Introduction

The trajectory of human civilization has been punctuated by revolutionary transformations in both monetary technology and productive capacity. The agricultural revolution enabled settled civilizations and the emergence of commodity money. The industrial revolution catalyzed the development of banking systems and paper currency. The digital revolution produced electronic payment systems and, ultimately, cryptocurrency. Each monetary evolution corresponded to fundamental shifts in how human labor created and exchanged value.

We now stand at the threshold of two potentially simultaneous revolutions of unprecedented magnitude. The first—the development of Artificial General Intelligence—promises to transform the nature of cognitive labor itself, automating tasks previously reserved for human intelligence and achieving capabilities that will likely exceed human performance across virtually all economically relevant domains [13.1]. The second—hyperbitcoinization—represents an increasingly discussed transition from fiat monetary systems to a global Bitcoin standard, fundamentally altering the relationship between money, time, and economic coordination [13.2].

The thesis of this chapter is that these two phenomena are not merely coincidentally contemporaneous but deeply and necessarily interconnected. AGI’s emergence creates deflationary pressures that existing fiat monetary systems cannot accommodate without increasingly severe distortions [13.3]. Simultaneously, AGI’s capabilities create authentication and security challenges that only proof-of-work systems can address [13.4]. Bitcoin, as the first and most established energy-based consensus network, provides both the monetary architecture suitable for technologically-driven deflation and the security infrastructure necessary for AI-era verification.

Moreover, AGI poses simultaneous threats to all five dimensions of human agency—economic, temporal, informational, computational, and political. The preservation of human autonomy in a post-AGI world requires technological infrastructure that operates independently of centralized control, resists manipulation by superintelligent systems, and anchors abstract digital systems to physical reality [13.1, 13.5]. This chapter demonstrates that Bitcoin provides precisely this infrastructure.

Agency, in the philosophical sense employed throughout this chapter, refers to the capacity of an individual to act independently and make their own free choices [13.6]. This capacity is not binary but exists along multiple dimensions, each of which can be enhanced or constrained by technological, institutional, and social conditions. A slave possesses minimal agency despite being biologically capable of action; their choices are constrained by external coercion. A sovereign individual possesses maximal agency when their capacity for choice encounters minimal external constraint. As Hirschman argued in his seminal work on institutional dynamics, the ability to exit—to withdraw from arrangements one finds unacceptable—represents a fundamental check on institutional power [13.21].

The framework developed here identifies five dimensions of agency that collectively define the scope of human autonomy:

Table 13.1: The Five Dimensions of Human Agency

Source: Author’s analysis based on [13.2, 13.5, 13.6, 13.21]

Hyperbitcoinization: The Monetary Foundation

The Concept and Phases of Hyperbitcoinization

Hyperbitcoinization refers to a hypothesized rapid, voluntary transition from fiat currency systems to Bitcoin as the dominant global standard for value storage, exchange, and accounting. The term was first introduced by Daniel Krawisz in 2014, who described it as ‘a voluntary transition from an inferior currency to a superior one’ that would proceed through network effects and rational self-interest rather than government mandate [13.7].

Unlike historical monetary transitions—such as the movement from silver to gold standards or from gold to fiat currency—hyperbitcoinization would represent an emergent, bottom-up phenomenon driven by individual and institutional decisions to adopt superior monetary technology [13.8]. The process exhibits classic network effect dynamics: as Bitcoin adoption increases, its utility as money increases, attracting additional adoption in a self-reinforcing cycle.

Table 13.2: Phases of Hyperbitcoinization

Source: Author’s analysis based on network adoption theory and monetary transition literature [13.7, 13.8, 13.23]

Fundamental Properties of Bitcoin-Standard Money

A post-hyperbitcoinization economy would operate under fundamentally different monetary constraints than the current fiat system. Bitcoin’s supply is mathematically capped at 21 million units, with issuance following a predetermined halving schedule that reduces block rewards approximately every four years [13.9]. As of 2024, approximately 19.6 million Bitcoin have been mined, with the final coins not expected to be issued until approximately 2140. This absolute scarcity—the first in monetary history—eliminates the possibility of supply-side inflation entirely.

