs. This trend indicates that Bitcoin is increasingly being viewed as a means of storing value.

(Surge in fast food prices)

As the inflation effects of quantitative easing during the COVID-19 era have not yet fully dissipated, the U.S. has once again increased liquidity in response to the upcoming presidential election. The U.S. Treasury is expanding fiscal spending and plans to conduct its first bond buyback in over 20 years starting May 29. Meanwhile, the Federal Reserve is also slowing the pace of quantitative tightening.

As a result, the dollar will continue to face inflationary pressures and will be issued in large quantities during significant economic downturns. Unless the U.S. can continue to innovate and maintain its leadership in military, scientific, and industrial fields, the value of the dollar will inevitably decline over time. Conversely, this will naturally increase the focus and value of Bitcoin.

However, to become a hard asset like gold, Bitcoin faces a key challenge: the security scale and profitability of the network. The fundamental element of Bitcoin's value is the security of its network. The more miners there are, the more secure the network becomes, and the more stable Bitcoin's value is.

Bitcoin miners primarily earn income through two means: block rewards and transaction fees. Block rewards are the Bitcoin earned by miners upon successfully mining a block, and their quantity is fixed, halving every four years. Transaction fees are the fees paid by users when transacting on the Bitcoin network, independent of block rewards.

(Fees need to be higher for sustainability | Source: Dune, @21co)

For miners to continue participating in the Bitcoin network, their mining income must exceed costs. Since block rewards halve every four years, mining income gradually decreases, so the gap must be compensated by increasing transaction fee income. However, unlike networks such as Ethereum and Solana, the Bitcoin network has limited applications and low scalability, leading to reduced transaction volume and, consequently, lower transaction fee income. Recently, new token standards like Ordinals and Runes have temporarily increased activity on the Bitcoin network, but it remains uncertain whether these standards can significantly increase transaction fee income in the long term.

(Source: MacroMicro)

As of now, mining income has generally exceeded mining costs. However, due to future halvings, block rewards will continue to decrease. Unless 1) the price of Bitcoin rises significantly, or 2) network activity increases to bring in more transaction fee income, miners may exit the network. This would reduce the security of the Bitcoin network, weaken its intrinsic value, and potentially trigger a vicious cycle of further miner exits and declining security.

This highlights a major difference between gold and Bitcoin. The intrinsic value of gold is unrelated to profitability, while the intrinsic value of Bitcoin directly depends on it. Therefore, ensuring profitability is a long-term challenge that the Bitcoin network must address. While the Bitcoin community currently lacks a clear solution, innovations such as Ordinals, Runes, and OP_CAT suggest that transaction fee income may increase in the long run.

2. Unlike the Past: AI

2.1 The Impact of AGI on Humanity

*(Is this really the future of humanity? | Source: *The Matrix)

Historically, unlike currency, technological innovations such as AI have always brought about significant changes in society. The steam engine, electricity, and the internet revolution transformed the global industrial landscape and profoundly affected how humans work and live. While these technological revolutions brought various social issues during the transition period, they ultimately provided humanity with a more prosperous life. The steam engine and electricity liberated humans from most physical labor, while digital and internet technologies freed them from simple mental labor.

(Interesting fact: Illia is someone you know, iykyk)

Since the 1900s, people have been researching AI technology, but there have been few groundbreaking advancements. However, since the introduction of the Transformer theory in the paper Attention Is All You Need in 2017, the pace of AI development has significantly accelerated. This breakthrough made it easier to develop large language models (LLMs), bringing humanity closer to general AI (AGI). Like previous industrial revolutions, the development of AGI is expected to significantly enhance productivity and produce major social impacts. However, for several reasons, I believe its impact will be different.

First, AGI will liberate humans from almost all forms of labor. Previous industrial revolutions freed humans from physical labor and simple mental tasks, allowing more people to engage in more complex tasks. However, AGI is capable of handling advanced mental labor, including creative activities such as art and music. Coupled with advanced robotics, this will greatly reduce the space for human contributions in productivity.

[Source: Modern Lutheran Movement?]

Of course, this does not mean that all jobs will disappear. Even in the 21st century, a portion of the population is engaged in agriculture and fishing, although this proportion is far lower than in the past. While most job types will still exist with the advent of AGI, the number of people needed to perform these jobs will drastically decrease. Notably, leaders in the AI field, such as Elon Musk and Sam Altman, believe that AI and robotics will handle global productivity, leading to widespread unemployment among humans.

