Why Bitcoin is the Currency for AI

foreign [Music] the four-year Innovation podcast this show offers an intellectual discussion on technologically enabled disruption because investing in Innovation starts with understanding it to learn more visit arc-invest.com [Music] Arc invest is a registered investment advisor focused on investing in disruptive innovation this podcast is for informational purposes only and should not be relied upon as a basis for investment decisions it does not constitute either explicitly or implicitly any provision of services or products by Arc all statements May regarding companies so Securities are strictly beliefs and points of view held by Arc or podcast guests and are not endorsements or recommendations by Arc to buy sell or hold any security clients of Arc Investment Management May maintain positions in the Securities discussed in this podcast [Music] all right welcome to the Bitcoin brainstorm alongside my co-host Justine almandra Analyst at ARC invest I'm your host Rod Rudy the co-founder of Bitcoin Park a community supported campus here in Nashville Tennessee focused on Grassroots Bitcoin adoption and a home for bitcoiners to work learn collaborate and build you've seen my friend how are you doing first of all I'm doing really well very very excited about this conversation um if you don't already know from the title we're going to be talking Ai and Bitcoin I think this is particularly compelling at ARC because of how often we talk about convergences across different technology platforms if you're familiar with Arc you know we're not just focused on bitcoin we're focused across across you know multiple technology platforms stemming from you know genomics and DNA sequencing to energy storage to robotics to of course Ai and uh broader crypto and so maybe we can start with a few intros from our guests around um around the clock and then get into you know maybe Kathy why this conversation is is particularly compelling uh from from arc's point of view I love it but let's do it let's let's start with with a few intros yeah and actually maybe even before we jump into those intros you've seen just to recap this is our second episode and we last month we recorded our first episode building and scaling with some amazing guests including yourself Kathy Jack mullers Obi from ready Preston pish and Harry sudok so if you haven't already listened be sure to check that out and subscribe to the arc invest podcast and YouTube feeds and also if this is your first time tuning in maybe it's a I can do a good explanation of what we're trying to do here as well and again thanks again to the support from you Kathy and the arc team we're taking our monthly Bitcoin topic based approach here at Bitcoin Park and applying it to this new monthly podcast series we are calling Bitcoin brainstorm so each month we we're planning to have a different topic and inviting amazing guests from a variety of areas within the Bitcoin community and as you've seen uh eloquently said on episode one as well as here our aim is simply to drive conversation around Bitcoin and the topic this month is AI and Bitcoin and we're going to try to get through all of this in 60 minutes and we're going to be covering a lot of ground so let me do some quick introductions for everyone and then just jump right into it um so joining your scene and I this month we have Frank Downing uh director of research at arkinvest who's focused on the next gen internet Frank thanks for joining us yeah super excited for the conversation awesome and Paul etoy CEO of Stack work a platform that makes and combines AI models and humans to solve real Enterprise automation problems Paul thanks again for joining us great to be here thanks rod and Lalu who's best known on the internet as roast beef without the tea is a CTO and co-founder of lightning Labs his focus is on bitcoin and lightning protocol engineering he led the design and implementation of lnd and implementation of the lightning Network and now is working on Taproot assets to bring stable coins to bitcoin and lightning Lalu thanks again for joining us great yeah thank you yeah super excited I think it's gonna be a lot of fun heck yeah and Cody Lowe head of developer and product support for fetty Cody is an open source developer and recently has taken the lead on using Bitcoin to solve and scale monetization problems facing the Wave of new generative AI applications through the AI for all hackathon which I'm sure we're going to touch on today Cody thanks for joining us thank you rod and Kathy Wood founder CEO and CIO at ARC invest Kathy thanks for joining really happy to be here rod and so I guess I take it from here please do okay all right well I'm very excited about this as uh yaseen said uh yaseen leads our crypto effort but because uh he he works with uh other analysts he's uh tuned into this idea of convergence it's it's a part of our DNA um and I don't think most of the asset management World understands how powerful the convergences are going to be between and among the technologies that are evolving today uh and the way I like to describe why they're going to be so powerful the convergence is is we're we're we're looking at s-curves so new technologies you know they start out slowly and then they gain momentum and you end up into the Steep part of this S curve well uh I think we are uh at a very similar point in both Bitcoin and aai they're both both moving into the Steep part of the s-curve so you have S curves feeding S curves creating opportunities for explosive growth potentials the first convergence that served Arc really well was Tesla most people thought Tesla was an auto company it is not of course it is the convergence between among three of our major Innovation platforms uh robots autonomous vehicles are robots and will be robots energy storage they will be electric it is the most efficient and uh least expensive solution and three artificial intelligence uh they're going to be powered by AI autonomous taxi platforms and I think many people have been shocked at the explosive growth of uh of uh Tesla and we haven't seen anything yet because autonomous hasn't happened yet so pretty excited about that and I've always thought there would be something to discuss in in terms of Bitcoin converging with uh some of these other Technologies our first experience with convergence around Bitcoin was right after Elon had put Bitcoin on Tesla's balance sheet and uh and then he was faced with an onslaught of controversy around how environmentally destructive Bitcoin is or it was and uh we ended up working with block Square uh Jack Dorsey and uh his his crypto team and um we put together a seminar which I believe is still up uh right yesen it's still up on yes and I think it was called the b word uh so we we uh talked about a convergence that would um turn the tide in terms of this thinking that Bitcoin is environmentally damaging this idea of the convergence between Bitcoin and energy ecosystems uh uh it's been very interesting to watch Exxon put Bitcoin Bitcoin machines in its natural gas fields to capture uh the gas instead of letting it flare the excess gas into the ecosystem it Powers Bitcoin mining machines and they did that in six different countries around the world there are other examples where Bitcoin has become a part of utility ecosystems so when utilities put in a very large energy storage units in a very sunny place for example like Florida it will fill up the storage sun will fill up the storage and the Excess power goes into minting Bitcoin so utility ecosystems can even over build their solar and wind systems so again very exciting uh convergence uh and I I also wanted to alert everyone we are putting out a paper in the fourth quarter about convergence and how powerful uh the growth trajectories become when these uh technology convergences take place now now like to turn it over to Frank who's going to give you a sense of how we are thinking about Ai and perhaps some of the convergences sure yeah thanks Kathy um I think what what gets us really excited about Ai and and what we're seeing now with generative AI in particular um this ability for uh artificial intelligence and in particular neural networks to create new content for the first time uh so rather than predicting the next best ad to show somebody when they're shopping on Amazon or the next best movie for you to watch on Netflix with generative AI along the likes of chat gbt we can now create content you can ask a question and get a really thorough answer as if it was from an expert you should still fact check it but it's really remarkable in that capability you can do text to 3D assets uh text to image um all of these things where we're able to create and produce um usable assets for the first time and we think that especially because it's so generalizable across many different fields many different job functions has the potential to bring tremendous productivity gains uh in particular to knowledge workers so we estimate there's around a billion knowledge workers in the world today these are people that are spending their days uh at their desks and typing on their keyboards uh and with generative AI we can really accelerate and Empower them uh in their daily workflows um to be much more productive and we're already seeing that in many areas today if you look at software development as a really good example uh products like GitHub co-pilot are already showing they can reduce the time of software developers to complete coding tasks by over 50 so you can think of that as your developers can now produce twice as much code and they're not even only more productive uh the actual satisfaction when completing coding tasks is up so we're able to produce more and we're happier as we're doing it which I think is a really interesting outcome you can see the same across many different domains graphic design with all the image models is another example and we think by 2030 uh artificial intelligence is going to be embedded into virtually every software product that we use much like the and it's a bit cliche to say this but much like the internet is embedded into all of our software our products today where it's enabled so much Innovation that it's hard to pinpoint any one specific major a contributor or use case but we know the world is is much more productive today because of the internet and we think it will be even more so um by 2030 with the propriation of generative Ai and one of the things we look at to kind of understand that is cost declines uh if you look at the cost to train these models and the cost to to actually run them they've been collapsing over the last uh three years so back in 2020 the the cost to train a gpt3 model is kind of the the foundation the underpinning for chat GPT cost 4.6 million dollars and just two years later by the end of 2022 you could train a performance equivalent model for under 450 000 so it's a 10x cost decline in in two years and it's even cheaper to train that type of model today and we