Written by: sysls

Compiled by: AididiaoJP, Foresight News

Introduction

Betting on cryptocurrency is essentially equivalent to betting that humanity will continue to pursue the acceleration of its own development, which seems like an easy wager to make.

The reason this is a key moment is precisely because meaningful artificial intelligence has been born, finally providing us with tools that can fundamentally change the way we interact with cryptocurrency.

This article aims to explain why cryptocurrency will gradually become an asset class of strategic importance.

Limited by Due Diligence

Since the dawn of humanity, we have been seeking acceleration. We measure success by the level of efficiency and continuously work to reduce friction in various activities. Remote fund transfers that once took weeks to complete can now be accomplished in seconds.

Currently, the bottleneck in most human activities is no longer technology, but the verification process itself. The reason job applications, opening bank accounts, and fundraising take weeks is not because of a lack of technology to expedite these processes, but because the cost of verification must be borne by humans.

Take the hiring process as an example: employers need to confirm that a candidate is not "unqualified." This is not because the candidate has never been hired before, but even if they have prior work experience, independent verification still holds value—because if the eventual hire performs poorly, their former employer will not bear any responsibility. Furthermore, there is a belief that the best employees are often already employed. Additionally, different work environments and responsibilities mean that past performance may not necessarily predict future performance.

Thus, employers pay the cost of due diligence through multiple rounds of interviews and written tests. This process is time-consuming and labor-intensive, characterized by chaos, non-structuredness, and uncertainty; this also explains why the hiring process depends not only on skills but also to a considerable extent on luck (for example, was the interviewer in a good mood before meeting you? Or did they just have a heated argument with their partner?).

It’s not hard to infer that all costs in such processes fundamentally belong to verification costs.

The act of formally hiring, in contrast, is quick and relatively simple—requiring only an email and a digital signature. This means that, theoretically, if there existed a magical scoring system that could output an absolute score for candidates on all dimensions you care about, and you held a high level of trust in that score, the time required for hiring could be reduced to: the time spent algorithmically filtering and ranking scores of interest, plus the time taken to send the employment contract and wait for it to be signed.

Building the Trust Chain

The reason you can achieve nearly instantaneous hiring with a magical scoring system is that you have delegated the responsibility of verification to that system and have learned to trust it.

In practice, this situation is not uncommon.

Potential employers within the same industry refer to the due diligence results of previous employers—if you have attended a top university and completed challenging tasks, the chances of your resume being discarded will decrease.

Whenever possible, humans tend to pass on verification costs to higher-level entities, trusting that the entities have completed necessary verification work for their own benefit. For example, for most people, before opening a bank account, we do not conduct lengthy, detailed, and expensive due diligence on a bank but rather trust that government banking regulators have fulfilled their responsibilities.

If we have adequate trust in the government and its ability to enforce the law, we can accept its judgment, believing that the bank is solvent enough to safely handle our financial affairs.

Such "trust chains" are ubiquitous and constantly at work, involving a wide range of transactions, big or small. A startup lacks the brand credibility necessary for natural trust, but a large, reputable, and successful venture capital firm can inject brand credibility just by investing in it. Although the public may not be familiar with the startup, they will choose to trust it because they have delegated verification responsibility to the due diligence process of that venture capital firm.

Challenges Facing Cryptocurrency

Traditionally, cryptocurrency does not provide any "higher-level entities" to which we can transfer verification costs. The lack of higher-level entities to arbitrate honesty errors—such as mistakenly exchanging 50 million USDC for tokens worth 5,000 dollars, or even sending funds to the wrong address—means that the verification costs are entirely borne by the users themselves.

This is indeed a daunting challenge, as smart contracts themselves are not designed for quick interpretation by humans. This is essentially the core reason why the cryptocurrency market has long been limited to a relatively niche audience. In cases of mass adoption of cryptocurrency products by retail users, the vast majority occur through large centralized entities (like Binance, Coinbase) that abstracted away the complexities of smart contracts.

These retail users may not understand how smart contracts like Aave operate, but they have learned to trust Binance, allowing it to build a business model by abstracting the complexities of smart contracts for users and encapsulating them in a simple interface.

This means that for users with relatively weak technical knowledge, there are effectively two choices when entering the cryptocurrency field: either wait for centralized entities like Binance to provide an abstracted version for a fee, or interact directly with the protocol and carry the enormous risks that may arise.

Although the cryptocurrency market has matured relatively, operations still carry high friction costs, and transaction approvals remain fundamentally concerning—primarily because users are deeply aware that if a mistake is made, there will be no recourse. Therefore, users will carefully verify, but reading and parsing each transaction on-chain is not an easy task, not to mention comprehensively understanding the smart contracts being interacted with.

For those who are adept in software and its infinite combinability, the allure of cryptocurrency lies in an ecosystem composed of modular components that can interact with each other in a trustless manner, ensured by algorithmic rules. However, the barriers on the path to this idealized vision lie in malicious actors and poorly designed edge cases, forcing humanity to expend costs and energy to verify each modular component one by one.

The Uniqueness of the Current Moment

The rise of meaningful artificial intelligence has for the first time allowed us to delegate verification responsibilities to a higher-level entity. This fundamentally changes how we interact with smart contracts. We will no longer need to personally verify the design and behavior of smart contracts, nor necessarily understand the details of our own transactions.

Instead, we will learn to trust a single entity—our intelligent agent. This direction has shown tremendous potential, as intelligent agents have demonstrated considerable expertise in understanding and reasoning about code. They can tirelessly parse and check transactions and understand the algorithmic rules followed by each smart contract in seconds.

This means we can finally realize the potential of cryptocurrency through intelligent agents. If we need to interact with nine smart contracts in a single atomic transaction to efficiently achieve the desired outcome, we only need to let the intelligent agent verify whether the transaction can meet the intended goals and ensure that there are no irregularities. Everything is accomplished from there.

As intelligent agents continue to iterate, their capabilities in this regard will further improve.

The Significance of Algorithmic Verification

If we can solve the demand issue for verifying smart contracts and their derivative transactions, we will step into an idealized landscape: we can engage in various interactive activities while maintaining permissionless and trustless characteristics, ensured by algorithmic rules. When the cost of verifying smart contracts approaches zero, we will receive all the verification and assurance benefits provided by smart contracts for free.

The primary impact of this change is that all processes within this paradigm will shift to operate at computational speed. For a civilization devoted to pursuing faster development, reducing process friction, and enhancing efficiency, it is hard to imagine we would deviate from this paradigm.

Therefore, an increasing number of goods and services will be equipped with smart contract interfaces to accurately define what users will receive and the exchange conditions required to obtain those items, which is logically inevitable. At the same time, this also becomes a self-reinforcing paradigm—each successful product will create a combinable module that can be used to construct other products in the future. For example, suppose a decentralized exchange establishes a reputation system based on trading capacity. Those looking to recruit traders through a trustless employment protocol may filter based on the reputation contract of that decentralized exchange. Meanwhile, a lending protocol might view this as one dimension of credit scoring.

Such a paradigm will not only achieve extremely high efficiency—all processes and transactions operate at computational speed—but also possess infinite scalability, with its capabilities continuously enhancing over time with increasing participation, unlocking more possibilities. This is a positive cycle, an accumulative paradigm.

Conclusion

Therefore, if you believe humanity will continue to move in the direction of least resistance, continuously seeking solutions that allow for faster development, greater efficiency, and more significant achievements, then the present moment is undoubtedly the era of cryptocurrency.