Some believe that efficiency can be maximized while maintaining current employment levels, but this is a misunderstanding. To achieve this, demand must increase in proportion to the significant productivity gains provided by AGI (supply). However, for most fields, this is nearly impossible. New job opportunities must arise in areas that AGI cannot reach, but as mentioned earlier, AGI's capabilities are not limited to physical and mental tasks, making this possibility extremely slim.

Second, AI is inherently a highly centralized technology. Even before achieving AGI, the AI industry has been highly concentrated among large tech companies. This is due to the rapid development of AI technology. Since the introduction of the transformer theory, the scale of language models has increased by a factor of 10^4 from 2018 to 2022. Therefore, there are significant technological gaps between the core industries of AI technology.

• Semiconductor Design: Unlike the consumer GPU market, NVIDIA almost monopolizes the data center GPU market used for AI model training and inference. This dominance is partly due to its CUDA toolkit, which is widely used by AI developers. The surge in demand for NVIDIA H100 GPUs has led to extended delivery times. With this advantage, NVIDIA enjoys operating profit margins of up to 78%, and the upcoming Blackwell GPU, expected to be released by the end of 2024, will further consolidate its dominance. Although AMD Xilinx and Intel Altera are expanding their FPGA businesses, and tech giants like Microsoft, Google, and Meta are developing their own AI semiconductors (ASICs), these solutions still lag behind GPUs in market maturity and readiness.

• (Source: Counterpoint)*

• Semiconductor Manufacturing: The foundry industry responsible for manufacturing designed semiconductors also shows severe imbalances. The production of NVIDIA's A100 requires a 7nm process, while the H100 requires a 4nm process. These processes below 10nm are almost monopolized by TSMC, Samsung, and Intel, with A100 and H100 primarily produced by TSMC. TSMC has committed to producing NVIDIA's H100 for at least the next three years, and due to various factors, the leading position of the foundry industry and the gap between companies are expected to continue to widen.

• Computing Power: AI companies require massive computing power for training and inference processes. This necessitates a large number of AI semiconductors, such as H100, large data centers, and considerable electricity. According to Huawei, AI data centers are expected to account for 13% of global electricity consumption and 6% of carbon footprint by 2030. The costs are also quite substantial; as Jensen Huang pointed out in his keynote speech at NVIDIA GTC 2024, training the GPT-MoE-1.8T (GPT-4) model requires 8,000 H100 GPUs and 90 days. Therefore, the concentration of the industry is inevitable due to the need to protect AI semiconductors and bear enormous electricity costs. Cloud services like AWS and Azure provide computing power based on H100, which is also inevitably centralized.

• AI Models: While some AI models, such as Meta's Llama and Google's BERT, are open-source, many others are closed-source. Compared to open-source models, closed-source models like OpenAI's GPT and Anthropic's Claude typically offer better system development and customer support, but their centralization brings disadvantages in terms of cost and transparency.

• Data: Training AI models like LLMs requires vast datasets. Legal arrangements, such as Google paying $60 million annually to use Reddit's data, have led to many lawsuits regarding unauthorized data used for AI model training, raising interest in data sovereignty.

In summary, centralization is inevitable in the AI industry, and achieving economies of scale is crucial. As the AI industry becomes more centralized, there may be some micro-level issues, such as excessive corporate profit-seeking, unethical data usage, single points of failure like server outages, and the opacity of AI models. On a macro level, as the boundaries between humans and AI blur, we may face social chaos, with many people losing their jobs. I believe that blockchain technology, which essentially pursues decentralization, can serve as a counterbalance to AI and address the challenges associated with AI centralization. Let us explore how blockchain can be applied in the AI industry.

2.2 Blockchain Can Fix AI

Satoshi Nakamoto launched Bitcoin in 2008, advocating for decentralization to counter the unchecked issuance of currency by central banks. Blockchain technology can also be applied to the AI industry in various ways, as economies of scale drive centralization trends.

Among the five highly centralized elements mentioned earlier, semiconductor design and manufacturing require centralized expertise and substantial production facilities, leaving little room for blockchain solutions. However, blockchain can be effectively applied in areas such as "computing power," "AI models," and "data." Additionally, it can address issues like the proliferation of misinformation (including deepfakes) and provide basic income policy support for populations facing mass unemployment. Let us explore the potential applications of blockchain technology in the AI pipeline.

In the five highly centralized elements mentioned earlier, semiconductor design and manufacturing require high specialization and substantial manufacturing facilities, leaving limited space for blockchain solutions. However, blockchain has broad application prospects in computing power, AI models, and data. Additionally, blockchain can address issues like deepfakes and support basic income policies for populations facing mass unemployment. Here are the potential applications of blockchain in the AI field.