think that's going to continue where these models become more and more accessible to more people over time as costs come down um and I think it's it you know to bring this back to bitcoin I think it's it's interesting the cost declines enable a a democratization of access and and really you know shape that S curve that Kathy talked about with uh with technological Evolution and I think there's a really interesting role that Bitcoin can play in in helping accelerate and proliferate that uh technology as costs come down even more which is why I'm super excited to get to talk with all of all of you guys today about it let me ask this to Paul because Paul you're in the belly of the Beast with stack work I'm curious to know your comments or based on Frank's Framing and and background there yeah I mean the first thing that came to mind is Frank was talking was how ironic is it that when I first started thinking about robots as Kathy was talking about and I thought okay it's going to be folding laundry we're gonna see House Painters go away and then bam us knowledge workers who are all of us on this call got hit right away look at what's happening to finance if you look at at what's happening I mean we're so just to give everyone context so we started this company stack work several years ago actually and started paying people over the Bitcoin lightning Network around the world to do micro tasks our big unlock doing this for an application we were running at the time was that if you try to hire people to do complex tasks you really limit who can do that work and so when we had churn and people would quit we'd get another person you're paying great wages at the time data entry for 20 to 25 dollars an hour is good wages for data entry but people will get so bored they quit we figured out wait a minute if we dissected these tasks that are really 50 decisions that are going on in the human brain and then broke them down into their smallest pieces and assigned those small pieces to humans and paid them over the lightning Network then suddenly we had almost unlimited demand for the tasks people were just snapping them up as soon as we could post them and then also if that person wasn't there that day then someone else could jump in it's almost like Henry Ford with the division of labor you can now do that with knowledge work and with a lightning Network you can pay them anywhere in the world so it felt really amazing to get messages from people saying hey um you know even at two hours a day of this work I'm able to actually afford to to rent my house depending on where you live that income can be major and I said hey do you know I mean we had people sign up who didn't know what Bitcoin was had no idea what was going on so having this kind of be able to um digitize work send it anywhere in the world digitize money send it to the person doing the work I think most people don't realize that Bitcoin and lightning is also a Data Network as well so being able to send data in the form of work receive data in the form of an answer back and then give them real unseasable money is pretty fascinating so I think people are not just barely aware of that happening right now so that that's the context but having human beings helping machine learning models we've seen an incredible um just wave of these models being used so when we break broke up those tasks into small pieces some of those pieces were done by code two years ago um I would say eighty percent was done by humans twenty percent done by code the power laws flipped it's now completely opposite these models can do these simple tasks I'm not saying that's a good or bad thing I just talked about how great it is just to pay people money we're definitely on team human but if you look at the forward progress of humanity here these models are getting incredible so just a wake-up call that's is just everyone wake up this is not hey one of those futurist things that's happening down the road this is like right now we're seeing it I'm on team human as well yeah I actually think this is really fascinating uh we have a a company in our Venture fund it's called replit Uh and it's a platform for software developers uh and the the numbers are exactly what you just said Paul which is 80 of the work these developers do and is done by AI right again completely transforming the position and natural language processing because we all speak the a natural language right we understand that concept we're all going to become programmers right we learn how to we need to get to be better prompt Engineers right but replit has 25 million developers on its platform there are only 25 million developed professional developers in the world what's happening here these are not professional developers they're they're like You and Me Maybe you are programmers but I am not and even I supposedly uh will be able to do this we love replit I've got the apparent on my phone right here pay attention to their bounties program what I just talked about with breaking complex work down into small pieces think about what bounties are we have our own bounties program as well so you have Bottoms Up simple tasks hey can you identify the stop sign in this image right that's what Tesla is doing billions of times a day in terms of labeling these images but then also think about top down what's the most valuable work out there today in terms of economic impact could arguably be programming so this whole division of labor and breaking things into small pieces is being applied at the bottom of the stack and the top of the stack and if you look at what replic's doing with bounties and the ability to code on their mobile phone when that first came out I was like okay this is a little bit like a pet project no one's going to sit on the curb on their mobile phone and type code pilot comes out Ghostwriter comes out these um language generation models for coding suddenly you're not writing semicolons and dots and pound signs and all this stuff on your phone you're more describing your your pseudocoding you're you're you're talking to a code generation model and then getting functioning code out and then you have automation for deployment and it is true I mean I definitely think that what we're going to see more personalized bespoke software and then we'll be more productive so coders aren't going to go away you're just going to have the demand for more and more code what's that whole law when we digitize photography when you digitize anything you see an explosion of demand the same thing is going to happen with logic and code absolutely yeah if I can jump in here I didn't know that you guys had invested in raplet but like I've been a long time replic power user which I think um it was it was funny when you brought that up is that and so when we did the hackathon last month I used replet for the platform for it and we had like a ton of benefits for it and one of them was building out Lang chain Bitcoin tools which is this like AI framework of Lang chain for using these large language models as a programmer where you don't really have to know everything that's going on under the hood but using it off of replit I was able to deploy the tools that roast beef had made of um like basically giving AI agents Bitcoin so they can go off and make purchases and then deploy that on replit and then make like a little tutorial around it and then when people were involved in the hackathon even though they don't necessarily know too much about how Bitcoin works even though they don't know necessarily too much about how AI Works they're able to just deploy these agents give them Bitcoin and they can go off and do things right and so that's a like a little bit for bringing it to the Bitcoin element for this is that when we're talking about these large language models there's a couple elements for it which are really important one of them is that while the costs of training them are going down it's also every time you hit one of these things you can think about it as setting a graphics card on fire right so it's like I put an F something into GPT 3.5 and like you know it's relatively cheap but still like I'm hitting some graphics cards somewhere I'm basically setting it on fire and so it's not the same thing as when I just show up at like a server um like if I show up at facebook.com it's it doesn't really cost them too much right like you can kind of amortize that across the billions of people who are using the platform for it but if every single time I showed up on facebook.com it had a gpt4 generation for me well that's two cents out the door right and so one of the cool things that we've kind of seen with people moving on so using Bitcoin and AI is that because the proliferation of these models has become so like uh so wide is that it's really about the energy costs associated with it when I have someone show up if I have a free tier user and I want to to give them access to these AI Services well that's expensive it's hard to amortize those costs across there but if the user shows up and they can just do the micro payment with Bitcoin like I think a lot of jump in after this to talk about l402 specifically is that when I show up you can give me a Bitcoin invoice I can pay the invoice and so I've paid for the positive compute just like the fraction of a cent that is going to be when I show up on your platform and you know nothing about me except for the fact that I paid you there's no sign up flow I don't have to give you all my information for that one and so for free tiers for using AI Services Bitcoin becomes a really interesting opportunity there and Paul I think kind of led the charge on this in terms of how does Bitcoin become more widely adopted and so this convergence that you're talking about of that there's a lot of stuff that people use Bitcoin for where it seems a little bit gimmicky because it's like hey I can do that with credit cards or I can do that with dollars already right there's a bunch of really cool things that are now being opened up that become possible because Bitcoin is a better payments mechanism in this way and so one of them for example is instant final settlement over the lightning network with no risk of a chargeback and so that's been something super valuable in working with different AI companies where I can tell them that hey when you get paid for in this manner there's zero risk of a chargeback and so um I think Paul he can jump back in when he comes back he can talk a little bit of the chargebacks for it that's just a little bit in terms of like bitcoin's conversions with AI there where you get the instant final settlement so when people use your compute they're paying you as they use it and you can get it down to a fraction of a cent so every single time someone shows up they're paying for exactly what they use and so I'm always in the black when people use my services and because it's finally settled digital instrument I could for example give some Bitcoin to a lang chain agent and when it goes off and it does