Table 13.3: Comparative Monetary Properties: Fiat vs. Bitcoin Standard

Source: Author’s analysis based on [13.2, 13.9]

Having established the monetary foundation that hyperbitcoinization would provide, we now turn to the threats that AGI poses to human agency—threats that make such a monetary transition not merely desirable but potentially necessary for the preservation of human autonomy.

AGI Threats to Human Agency

AGI—defined as machine intelligence capable of performing any intellectual task that a human can perform—represents a qualitative discontinuity in the relationship between humans and their technological creations [13.1]. For the first time in history, humans face the prospect of sharing their cognitive niche with non-biological entities whose capabilities will likely exceed our own. The implications for human agency are profound and largely unexplored in mainstream discourse.

AGI poses simultaneous threats to all five dimensions of human agency [13.1, 13.5]. Economically, AI systems can manipulate markets, generate synthetic identities, and overwhelm traditional financial controls. Temporally, the accelerating pace of AI development compresses planning horizons and increases uncertainty about the future. Informationally, AI can generate unlimited quantities of synthetic content, making truth verification increasingly difficult. Computationally, AI systems can subvert digital consensus mechanisms that lack physical anchoring. Politically, AI-enhanced surveillance and control technologies offer unprecedented tools for authoritarian governance—what Zuboff has termed ‘surveillance capitalism’ in its corporate form [13.22].

Table 13.4: AGI Threats by Agency Dimension

Source: Author’s analysis based on [13.1, 13.4, 13.5, 13.22]

The Collapse of Cognitive Labor Costs

The emergence of AGI represents the most significant transformation in the cost structure of economic production since the industrial revolution. While previous technological advances automated physical labor and routine cognitive tasks, AGI promises to automate non-routine cognitive work—the domain that has commanded premium wages throughout the knowledge economy era [13.1].

Current large language models already demonstrate cost reductions of 1,000× to 50,000× across various cognitive tasks compared to human labor [13.10, 13.11]. These estimates compare current AI service costs (e.g., API pricing for GPT-4 class models) against fully-loaded human labor costs including benefits, overhead, and error correction. As these systems improve toward and beyond human-level general intelligence, the marginal cost of cognitive output approaches zero for an expanding range of tasks. Legal analysis, medical diagnosis, software development, financial modeling, scientific research, and creative work—all become automatable at negligible marginal cost.

Table 13.5: AI-Driven Cost Reduction by Cognitive Task Type

Source: Author’s analysis based on AI service pricing and human labor costs [13.10, 13.11, 13.24]. Note: Estimates reflect current trajectory extrapolations; actual timelines subject to technological breakthroughs and regulatory factors.

The economic disruption outlined above necessitates a fundamental restructuring of monetary systems. The following section examines how a Bitcoin-standard economy would accommodate these deflationary pressures while preserving the conditions for human economic agency.

The Post-Hyperbitcoinization Economic Architecture

Deflation as the Natural State

Under a Bitcoin standard, the natural trajectory of prices would be deflationary—the inverse of the inflationary norm that has characterized the post-1971 fiat era. This deflation would not represent economic contraction but rather the transmission of productivity gains to holders of the monetary unit.

As Selgin argued in Less Than Zero, productivity-driven deflation differs fundamentally from the demand-collapse deflation feared by Keynesian economists [13.12]. When prices fall because technology reduces production costs, consumers benefit through increased purchasing power while producers maintain profit margins through lower input costs. This ‘good deflation’ characterized the late 19th century American economy, which experienced robust growth alongside gently falling prices under the gold standard [13.13].

The rate of post-hyperbitcoinization deflation would depend on the pace of productivity growth. In an AGI-accelerated economy where productivity growth could reach 10–15% annually or higher, deflation rates would correspondingly increase.

Table 13.6: Deflationary Scenarios Under Bitcoin Standard

Note: Calculations assume constant effective Bitcoin supply and stable monetary velocity. Actual deflation rates would vary based on velocity changes, adoption rates, and macroeconomic conditions.