Decentralized Computing

Training and inferring AI models require enormous computing power and hardware. Large tech companies continuously purchase GPUs like NVIDIA H100 for model training, exacerbating the global hardware supply shortage. While services like AWS and Azure provide data centers for cloud-based AI model training and inference, they operate in a monopolistic manner, imposing high profits on users. To address these challenges, new services utilizing blockchain technology to provide decentralized computing power have emerged.

For example, Akash and io.net allow users to contribute the computing power of their hardware to the platform in exchange for incentives. There are also protocols specifically designed to provide certain services. For instance, Gensyn is dedicated to training AI models. General decentralized computing services can lower costs by utilizing idle hardware, but executing state-related computations (like AI model training) in a decentralized manner is challenging. Gensyn addresses this issue through concepts like probabilistic learning proofs and graph-based precise point protocols. Gensyn focuses on training AI models, while Bittensor focuses on AI model inference. Users can submit tasks, and decentralized nodes in Bittensor compete to provide the best results.

zkML

zkML combines zero-knowledge (zk) cryptography and machine learning (ML), promising to enhance the privacy and transparency of AI models. Many AI models currently operate in a closed-source manner, leaving users uncertain about whether these models use the correct weights and perform inference correctly. By applying cryptographic technologies like ZK-SNARK (zero-knowledge succinct non-interactive arguments of knowledge) to ML models, it is possible to prove that an AI model has executed inference correctly without revealing its weights, thus achieving privacy and computational integrity.

(Source: Polygon ID)

ZK-SNARK is a powerful cryptographic technology that can prove the validity of arbitrary computations without disclosing input data. To illustrate this, consider a real-world example: proving a person's age online. Typically, this requires complex KYC verification involving the disclosure of personal information such as names and IDs. With ZK technology, this process can be simplified and made more private. Once a user has verified their age through official means, they can generate and submit a ZK proof when they need to prove they are over 18. This proof contains no personal information but still assures the verifier of the user's age, making the verification process more secure and straightforward.

(Top image: Standard ML, Bottom image: zkML | Source: @danieldkang Medium)

Applying the same concept to ML models, consumers using closed-source ML models cannot determine whether the model has honestly performed computations on given inputs. By integrating ZK-SNARK, ML providers can assure consumers that the computations are executed correctly without revealing inputs or weights. The ZKP (zero-knowledge proof) of the ML inference process can be generated and verified through smart contracts on a neutral blockchain protocol, ensuring that anyone can trust the results.

(Source: Modulus Labs)

Although the concept of zkML is very appealing, significant challenges remain. Verifying ZKPs for specific computations is relatively straightforward, but generating these proofs requires more computational power than the actual computations. According to Modulus Labs, generating a ZKP for an 18M parameter ML model based on Plonky2 takes about a minute. Given that GPT-3 has 175B parameters and GPT-4 has 1.76T parameters, substantial progress must be made before zkML can be widely adopted.

Data Sovereignty

As the AI industry continues to develop, the importance of data is growing exponentially. However, this surge has led to an increasing number of data sovereignty infringement incidents. Through blockchain technology, individuals can manage their identity-related information through self-custody, providing data only when necessary via digital signatures. Furthermore, blockchain achieves transparent data provision or sales through incentive systems or markets accessible to everyone. Reddit showcases the most blockchain-like approach to data sovereignty, offering long-term users the opportunity to participate in its IPO while signing contracts to provide data to Google. This move reflects a new path for data sovereignty.

While slightly different from data sovereignty, blockchain also has the potential to address issues in the data labeling industry. Data labeling is crucial for improving the accuracy and ethics of AI models. Currently, this task often falls on low-paid workers, becoming a new social issue. For example, China's AI industry exploits vocational school students, and OpenAI has outsourced this work to low-paid workers in Kenya. Integrating blockchain into data labeling can democratize participation and ensure fair compensation.

Proof of Humanity

Decentralized computing, zkML, and data sovereignty may address some challenges in the AI industry. However, proof of humanity and universal basic income (UBI) can maintain human sovereignty in a society profoundly altered by AGI. Let us explore how blockchain can support human sovereignty in such profound social changes.

As AI models advance, the creation of various content forms (text, images, videos) by AI is becoming increasingly common. Distinguishing whether these outputs are human-made is becoming more challenging. The acceleration of digitization is inevitable, and with the surge in AI-generated content, related social issues will undoubtedly escalate.

(Did Caitlyn Jenner really launch a memecoin?)

These issues are not merely speculative; they are already occurring. Fraud through deepfakes that mimic personal faces and voices has become very frequent, leading to significant economic losses. Due to the existence of deepfakes, the authenticity of videos often sparks intense debates online.