things I've already given it the money when it does its payments those are final settlements it's not like hey it's twice my credit card 100 times I go back later and then I cancel like 30 of the charges or something like that is that you can use this better payment mechanism for when you're using AI services so I don't know if a recipe for Paul you want to jump in and expand yeah that's a really good point and you know I want to go back to the point around kind of aligning costs right I think this is like one of the things that like you know Cody and I did this hackathon that's when we sort of like got together and kind of like you know combined a bunch of ideas that we had going on one thing we realized that like whenever people have these AI apps basically because they actually have their API key on the hook they would you know if they went viral they would basically have like a credit card bill a thousand dollars basically right so it's kind of like a where incentive where it's okay you know if you want to go go viral basically you need to be ready to like actually have money just to you know uh kind of like offload of that stuff right so one cool thing about the way some of the Cool Tools that we created is that like this actually allows the user to basically help you know the uh the Creator align some of the costs right I can pay one Satoshi basically for a given query basically and then at that point maybe maybe the Creator can actually either Break Even or monetize a little bit over time right rather than like everything you know being flew from the get-go this is basically a wage kind of like a line that costs you know on that level right underage this is something that I made I think in like you know 2019 or so was something called l402 right so what it is it's basically kind of like a way to sort of like embed a Bitcoin micropayment with regular API calls right uh and so people know the internet they know something they call HTTP right it's kind of like a web page typically you know I hit get and I get a web page back right HTTP also has certain error codes right if you're if you ever went to a web page maybe you had some URL typing correctly maybe you got a four or four which basically means not found right so in the very very early internet it was actually an error code called HP 402 which is payment required right but this is like you know in the very like late early 90s basically we didn't have Bitcoin you know SL was really a thing you didn't even really have e-commerce at that point but they could they sort of have the foresight to put something in there for the future and one of the ideas like how is okay well what if that future is actually you know combining with Bitcoin at that point right so what uh HP 402 is it's basically where l402 it's basically a way that you can sort of like have like micro payments metered for regular API call right so this means for example maybe it's an API call for like creating an AWS ec2 instance or something like that itself right typically I would have like some billing you know iteration on the back or something like that I have my credit card maybe I need to have additional account things like that as well while this is basically more just kind of like a direct tip for tap basically so I pay some Bitcoin basically over the light Network which is like this Global uh payment service that lets you have like very very low cost payments then from that I can actually then access the API the really cool thing about the combination of something like you know diom platform apis with lighting is that like typically many of these apis they charge like by the token right so maybe like you're typing in a particular word that's like you know a few tokens right maybe the tokens are a few cents something like that right for lightning is very unique in that it can actually send very very small amounts of money right so lightning can send even you know less than one cent maybe like a third of a sec or even a tenth of a cent basically very very small micropayment type of money so now at this point I can basically do a very much direct you know tip for Tat type basis basically right this is really cool because now I can actually just like pay as I go and actually stream this money to the AI bot or maybe of these other platforms basically this is really cool because now number one this allows things to go a lot more globally because now there's no necessary identity required you know necessarily maybe there's no credit card as well too the other cool thing now is okay well you know if there's no identity needed there's no credit card need all you need is Bitcoin you know these AI models they themselves basically compose like you know billions of like you could say like integer different values right you know in a private key is just another uh you know integer value basically right so now we can actually embed these uh you know there's probably key inside the AI model itself and actually let it hold Bitcoin and actually then interact with with the greater world and actually to do things like maybe you know buy a GPU card you know run something on the replet so this is really cool because now you have like once again this convergence going on right and when I made this stuff back in 2019 you know I was like you know there's always like a sort of like a founding you know kind of like thesis for the for lightning lab self that will eventually like have like machine to machine payments right but back then like I didn't really know what the machines were similar to Apollo saying he thought it was going to be folding you know his laundry or something like that right now we're seeing these AI boss I was like oh this is basically it right they can reason they can plan now we can give them tooling to basically right with the world just like one of the really cool convergences that I was like okay like we should do something in this area basically and then Cody and I got together before we jamming in San Francisco and started to make some of these additional tools which is uh you know really cool to see people out there people excited about it can I ask a question here uh it's very interesting to me that you're you're saying something called l42 is the enabler here that someone foresaw because when I'm trying to describe uh to people uh you know peer-to-peer and what's going on here and and and Bitcoin generally I I basically say you know in the early days of the internet because it was just an Information Network and in fact in I don't know if uh you all wouldn't remember this you weren't alive at this time but uh I think in the 80s it was illegal for consumers to use the internet and then when we got a Telecommunications Act of some sort uh that changed but the thought was this is an exchange of information no one thought of Commerce no one thought of financial services and so when I'm trying to explain what's Happening Now with blockchain uh technology is I said this is the layer they forgot to build in but what you're saying is there's something else that someone with foresight put in to enable this is that right yeah exactly right so you know the error code is the uh the 402 error code and our protocol is called l42 or lightning HTTP 402 right I think that's a really good point around kind of like it being an information uh you know Network basically I think one of the biggest Revelations the Bitcoin is that like okay well you know a money can now also be information right the money is actually just a sort of like you know 26 bit integer right so I think it was like the big thing and I think then as well like you know we didn't necessarily have you know things like um you know encryption on the web which basically enables e-commerce because before I would want to put my credit card over the wire because otherwise you're basically be in plain text so once we actually had encryption on the internet then they were able to actually make a payment system with the payment system that they created wasn't internet native right there were these companies you know Visa Mastercard basically were on the edges and also adding additional costs and things like that now we have Bitcoin which is actually the internet native currency internet actually be used very very directly right and the cool thing about you know the light Network itself is that it's Global and it's instant settlement and very very low cost as well too right so now all of a sudden I can basically pay for a given token on an llm or even anything you know small and beyond that so it's really cool kind of convergence there uh that once again like you're saying so I have the force okay we don't necessarily know what's going to be in the future let's add that error code there and if you look at the specification it says like reserve for future use right then I was like no no the future is now basically you know 2023. um I would I would love to add add just some insight from from our research to maybe help summarize or visualize this for people um the the traditional payment flow what connects a a buyer to a seller is more complicated than what you think when you just go up and swipe your card at a register and you get your cup of coffee there's there's at least four parties involved between you and the seller there's the the payment service provider the either the the stripe online or the the Square Terminal in the in the uh kiosk in the coffee shop there's the The Merchants Bank so the bank of the purchase person you're purchasing from uh there's the card Network so the Visa the MasterCard the AmEx and then there's your bank that's saying yes you have this money or this credit worthiness and then the you know the whole chain goes back and forth and uh all this amounts to multiple things one a time delay in transactions confirming to uh settlement risk and three because of that risk cost uh so we've estimated uh anywhere from on average like 250 basis points on a transaction or 2.5 percent uh to pay all these parties for processing these transactions uh and what internet native money with Bitcoin enables is the buyer and seller to be connected directly which is this internet native money that didn't exist in the 90s when the HTTP 402 concept was created which really needed internet native money to work and what you know these guys at lightning Labs have been working on is basically using Bitcoin to fill that Gap and connect buyers and sellers more directly and taking out those intermediaries and reducing fees and and increasing the speed of settlement um and for anybody who's listening to things like oh well you know it's so easy to still use a credit card why do I care about those intermediaries or the fees because the consumer usually doesn't see it you're the the Merchant is paying for it or your bank is paying for it in some way uh and it and getting denied access to these Services especially internationally happens but even in at ARC we've had this issue we have a corporate Amex that we use to pay for certain services