The Transformation of Credit and Debt

One of the most complex aspects of hyperbitcoinization concerns the resolution of existing debt denominated in fiat currencies. Global debt currently exceeds $315 trillion according to the Institute of International Finance [13.14], encompassing sovereign obligations, corporate bonds, mortgages, consumer credit, and various derivative instruments. The transition to a Bitcoin standard would fundamentally alter the real burden of these obligations.

Following hyperbitcoinization, the structure of credit markets would transform fundamentally. Credit would be based on existing savings rather than fractional reserve creation. Under the current fiat system, banks create money through lending—a loan generates a deposit that itself can support additional lending [13.15]. Under a Bitcoin standard, lending would be constrained by actual Bitcoin reserves. This return to ‘full reserve’ banking would dramatically contract credit availability relative to current conditions but would also eliminate the systemic risks associated with bank runs and credit crises.

Table 13.7: Credit System Transformation Under Hyperbitcoinization

Source: Author’s analysis based on [13.2, 13.15]

The monetary and credit transformations outlined above establish the economic context within which human agency must be preserved. The following section examines how Bitcoin’s specific technical properties address each dimension of agency threatened by AGI.

Bitcoin as Infrastructure for Agency Preservation

Having established the five dimensions of human agency and the threats posed by AGI, we now demonstrate how Bitcoin provides the essential infrastructure for preserving agency across each dimension. The analysis reveals a deep structural connection between sound money and human freedom that extends far beyond economic considerations into the very foundations of autonomous existence.

Economic Agency: Self-Custody and Value Preservation

Bitcoin provides the foundation for economic agency through three critical properties: absolute scarcity ensuring value preservation, permissionless transactions enabling exchange without intermediation, and self-custody eliminating counterparty risk [13.2, 13.9]. Under fiat monetary systems, all three capacities are compromised. The ability to earn is constrained by inflationary taxation. The ability to save is eroded by persistent currency debasement. The ability to transact is conditioned on permission from financial intermediaries.

AGI amplifies these threats while introducing novel vulnerabilities. AI systems can manipulate financial markets at speeds impossible for human traders. AI-generated synthetic identities can overwhelm traditional controls. AI-enhanced surveillance can track every transaction. More fundamentally, AGI threatens to render human economic contribution obsolete [13.1, 13.16]. Bitcoin provides the only monetary system that maintains its integrity regardless of the cognitive capabilities of potential attackers.

Temporal Agency: Planning Across Time Horizons

Temporal agency—the capacity to plan, defer gratification, and make decisions across time horizons—represents perhaps the most distinctively human form of autonomy [13.5, 13.17]. Fiat monetary systems systematically destroy temporal agency by making long-term planning irrational. When money loses value over time, deferring consumption is penalized rather than rewarded.

Bitcoin provides a temporal anchor that preserves agency across time in two critical ways [13.2, 13.9]. First, its fixed supply ensures that savings maintain and likely appreciate in purchasing power over time, making deferred gratification rational regardless of external conditions. Second, Bitcoin’s predictable issuance schedule and immutable protocol provide certainty in an uncertain world. Unlike fiat monetary policy, which changes at the discretion of central bankers, Bitcoin’s monetary policy is fixed and knowable indefinitely into the future.

Table 13.8: Monetary Systems and Temporal Agency Indicators

Source: Author’s analysis based on Bureau of Economic Analysis, Personal Saving Rate [PSAVERT], 1960–2024; Federal Reserve, Financial Accounts of the United States [13.18, 13.19]

Informational Agency: Truth Anchoring in a Synthetic World

AGI threatens to collapse informational agency entirely [13.1, 13.4]. Large language models can generate unlimited quantities of persuasive, personalized content indistinguishable from human-generated material. This capability enables the creation of synthetic realities tailored to individual psychology. The concept of ground truth becomes problematic when any apparent evidence could be synthetically generated.