The recent incident involving Caitlyn Jenner vividly illustrates this point. She announced on platform X that she was launching a memecoin on the Solana network. Given the unusual nature of this announcement, many suspected her account had been hacked. Although Caitlyn herself released a video, there remains considerable controversy over whether it was a deepfake. Only after Caitlyn's agent also released a video did the controversy subside somewhat.

(Proof of Humanity | Source: Worldcoin)

As we enter the AI era, one of the most critical challenges will be proving a person's humanity in the digital realm. This concept is known as "proof of humanity," aimed at preventing witch hunts and misinformation in the digital world. Currently, most applications rely on government-issued identity systems (such as passports or credit cards) to verify humanity. However, these methods pose privacy risks and the potential for single points of failure. Therefore, a true digital identity system is essential. Blockchain technology offers a solution that allows individuals to prove their humanity and the authenticity of the content they create, potentially alleviating issues like deepfakes.

(Scanning iris through Orb | Source: Sam Altman)

The most commonly used digital identity verification methods are biometric systems that verify specific body parts. OpenAI CEO Sam Altman is advancing a project called Worldcoin that combines blockchain technology with iris scanning. Users install an application on their mobile devices to receive a private key (account) on the blockchain. By using an iris scanning device called Orb, users can verify their human identity in the digital world. The Orb ensures that users are indeed human and that their irises have not been registered, thereby securely granting them a digital identity.

The Orb only transmits the hash of the iris data to the server, subsequently destroying the actual iris data. Users can later prove their human identity through ZK-SNARK without revealing their account address, thus addressing privacy concerns. However, potential issues like hardware backdoors still need to be resolved. The importance of human identification extends beyond content authenticity; it also plays a crucial role in the concept of universal basic income (UBI), which we will explore in the next section.

Universal Basic Income

(Source: Scott Santens)

As mentioned earlier, the emergence of AGI is expected to bring about an unprecedented leap in productivity in human history. However, this revolutionary progress will inevitably lead to massive job losses. To maintain social stability, the concept and necessity of universal basic income (UBI) are receiving increasing attention. The concept of UBI predates AGI, tracing its origins back to Thomas More's "Utopia" in the 16th century. UBI requires providing regular, unconditional financial support to all members of society. An existing example of UBI can be found in Alaska, where the Alaska Permanent Fund Dividend provides a form of UBI, demonstrating positive outcomes in areas such as poverty, employment, and health.

However, the focus here is not merely on UBI that improves quality of life but on UBI sufficient to support individuals unemployed due to AGI, ensuring they can lead fulfilling lives without work. Elon Musk refers to this as "universal high income." Similarly, Sam Altman has shown a keen interest in UBI, conducting research through OpenResearch. He has proposed innovative ideas, such as providing UBI in the form of assets and means of production (like equity or computing power), rather than just cash.

Sam Altman's Worldcoin, discussed in the "Proof of Humanity" section, is also closely related to UBI. A key aspect of UBI distribution is ensuring that only genuine individuals can receive it and preventing the same person from claiming multiple times. Therefore, preventing Sybil attacks is crucial for implementing UBI. Worldcoin achieves this through iris recognition. Currently, users undergoing iris recognition through the Worldcoin application regularly receive WLD tokens, which serve as a form of UBI. While I resonate with Worldcoin's vision, I still have some concerns regarding the distribution of WLD tokens.

Even beyond Sam Altman's Worldcoin, blockchain technology is indispensable for establishing a complete UBI system. Blockchain can enhance the transparency and efficiency of recipients through proof of humanity, as well as improve the transparency and efficiency of the distribution process, ensuring more effective and transparent UBI delivery.

3. Regardless, Humanity Will Need Blockchain

Despite experiencing unprecedented crises such as the collapses of Terra and FTX, the blockchain market has quickly regained its scale. However, looking back at previous and current market booms, the vision of the industry has undergone a noticeable shift. In 2021, many protocols were driven by a grand vision of decentralization, capturing the imagination and excitement of many. Now, although the market scale is similar, there seems to be widespread uncertainty about the direction of blockchain development within the industry and community. This is not due to any failures on our part or flaws in blockchain technology itself; rather, it is simply that the current era has not yet generated an urgent demand for blockchain technology.

While observing the application of blockchain in niche markets is interesting, the industry must aim for higher goals. As human history has shown, we will continue to experience cyclical monetary systems and revolutionary technological innovations. In these grand trends, blockchain will become a key technology for maintaining human sovereignty.