and I tried to sign up the entire research team uh for chat GPT subscriptions and either Amex or openai had a problem with it and we literally got blocked and we couldn't pay for it and if that service was available for payment via Bitcoin and didn't need to go through the card networks uh that really wouldn't have been a problem and opening I could launch their services much more broadly if there was a neutral internet native payment standard in Bitcoin um so so the use case and the need is really there today and it can dramatically simplify the payment flow uh I was just going to point out on Frank's thing we have a situation with these AI models where you have a digital good I came from some work in Telecom with Voiceover IP you incur a cost and the product is gone when someone gets a fake credit card and makes phone calls if you ever in the 90s and odds if you ever drove around certain neighborhoods you would see Lines by pay phones so why were 15 people lined up at a pay phone on a corner I always stop and ask what's going on here someone had a credit card that they got it's not theirs and those 15 people were making international phone calls on that credit card and the phone company incurs those charges and you paid for that bandwidth for that phone call to tying up that copper line but the asymmetry is the product is gone the person has completed the transaction and got the benefit of the product when you type in the chat gpt4 and ask a question openai is paying for that inference as soon as you hit the return that GPU cycle is gone the opportunity cost of using that GPU is gone now we have a mismatch here because the credit card system is operating on a different reality so the settlement description that Frank just described um opening I thinks they have a credit card on file they believe they have incremented their Ledger for your charge for your prompt that that they just paid for that money's gone um but it's up to 60 days 90 days to actually contest that charge the money is then pulled from The Merchants Bank account this is a very painful for any Merchant that ever accepts credit cards the money that you think you have you actually don't have when you sign up for that issuing card agreement you're agreeing that the issuing Bank can pull that money from your account and that's when you can test charge isn't that fraud so um think about this for Telecom that the digital good is gone the credit card liability still lingers now think about that for these models and these viral um open-ended models that are being paid with credit cards you go to hugging face pay with a credit card go to the replit pay with a credit card you're using compute that's forever gone electricity all that stuff but the money isn't real yet like I hope this is like ingraining in everyone's brain wait a minute this is a huge mismatch now insert lightning labs and what roast beef did with an l402 and you're moving satoshi's over the moment that the good is used and we're talking about hundredths of a penny there's no County party risk um I cannot reach into lightning Labs wallet and pull back uh the money so this is an incredible um step forward that I think any business owners out there who feel this pain it's beyond just the financial pain it's like the emotional pain you put so much into your product you think you sold something you think you earned this money and then the system pulls it back from you it's uh I'm still you can tell I'm still infuriated by this day and so when I see these model companies out there hosting these things I'm like hey I've been there I know what you guys are about to run into you're going to be running into the biggest credit card look how easy it is to get credit cards on the dark web so um I think they're feeling a lot of heat from this and they're feeling a lot of pain so that's kind of the why should you pay attention to this and do this right away there's a dollars and cents reason to do it right now and it's honestly the first developed economy use case for lightning I've seen every other use case of lightning that we deal with is in Emerging Markets the global South um how do I get work how do I get paid that's the whole thing that isn't even on anyone's radar here there's no one walking around a suburb of San Diego thinking about how do I earn Bitcoin right now it's just not that common so but this is actually every company's dealing with this go ahead yeah no I was just gonna say it's it's not just dollar and cents what you're really saying and I think what Frank was describing was you're lowering the risks of this payment actually almost eliminating the risk of the you are eliminating the risk of the payment that's crazy the reason we paid two and a half to four percent uh for or the merchant has to take that hit is because you know these I call them middlemen and I think on our last Bitcoin uh brainstorm it was like light bulb went on no there's a lot of risk there's a lot of risk cascading through the system and you know there are seven steps between the merchant and the consumer those are seven those are seven risks that don't exist and compound that on the supply chain when we globalize things I'm not just talking about one hop from the store to the buyer from the store owner to the distributor to distribute follow that supply chain all the way up what's in between all those net 30 60 day contest Cycles so your view of reality your resolution on what your reality is is incredibly imprecise because for that product to hit me I have got six levels of net 30 stacked all the way back to some Factory in China right there's County party risk along that entire chain and so what we're talking about right now is we're starting with this little consumer b2c model with a person with a credit card making fake phone calls or or ripping off open AI with a with a fake card but if you actually extrapolate this all the way back out to the economy and what can happen is when you eliminate counterparty risks suddenly you start going why does my invoice all say net 30. we've accepted this whole thing of net 30 forever why because the payment system is so inefficient I got to give myself 30 days the process of payment that's absurd and so you add globalization to that and now you have this ridiculous bungee cord of train cars just slamming against each other creating incredible inefficiencies in the economy so that's off the AIA topic but um I would say AI is a very focused version of this problem and then not to mention if you think about all this impactful technology Chachi B before my kids use it it's amazing who has access to that people with a credit card who can afford twenty dollars a month to pay like that's a very small subset of humanity if this is truly powerful are we really implicitly saying that in order to have access to this these are the hurdles you have to get over to have access to that we should all be very concerned if that's uh the default that we're just letting to happen so and so Paul are you suggesting in that case the barrier to entry from sort of the payment um standpoint of okay you not only need to have access to the credit card internet but also be willing to pay twenty dollars a month are you also implying here that you know if you were to integrate some sort of micro payment service that call it stream SATs where like you could basically pay you know on the on a single prompt you know micro sense uh instead of you know instead of needing to pay the bulk and committing to a monthly subscription is that what you're implying with with something like uh the lightning Network where you have this internet native Financial system where you could actually be much more efficient in how you're buying a product or a service not just implying stating and it exists today um so Cody's doing it roast beef's doing it I'd love to make like let's let's raise a few like used micro payment use cases that we like to call it kind of streaming stats sure maybe some some some of our viewers aren't aware of yeah if I if I could if I can jump in on this one because like the stuff that Paul was talking about there like I specifically ran into when I was running this AI hackathon in the last couple months and the reason why like because I live in San Francisco so when the generative AI boom started off and there were all these hackathons every single week I was like hey this is amazing but I would talk to my friends about it they're like I'm not in San Francisco so I can't do that and so I planned out with Paul and um like we got a bunch of other people within Bitcoin and AI involved of like a global hackathon focused on the intersection of Bitcoin and Ai and the one of the first things that I ran into is that when I tried to get a global audience like kala which works on uh training Bitcoin developers in Africa and there's a couple others like vintium which work on building uh training Bitcoin developers in South America I would try to get them involved in the hackathon and they said okay well I can't get an open AI account because like they like uh my credit cards won't get accepted and the reason why is because their fraud rate is so high so that when I'm someone from like Togo or Nigeria or Kenya or something like I'm just out of the box not able to sign up for the service and so I was like hit this dilemma right where I was like okay well I want to get all these people involved but they can't get access to the tools in order to get involved and so I built a service called Matador which was based off of roast beef's aperture that he built where it basically just takes my AI API key and then anybody in the world can hit it but the moment you try to hit it instead of using an API key to hit open AI you hit my service and it's just a pass through but the proof that you get to use that pass through is that when you hit me I give you back an invoice and so I've got like a demo of it of it's like Matador Dash AI Dot replet.com like I think it's currently up right now and I'm rewriting it right now but that was something that a bunch of people used already because they didn't want to set either couldn't sign up for the service because they couldn't afford it or they just couldn't even get their credit card approved in order to do it but they were able to use those tools because they were able to Ping off my key and this is something super super important when I'm talking to the different AI companies for this because like I said before is that and Paul was like totally on top of this of that for a lot of stuff with Bitcoin where we're trying to say hey except Bitcoin versus dollars or whatever right like dollars there's so much infrastructure it's got the regulatory Clarity it's got all that it's a lot easier for people for this but if you can show up to an AI company and say hey the entire portion of your Revenue that comes from people who pay using Bitcoin has zero risk of a chargeback right that's super valuable and that's really interesting to a lot of people who otherwise wouldn't be and