In a world where any digital content can be synthetically generated, the Bitcoin blockchain provides an unforgeable record of events anchored to physical reality [13.9]. Every block contains a cryptographic hash that cannot be generated without actual energy expenditure; every transaction represents a verifiable transfer of scarce digital property. The blockchain’s timestamping capability enables verification of when information existed, creating anchors of authenticity that synthetic content cannot replicate.

Computational Agency: Verification Without Trust

The fundamental principle underlying computational agency can be stated simply: verify, don’t trust [13.9, 13.20]. When individuals must trust digital systems without the capacity to verify their operations, they surrender agency to whoever controls those systems. AGI exacerbates this crisis by making digital systems’ behavior increasingly unpredictable and opaque.

Bitcoin represents a fundamentally different approach to digital systems—one designed from first principles around the requirement of verification without trust [13.9]. Any individual can run a full node that independently verifies every transaction in the network’s history; no trusted party is required to attest to the validity of the ledger.

Table 13.9: Security Model Properties Comparison

Source: Author’s analysis based on [13.4, 13.9, 13.20]. Scale: 0–3 (Low), 4–7 (Medium), 8–10 (High). Scores reflect author’s assessment of each system’s properties relative to stated criteria.

Political Agency: Exit Infrastructure

Political agency—the capacity for self-determination, freedom from coercion, and the ability to exit unjust systems—represents the culminating dimension of human autonomy [13.5, 13.6, 13.21]. AGI dramatically increases the capabilities available to authoritarian regimes [13.1, 13.4]. Automated surveillance can monitor every communication and transaction. Predictive systems can identify dissidents before they act. Autonomous enforcement systems can deploy without human sympathy.

Bitcoin provides the exit infrastructure necessary to preserve political agency against AGI-enhanced authoritarianism [13.2, 13.9]. Its censorship-resistant transaction network enables value transfer even when traditional channels are blocked. Its self-custody capability allows individuals to secure wealth without reliance on institutions that might be compromised or coerced. The ability to memorize a seed phrase and carry potentially unlimited value across any border—without physical detection, without institutional records, without counterparty risk—represents an unprecedented capability for exit [13.2].

The Thermodynamic Foundation: Why Only Proof-of-Work Suffices

Across all five dimensions, Bitcoin’s effectiveness in preserving agency derives from a single fundamental property: its anchoring to physical reality through proof-of-work [13.4, 13.9]. As established in Chapter 3, you cannot fake energy. This simple physical truth provides the foundation upon which all other protective properties rest.

The Physics of Security

AGI threatens human agency primarily through its capacity for manipulation in the digital realm—generating synthetic content, processing information at superhuman speeds, optimizing persuasion strategies, and coordinating actions across digital systems [13.1]. These capabilities are formidable within the purely informational domain. But they encounter a hard limit when faced with systems that require real physical resources to operate.

Energy-based consensus creates this limit [13.4, 13.9]. An AGI cannot generate valid Bitcoin block hashes through superior intelligence; it must expend actual energy through actual computation. An AGI cannot forge Bitcoin transaction histories; it must outcompete the entire network’s hash power, requiring physical infrastructure on a massive scale. An AGI cannot manipulate Bitcoin’s monetary policy; the rules are encoded in distributed software that the AI cannot unilaterally alter.

Why Proof-of-Stake Fails

This is the crucial insight: alternative cryptocurrencies secured by proof-of-stake, which secure networks through economic rather than thermodynamic mechanisms, become vulnerable to AI-controlled capital accumulation. A sufficiently resourced AI system could acquire majority stake through market operations, regulatory capture, or coordinated attacks on staking infrastructure. Only proof-of-work provides security guarantees that hold regardless of adversary intelligence or capital resources [13.4].

The Stable Equilibrium Hypothesis

We propose that a Bitcoin-denominated, AGI-enabled economy represents a stable equilibrium that other configurations cannot match. Consider the alternatives:

Fiat currency with AGI leads to unstable outcomes. The deflationary pressure from AI-driven productivity conflicts with inflationary monetary policy, creating either accelerating inflation (as central banks expand money supply to maintain positive price growth despite falling costs) or depression (as deflation occurs despite monetary efforts, collapsing the debt structure). Neither path is sustainable [13.3, 13.23].