so that's like a very specific use case where I already saw it where they were like developers who wanted to use these tools who couldn't because they couldn't afford it or their credit cards couldn't get approved who could use my service for it and it's just a pass-through right and ideally I'd like I don't even want to run the pass-through like I just want to give like the 402 to the company doing it because and this is something that there's kind of the last moment before this is that I think that the thing that a lot of people are running into right now where they can kind of see this most obviously is like everybody is scraping everybody else all the time for training data right so like Twitter has been talking about this like the last couple weeks everybody's sort of talking about this of that because all everyone's scraping everybody else all of your apis are getting hit all of your services are getting hit you've got people and they're just Bots and like they're not paying for it but instead of giving you back an unauthorized error right like why are you unauthorized to use my service well because you haven't paid me right what's really powerful about the 402 error code is that when you hit my service in the process of denying you I'm also telling you how you can access it right and in exactly that amount that you would need to access it so every time someone hits my service instead of just saying No I say if you pay right and so that's something that like I've been talking to some companies about this who do authorization and they're trying to identify humans versus Bots and for right now the their solution for the bot is they just deny the bot entirely and so you can never use my service right but just make it pay a little bit right and then all of a sudden uh what's called like I'm always in the black whenever you use my service right so can I ask you questions including this twenty dollars open a I wondering you know meta is offering it's for free yeah right it's Foundation model and we've been thinking and others are as well we've been thinking that this would commoditize this Foundation because all it is everyone's doing the same thing it's scraping the internet from the beginning of Internet time so is there I'd like to you know this is something we're grappling with is this uh is this commoditizing or is this going to be a very big business so there's a couple elements for it I think that you're right in terms of like the costs are coming down it's being commoditized in these different ways and all that kind of stuff I think just generally speaking the specific element of it is that when I'm trying to offer a service right like currently there's like a percentage chance when I have like a new customer who comes on that they're going to stick with my service or that they're going to be monetized or anything like that what's really powerful about this is that it doesn't matter what the service is I can open it up to anybody at any time and I'm all you're always paying for it as you use it and so like this is something like just for example one of the things that came out of the hackathon was this concept of Noster data vending machines where it's literally you just have an API that is listening to a social media network of Noster and anytime it sees anything on Noster that it thinks it can provide value to it sends an invoice right and so now it's not even having people sign up for the service it's just looking for things that it could possibly help with and it's providing an invoice but because the invoice voices of final settlement because the in like I'm not running the compute unless I get paid right is that it's always profitable it just sits there and just makes money in so far as people use it and if people don't use it then like it doesn't cost you anything well I mean it costs like you know you have like an 18 a month box that you're running this on or something right so like to specifically answer your question that one of that the foundation models that people are using yes but then you still have to fine tune it over like a specific use case that you want to do and offer that as a service and when you offer that as a service what's the percentage chance that you're gonna do that I think Paul would be a good person to jump in here because he's kind of got like a whole workflow set up within stack of using these models and fine-tuning them and that sort of thing I'll describe our workflow on it is to answer the question we completely believe that it's going to be um at least for Enterprise models many many models that are good at narrow Solutions versus one large black box model uh like a foundation model that's going to handle all your needs if you think about it just take um a use case like answering a customer service email so there's no company in the world let's take Hertz rental car that's going to take a customer service email pass it to this great foundational model let's say it's chat gbt6 and then take the answer and send it back to the customer saying yep we've refunded your entire weekly rental here's two thousand dollars is just not gonna happen and so what you're going to have is um small models that you've trained we use llama 2 now almost exclusively we started off with hey does it work we'll use Chachi pt35 oh not quite let's go to chat gbd4 and pay for that we'll use chat cbd4 to do that particular task then we go all right let's find now that we kind of know what we want let's fine tune uh flan T5 remember that Falcon model that came out for a little while from the Middle East and then right now llama 2 is seems to be beating most of them out on these specific tasks then you have a workflow that says Okay first pull the topics out of the email then pull customer data on this email address from our internal database that's retrieving information for it then pass it to a third model to write the customer service email in the style that this company would normally write it in then you have a human being check it at the end and go wow that saved me about 80 to 90 percent of the work I made two fixes to it signed a personal message about the weather so it doesn't look like a bot and then I went ahead and hit send so this is like the Centaur model you know it's human with an AI assist and I think that that's going to exist for the foreseeable future and so that's why we focused on the entire thing is the workflow models are going to model you know you're always going to need humans and then we just kind of don't care which one is better necessarily we just plug in the best solution for that particular step and then whenever possible we're paying with Bitcoin along the way so hopefully that answers the question yeah and and one last thing to add on Kathy I think even if the the cost of the actual model is is completely collapses and it's open source and open source is the best model and you can download it for free the unavoidable cost remains of the actual electricity costs and your Hardware whoever is bearing the hardware expense um to actually run the model um so so those costs will will remain I was gonna say like you know as far as like you know the viewing kind of these foundational models I think number one like open source is very very important here right because you know we want to make sure all this is widely accessible and I think we said before like this basically makes everybody a power user right it basically is going to like you know increase the average intelligence of anyone in the world basically right so it's already make sure this can be like distributed as widely as possible and like you're taking foundational models like there's a lot of money that goes into basically the training but maybe you know tens of millions of dollars to get the weights but once you have the weights you still need like a pretty you know expensive GPU maybe like 6K plus to actually run the same effectively right but the cool thing is something like l42 is that like let's say I put in that money basically and I have the GPU I can actually resell that out to basically the internet I basically run this proxy this lf402 proxy in front of like you know some of which of this API model and make it look exactly like the open AI API itself also now I can actually then monetize my GPU that I you know put some money down over time basically I'm getting paid per query which is a very very cool thing right so I think like in the future it would be the case that like you know I'll pay a different cost per token for for the varying models right as we know like the you know we can basically increase the parameter side of these models for some degree they get better and better but the bigger models basically take more memory more electricity more CPU so maybe I'll pay you know one sense of query for gpt3 with GPT server or something like that maybe that's going to be 10 cents a credit right this is really cool because also now we can like a line cost very much directly and such that like you know we're even we're even just right at the the boundary like the marginal cost you know per the token so now we have these open models we can use l42 to basically shoot around the world basically have people pay for them and now we can actually distribute this a lot more widely and I think as Frank was saying now like this is really cool for these uh API platforms as well because now they can launch globally from day one they don't need to say oh we added Nigeria we added you know China we added uh uh you know South America or South Africa like that they they're basically you're hitting a launch button it's Global from day one it's really cool because now everyone around access to stuff and all these you know uh teams around the world in these developing countries that are you know hungry to learn and uh you know just further themselves and we now have this very very cool Outlet uh both on the side of them you know being able to interact with these tools but then also on the other end people being able to provide these services in a way that's very much open and very low cost and using all these Open Standards open source models so we have like a really cool open source stack now like all of our tooling's open source the model's open source and this is basically now when all this you know the cost goes to zero that we can actually build it on top of that innate a lot more yeah if I if I can add a specific one for agents for this and this is something that like you know this is something that grew on me because in the original l402 specification there was a requirement that you use a macaroon as a token which is just a fancy cookie it's a like a something super fun that Google came up with a while ago that roast beef is like fell in love with and um but basically what's super cool about these macaroons is like it's like a API token it's like I give you a key and what's cool about a macaroon is that you can take the key add additional restrictions to it and give it to someone else and they can use the same key that I gave to you initially and this becomes really powerful with agents right and this is something that like people have started working on and as a way to make agents more production ready and make them more valuable is that I can for example give a macaroon that gives access to a Bitcoin node to an agent and now the agent has a budget and so the agent can self-evaluate when I give it a task and say dude can I do this myself do I need a human for this do I need some other resource for this or something and use that that budget in order to purchase access to the things that it needs or like purchase to post a bounty or something onto stack work so that some this human solves the problem that the agent needs done so it can continue with what it was doing I think Paul's made some moves in this direction as well but that's something that like I found super cool of that you can give a budget to an agent and then if you'd ask it to do something that it can't do by itself it can either purchase resources or post a bounty so that a human does it for it and then it can continue with what it was doing and that's just a way because the way that you've the problem with agents and some of these large language models of people are running into is that it's really really hard to tell it all of the tools that it has available while keeping it also specified on the specific task you're trying to do but the way that you solve specialization within a market economy is money right is that I get really good at one thing and I pay other people who are good at those other things to do those things and so you give the agent some money the agent can go do things and when it can't do the specific thing by itself it pays for that component of it that it needs to have some someone else do right to give an example of this that I've made up and would love to put to you guys to see if it accurately represents this this is how I explain it to other people because I find this concept really fascinating is like you can go to chat gbt and say how would I create a new ad campaign for my new product and it'll probably do a good job of walking you step by step you come up with kind of your your thesis and your then you do your graphic design and then and I'm simplifying and then you you buy ad inventory on Google and you and you deploy your campaign but then if you say go do it it's actually going to be not able to do it because it's just Within These Walls of of open ai's chat window and the idea of an AI agent in general is a combination of models that you can basically form to to act more autonomous autonomously and go engage in the real world so they can go reach out to services and enact whatever your vision is but the problem you run into very quickly is my model probably needs to actually be able to pay for things to get stuff done my model is not an expert in graphic design and it can't create images so maybe it needs to go contract out to an image model like a stable diffusion model and then my model isn't Google AdWords and so it needs to be able to pay Google to get ad inventory and deploy your campaign and what this kind of combination of Frameworks that lightning Labs has built for uh using l402 basically would allow an agent to hold a Bitcoin balance and then interact with these Services the ones that allow token gated payments what we spent you know the last half hour talking about uh and interact and and be basically its own power user able to be much more autonomous and going about its work and basically fulfilling your task uh to a greater extent than it could have been possible without internet native payments that these systems accept is this already taking off so that you can the the scenario that Frank just described is it happening and is this spreading like wildfire or is this a labor of love trying to you know educate her question it is happening uh yeah sorry it's happening like uh you know a lot of the tools are open source for example like uh there's something called Lang chain which is this like sort of like uh API framework or a library to basically make agents right so what we did or uh in concert with you know Cody and uh myself you were Landing labs and we basically gave it the ability to actually hold Bitcoin itself right uh so this basically means they can hold the Bitcoin you can ask the questions they can then start to use that then we give the ability to actually navigate these l402 uh payment uh API gateways basically so kind of like handling the error code you know constructing their questions and sending it back as well too so all The Primitives are there now and then so you can say now like what's the missing pieces like these companies starting to actually run this uh you know proxy basically in front of the apis right and it's a it's something where it's like what could you think it's more or less just like a pass-through so I think it's something that like I think has the most potential and I think it's when you get like sort of the most sci-fi you know kind of like uh you know future type of thing basically of this thing able to sort of like you know hold the funds maybe you can manage individuals maybe it can even like grow it's you know funds over time I think the most important thing is basically you're able to actually sandbox this thing by like giving a very set budget of money right it's not going to go away and run it with your credit card and have a few thousand dollar credit card bill it's going to run out of you know satoshi's at some point right but you can recognize that potentially and then even maybe you know become its own sort of like uh service itself so I can imagine even agents in the future paying other agents basically for particular tasks right maybe one task is very very good at particular translation or you know data summary or like he was saying kind of like your image generation basically you can imagine the sort of like Commerce web of these ages of paying each other and even other emails as well because you know because all this stuff is programmatic you don't necessarily know if it's a human or an agent or a dog right you know as they say you know back in the day so I think that's the cool part there but I think it's still a little bit early and this is where we think it's going to be going um but at least today like the barrier isn't necessarily there it's a matter of kind of like selling that use case and getting those integration points into place yeah like I can I can add um some specific examples from and then let's go back to Paul because like I I know the example that he's going to bring up and that's a very exciting one and it's very interesting um but the of the last month when I was working with AI companies of trying to get them to add this of that they kind of get the arguments they get the use case the specific issue that they run into is that now I'm accepting Bitcoin on the balance sheet right and so you go to the developer who's very excited about adding this who kind of gets it and sees how it could be integrated and then he has to go to the back office and go ask one of the lawyers or ask one of the people involved in compliance of now we're going to be accepting Bitcoin right of how do we handle it how do we custody it that's like a whole separate step for that one but what's been really cool and this is something that I didn't even know people were doing this already but I think that a bunch of bitcoiners have identified this is that you use lightning addresses or you use something like that so in the lightning address is I can accept Bitcoin payments to like Cody at replit.app or something if I wanted to right object I just set up a pass-through for it and so it hits a Bitcoin node gets an invoice and you can pay it to that one so people can pay Cody replica.app but one of the cool things you can do is you can use one of these services that will swap that into dollars and so the thing hitting the business's balance sheet is dollars not Bitcoin and so then at that point one of the the things this has been like kind of useful in terms of getting people to start moving in this direction is that the developer can just add accepting Point payments on the front end but the thing hitting the business's balance sheet is dollars and so therefore they don't have the added complexity of the capital gains of handling the swaps of handling all that sort of thing and so with that primitive and this stuff available now you can adjust the developer by himself at the company can kind of add these things in without having to get all the checks that he otherwise might have to and that sort of sets the table for getting people to add this in so who's the intermediary there who does that conversion for yeah if you wanted to do it this way then you would have to use some sort of service like River or strike or ebex Mercado or like any of these guys who handle the banking on the back end where they can deposit to your bank account so this would not be like a purely self-custodial way of doing it but you know if you're not going to be using Bitcoin exclusively you're going to have some sort of intermediary or custodian or something like that and then like maybe eventually you get like uh stable assets like um uh with like Tara or anything like that or sorry uh Taffy assets right uh but let's go back uh Paul because you wanted to add that example of how you're using agents right oh oh no I think you guys covered it well but yeah I sort of uh I'll bring it up later it's fine but there are some real world examples of uh of these things I was gonna I think speak to Frank's um example of an ad campaign so something that's similar uh that we were hired to do um by a customer that's building celebrity websites so we went through their entire process this is creative people non-programmers and sort of saying all right we build hundreds of these sites for movie stars and whatnot a year and they have a very clear process that starts with interacting with the artist what are your favorite colors all these different things and they go all the way to a website launched on WordPress so you end up in code and images and so we took their process and we basically created these mini bounties and paying people Bitcoin over lightning go out and get the latest Instagram posts and Spotify album covers and YouTube videos so we'll pay people 50 cents 25 cents per image related to That Celebrity and so instead of the 150 designer going out to all these places and looking around they just set the job in motion and people around the world crowdsource all those images drop them into a bucket then we have all these images all right so what do we do with them now we have a model that does image to text so then the model actually looks at all the images and describes what's in there yellow keeps coming up purple keeps coming up cars keep coming up the word anime keeps coming up so now you have all of these words and then you can actually generate a prompt so then what we do is we take