Alternative cryptocurrencies with AGI face security challenges. Proof-of-stake systems become vulnerable to AI-controlled capital accumulation. Only energy-based security provides guarantees that hold regardless of adversary intelligence [13.4].

Bitcoin with AGI represents the stable configuration. Deflationary monetary policy accommodates and transmits technological progress. Thermodynamic security addresses AI-era verification requirements. The combination produces a coherent economic system aligned with both technological capability and physical reality.

Table 13.10: Comparative Economic Outcomes: AGI Under Fiat vs. Bitcoin Monetary Standards

Source: Author’s analysis based on [13.1–13.5, 13.23]

Limitations and Uncertainties

Several important limitations constrain the analysis presented in this chapter. First, AGI timelines remain highly uncertain; the scenarios described could materialize within years or decades, and the specific capabilities that emerge may differ substantially from current projections [13.24]. Second, Bitcoin adoption faces significant barriers including regulatory resistance, scalability constraints, and user experience challenges that could impede or prevent hyperbitcoinization. Third, alternative technological solutions—including new cryptographic methods or hybrid systems—could emerge to address AI-era security requirements. Fourth, the transition dynamics from fiat to Bitcoin-denominated systems involve complex political economy considerations not fully addressed here. Finally, the five-dimensional agency framework, while analytically useful, necessarily simplifies the multifaceted nature of human autonomy.

Despite these limitations, the theoretical framework presented here identifies structural relationships between monetary architecture, AI capabilities, and human agency that merit serious consideration by policymakers, technologists, and citizens navigating the coming transition.

The Sovereignty Stack

This chapter has examined the convergence of two transformative phenomena—the emergence of AGI and hyperbitcoinization—through the lens of human agency preservation. We developed a comprehensive framework analyzing human autonomy across five fundamental dimensions and demonstrated that AGI threatens each dimension simultaneously while creating deflationary pressures incompatible with fiat monetary systems.

The analysis reveals that what began as a solution to the double-spending problem in digital currency has become something far more significant: the foundation for human sovereignty in an age of machine superintelligence [13.2, 13.9]. Bitcoin is not merely sound money; it is the base layer of what might be termed the ‘sovereignty stack’—the technological infrastructure upon which human autonomy can be preserved regardless of what AI capabilities emerge.

The key insight is that the properties which make Bitcoin effective as money—scarcity, verifiability, censorship resistance, self-custody capability—are not merely economic conveniences but existential necessities in a post-AGI world [13.2, 13.4, 13.9]. The same properties that prevent monetary debasement prevent algorithmic manipulation; the same properties that enable financial privacy enable resistance to surveillance; the same properties that permit borderless transactions enable exit from tyranny.

Table 13.11: Comprehensive Framework for Preserving Human Agency Post-AGI

Source: Author’s analysis based on [13.1–13.24]

The future relationship between humans and AI remains uncertain, but one thing is clear: humans who possess economic resources they control, who can plan across time, who can access verified truth, who can verify digital systems, and who can exit arrangements they find unacceptable will navigate that future as agents rather than objects. Bitcoin provides the infrastructure for all five capacities. In this sense, it is not merely an investment or a currency or a technology—it is the foundation of human agency in the machine age.

The post-hyperbitcoinization economy would differ fundamentally from current arrangements. Credit would be based on genuine savings rather than fractional reserve creation. Deflation would transmit productivity gains directly to consumers. Time preference would shift toward the long term. And human agency would be preserved through infrastructure that cannot be circumvented by any intelligence, artificial or otherwise.

The future this chapter describes is not certain—technological forecasting is inherently speculative, and both AGI timelines and Bitcoin adoption trajectories remain highly uncertain. However, the theoretical framework presented here suggests that if AGI emerges with capabilities approaching or exceeding current projections, and if Bitcoin continues its adoption trajectory, their convergence represents not merely a possible future but potentially the only stable equilibrium for a technologically advanced civilization seeking to preserve human agency.

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