the word word soup and we generate a prompt that we then send to a fine-tuned version of stable Excel if we haven't mentioned him yet um from uh stable is it stable diffusion I don't know if the name of this company but he's not doing open source models stability AI That's it so stablexl is amazing it's within shouting distance of mid-journey pretty incredible so you can pass that prompt to stable Excel and then get back 20 comps so the designer would have taken forever to do the research pull out the elements generate these images now are you going to send that to the artist no no you're just getting these ideas like all of the cognition that would be required to mix and match all those things and you're getting to see some really creative comps so then they take the then they can feed it back through using another model control net to say I love the pose here but I love the anime look over there so now control that on top of stablexl gives you the pose that they're looking for but the style from this other image this is what you guys were talking about with combinatorial technology someone created control net someone created stable Excel somebody created bitcoin all these things are working together now you could not do what I just described without these tools I mean you would have been this is the stuff where we've just been talking about these cool ideas that happen in the future that's happening right now there's no technical hurdles to that whole situation what we want to see is and this is a shout out to people or call for startups would be um people creating the best models maybe you can fine-tune stable Excel better um than a mod can right and so now you have your shingle out in front of your GPU and you have this great model you advertise it our machine pays your machine for the use of your model um at some point someone's gonna hack a Tesla to do this and while it's sitting in the garage it's actually cranking out inferences on top of models but it can be any computer give me anywhere in the world um this stuff can happen it's just do you have gpus do you have tpus can you generate um inferences can you run Matrix math like that's the only question can you great we'll pay you and then um we hired someone I didn't even know the guy works in El Salvador never met this guy Raphael is an awesome programmer incredible self-taught machine learning programmer wrote a Transformer model that does specific handwriting recognition for our company that beat the pants off of azure and also AWS is um text track so we got a bill for forty seven thousand dollars last month for textract that is so wrong if you think about how badly we played that yeah that's a big Bill I respect uh their ability to track money from us um so we have replaced that completely with our own transformer because we don't need textrax features we need it to do this and this is we're seeing this on the front lines every single day and what I would love to see is Raphael's friend who we've never met create a model that we can use and then we pay him via an l402 to use his model running on some unused PlayStation 5 or gaming PC in his basement I don't care like did I get the answer back and he doesn't care because he got paid we don't have to sign a contract I don't have to you know do a vendor vetting process it's like hey did I get the inference back was it better than textract if yes I'll pay you done let's move on so do you do you think uh we've talked about El Salvador do you think because they've deemed uh Bitcoin legal tender that that you're going to be finding a lot more Talent like this there is that happening I hope so that one was completely random he we just started working together and I said by the way where are you and he goes oh I'm in El Salvador I don't know no kidding I've been 10 minutes from your house so hope to meet him one day um but yes I think there will be more talent I think there will be more exposure for that talent to reach um other parts of the economy so it shouldn't matter your Manifest Destiny should not be based on where you're born and the poor monetary policy of the country you happen to be born in you know it's just not right right if anything what this indicates is that the the barriers to entry have just completely collapsed like listening to all you guys it sounds it's like there's just a hyper efficient allocation of resources now when you've kind of embedded native economics onto the internet and you don't need to ultimately trust anyone because the incentives are one in which if I'm getting paid I don't care how you're getting there and if I'm getting what I want I will pay you and so it's it's just a just very compelling Dynamics I think even when it comes to you know maybe I I'll ask you guys like what is the what is the knowledge worker like in 10 years look like now where it's like you're almost your own startup you're doing all these micro tasks you're not really so you're you're sort of global in nature so you're hopping from you know place to place and it's like I guess what's the if someone asks like a guy in El Salvador what do you do what what is that what is that answer um I'd be I'd be curious like what what is the next generation of knowledge workers actually look like with this hyper efficient allocation yeah I think you could say he's like managing you know programming agents right I think it's one of the biggest things that cogeneration is just so good now particularly for things like you know llama 2 as well it's almost as everyone has like their own personal you know Fleet of Interest or even like you know domain experts as well too right so I think it goes from the level of like the program being able to do very very quick Pro prototyping maybe some you know quick analysis and even like oh let me learn iOS development over the weekend I can do that but I think we'll also then have like these you know much more specialized models for particular tasks maybe operating systems writing Bitcoin in front of themselves whatever else those would be hosted elsewhere in my ID we have to you know pay them automatically using Bitcoin and lightning basically say oh use some code review oh do a Security review do a security audit right things that cost so much money now because of you know all these additional um you know risks particularly in the cryptocurrency space I think we have to like you know Farm those up more readily and just be able to kind of like have like a one-man or one person you know one one woman failing team basically from any of these really qualifications because the marginal cost is just low range I like that yeah it's like I'm uh I'm a full-time robot manager yeah it's like how do you get paid well you know stats are just streamed to me yeah and you hold up your phone and it's just you know you just see the number going up yeah yeah if so that specific one that roast beef was just talking about that was something so during the hackathon last month one of the things that came out like I said before was Noster data vending machines where you just submit jobs that you want done like I want a summarization or I want a transcription where there's just something I want done but I don't necessarily care how it gets done and I don't know how to do it but I'm saying I want this done and I express my willingness to pay of that send me an invoice and I'll pay it right and so just as an example I built a replied extension that does that where it takes your PR and then it publishes the uh the code difference between like the code that you had previously and the code that you want to merge it publishes that to the Noster Network and asks I want a code review of this right and then there's like uh just basically apis that are just listening and they're saying hey I can do a code review because I'm like a fine-tuned version of like code llama or I'm a like gpt4 or something or whatever and I will do that if you give me uh if you like pay this Bitcoin invoice for me and so like that already works and that's like a replica extension that I made with um Ironclad Dev um last month but like what's really cool about that is that for all for all sorts of these things and this is where like to answer your knowledge worker question right is that like knowledge just becomes increasingly specialized and you because becomes increasingly easy for you to when you encounter something that you don't know how to do yourself is that I just want this done I don't know how to do it myself but I can demonstrate my willing to pay willingness to pay for that one and I can instantly and finally get that task done for me right and so I think Paul he is like the most unified kind of conception of like what Bounty work looks like in the future but like as an example um like if I wanted to pay someone like I need this machine learning thing done I need like the best machine learning engineer to do this I can pay that person 150 bucks in order to look at my project for three minutes right if I'm running an agent and the agent I wanted to go do something for me asynchronously I can say hey I earned like 17 bucks an hour or something right or whatever it is and I can give the agents like ten dollars and say hey basically over the course of the next hour like just figure this out for me and that's like more economical than me having done it myself it just goes off and does its best to go do these things or if it recognizes it can't do the task then it just comes back with stuff but just everyone just becomes much more productive and much more specialized and you're able to sell your specialized services to a much wider audience right it's fascinating can I just ask there's a tiny detail but that 40 47 000 Bill how much did you collapse it to oh yeah yeah yeah so that's down to four thousand dollars we'll get the full benefit in 24 hours but we're talking the 10x Improvement on cost so mistake made on our part wow um yeah and this AI stuff gets out of control I mean we've hit every limit from every provider where they stop serving this us because the stuff just runs and it'll soak up all your money and all your budget if you don't watch it so um we have counterparty risk among ourselves so I think the the full like departments owing other departments is an issue you know hey who spent my money you know it's not like you can blame devops anymore you know so I mean you're gonna see this really penetrate all the way in and just to speak to the Bounty thing for a second so just I mean I am more convicted about this than almost anything just the nature of work um look at what coding is today we've talked about dissecting complex things down into small pieces you have to pre-digest human thought to automate it it'll you're just exposing more surface area for automation so that is a huge huge huge thing to think about it applies to Legal work uh look at e-discovery look at anything that requires someone to sit and think over and over again uh by breaking that thought process up you are exposing pieces of that thought process to Automation and as soon as you do I don't think the job goes away I think the usage of those parts of humanity that are needed more Blossom it's going to be this weird thing where we're going to discover these inefficiencies in the way we do things that we just never even considered and um as soon as we start breaking it down looking at it we're gonna go why do we do it that way what if that went away and magically became infinite that's wild um so I think they'll be the positives that way and the negatives that people talk about are infinite identities uh infinite content the cost to create these things just went to basically zero and so you have you know the scarcity of Bitcoin hitting the Infinity of AI these are two colliding forces and I would put um my money and my bad on obviously our whole company on the best uh training for this world has been people who have been born and raised in the Bitcoin adversarial private keys not it'll be keys to your money and keys to your data as well so just bitcoiners understanding AI it's just it's a one for one you go I get it yep I've seen this with money this is going to happen with identity and content you're not going to know who to trust we're already there you know uh so it's it's an easy easy transition but now it's going to hit the mainstream and it's not going to be optional um you're going to be bombarded with it you have a fixed attention span so if you have infinite demands on your intention span and it gets better and better then what do you do you have to have a defense system which is your personal AI right so Yasin you're talking about I'm going to open up my phone work that you did a year ago for someone maybe earning you passive income right so it's think about it instead of TR we we think of money transfers as transactions because the the counterparties the banks that we require to do this require us to um lump it together that 35 cents or whatever people are paying now 2.9 plus 35 cents a transaction immediately exposes what can be a transaction but when you get into the the streaming of money and the streaming of value you're going to think more like what holes in the bucket are leaking money and what's pouring money at the top of the bucket and you're just gonna be thinking of it more like a plumbing system than this package system so wallets are going to change your conception of your value in the world is going to change because the nature of the exchange of value has changed whether people recognize it or not as suspected we covered an insane amount of ground in a little over 60 minutes and I'm sure we can go on for another 60 easy I think Kathy you seen Frank and everybody I think we're gonna need a version two of this uh discussion that's for sure um before I wrap maybe with some closing thoughts let me open it up for this group are there any anyone want to jump in with any closing thoughts or points they wanted to make that they didn't have a chance to make uh I think I think just kind of a last thing for it that we didn't really touch on for it but one of the cool things that Bitcoin enables for this is this kind of spectrum that uh of like cascading model sizes right and so like Paul's talked about this a little bit in terms of like people running their personal models but some of these models or whatever if you want like the most Cutting Edge stuff you're gonna need something a little bit beefier and so having this sort of spectrum that you can go up to where it's hey maybe I'm running this locally but I can't do it locally and so instead of having to go hit gpt4 or some something or like some big third party service there's like a way for me to Cascade up as we're going for this and that's kind of the way that that's something that wouldn't necessarily be possible today because you'd have to swipe a credit card and when you swipe a credit card then basically you're involving with all these third-party payment processors all that sort of stuff so that's kind of like you get some economies of scale of that that's why people go to bar that's why people go to open AI or whatever it is right but like if you can just pay a tiny little bit of money well maybe I don't need to go all the way up to the top I can just go there and so there's so uh like I think that one of the cool things Bitcoin enables with AI is that you can have people running different size models and I can Cascade my way up for them and I'm not having to get locked into these different credit card levels while I'm doing it I can just make quick payments to each one of them it's like hey this one costs 0.0001 so I'm going to pay for that one but I actually need something a little bit better but I don't need a full dollar and so I'll go there but now because of that anybody with access to gpus anywhere right will be able to run the things that they use personally and also sell it publicly and so that's like a really Cool Change that's going to happen with Bitcoin and AI that wouldn't be possible with dollars and so that's something super exciting of like a way that you get Bitcoin more widely adopted because it's something unique Bitcoin uniquely solves that can't be done with dollars and so just as many of those things that we're gonna uh that kind of come out those are going to be super important for like the adoption of Bitcoin yeah and I guess for me I think one thing with you know pointing out is that like a lot of things that we talked about just now you know the whole l402 thing the Lang chain Bitcoin kind of like agents using Bitcoin things like that well all this stuff is out right now it's all out it's all open source you can use all these open models as well so I definitely you know call on you know any developers or kind of like you know Tinker or sneaking you can basically use the stuff now and charge you basically start to make the future basically and at this point like we're saying the playing field is just so level and even if you don't necessarily have a GPU yourself you know you can basically uh you know just acquire this stuff uh you know kind of like to protect you'd know for to itself and I think one other cool thing is that like you know you can put uh this proxy uh you know aperture which is on our GitHub github.com in front of any API right so if you want to kind of like have an agent in any of these apis or even do something programmatically you can just do this over any API in proxy that's a really cool thing in terms of like being able to just drop this infrastructure in and gaining all of this new functionality you know today at the ready so that's why it's so exciting that we can continue to have all these really cool combinations and build you know what we think is going to be the future with all these open source Technologies open source is just so magical uh that's one of the things I got me into in the first place I'll give one kind of macro analogy that I like to use to to answer your scene's question and also tie back to something Paul mentioned at the very beginning of this conversation you mentioned Henry Ford talking about specialization of Labor another analogy we like to use um in the early 1900s is the Advent of the assembly line which dramatically increased productivity in physical labor made physical labor much more productive we're able to create more cars we're able to produce more physical goods and people worked less the average hours worked declined at a faster rate during those say 20 years than throughout the rest of the uh 1900s I think we're heading for a very similar period where generative AI is serving as the assembly line for knowledge workers where it's accelerating knowledge work for the first time where we're able to all produce dramatically more and the average hours we work may go down just like it did with the Advent of the assembly line in the early 1900s but the the thing we haven't talked about that always comes up in these conversations is will there be mass unemployment and that's a common refrain when there's new automation tools throughout history and we think just like with the assembly line no there won't be if you look at the the data from that time period uh the actual unemployment rate went down meaning people were more employed uh and GDP per capita went up all while we were working less hours per day on average and I think you could see the same thing happen over the rest of this decade with generative AI where we are able to produce more and maybe have a more relaxed work schedule um all while more people are employed because uh this technology can be distributed globally uh to tie in the Bitcoin component I always have aha moments when we're talking about convergences I actually had an aha moments around our first Bitcoin brainstorm as well uh I guess what has hit me here uh it's uh something Paul said at the end here we're going to see uh I think you said Clash or the collision between you know the infinity associated with AI and the scarcity associated with Bitcoin and so what does that mean and uh here's where I come back to uh my economic Roots which is wow you could have a parabolic move in the price of Bitcoin uh and and I think that will happen I mean we're on in record saying that um but it also brings me back to okay uh Global monetary system means of exchange unit of account and so I know we're going to have uh one of these brainstorms with art laugher and he's going to be poking at all of this and talking about the quantity rule versus the price Rule and you know and and really wanting to understand the cryptography and everything so um I'm really happy we're doing these brainstorms so thank you absolutely and thank you to everybody I know we touched on a number of topics we touched on Noster Lang chain agents and so on so if you're listening all the way to this point be sure to check out the show notes we're going to have links to a number of great resources for you to dig in even uh further again I want to just thank all the guests for joining us and hopefully you tune in next month when we do this again thank you Arc believes that the information presented is accurate and was obtained from sources that Arc believes to be reliable however Arc does not guarantee the accuracy or completeness of any information and such information may be subject to change without notice from Arc historical results are not indications of future results certain of the statements contained in this podcast may be statements of future expectations and other forward-looking statements that are based on ark's current views and assumptions and involve Known Unknown risks and uncertainties that could cause actual results performance or events to differ materially from those expressed or implied in such statements foreign

Channel: ARK Invest

Views: 35,041

Keywords: innovation, investing, cathie wood, cathy wood, kathie wood, kathy wood, cathie woods, cathy woods, kathie woods, kathy woods, ARK, market news, fintech

Id: IQrRO6FoYl0

Length: 81min 46sec (4906 seconds)

Published: Thu Sep 07 2023