As the year draws to a close, I wanted to clarify my thoughts on AI agents and blockchains. This is not a normative post, but a hopefully clear-eyed assessment of what the tradeoffs are here.

Previously, my thesis was that agents will autonomously exchange value with each other using public blockchain accounts. Why? Because crypto allows permissionless participation, final settlement, immutability, fast time to finality (if you use the right blockchain), and most importantly, the ability to transfer arbitrarily small amounts of value.

Far from being unique, this thesis seems to be the consensus position from everything I've read on Crypto Twitter, blogs on this topic and so on. In recent times, I've re-evaluated my position on the extent of autonomy of autonomous agents.

Free commerce is never actually fully free. Some portion of it is plowed back into the commons through taxation. While some people have decried all taxation as theft, a sensible middle ground is that some taxation is needed to fund activities that people neither have the capability nor the means to do alone. You know, things like electing governments, defense and policing, coordinating the private buildout of public infrastructure (or building said infrastructure) among other important things.

Regardless of where you fall on the taxation=theft spectrum normatively, a sober assessment of how things are on the ground tells you that we do have taxation, and that policy is in the hands of a few elected individuals, all of whom possess a variety of beliefs regarding taxation, and all of whom will likely agree that some taxation of commerce is needed. This much should be evident from any realistic assessment of our current situation, no matter the country you live in.

Given that we have taxation on all commerce (in a variety of ways), it follows that purely agentic commerce will be taxed. If this is likely to be true, what are it's implications?

I'm offering a few below:
1. Unless there's middleware built to transfer the fruits of agentic commerical activity over to the public sphere it seems infeasible that this commerce will be non-KYC'ed.
2. This means that in the interim period before we have fully autonomous commerce between agents, agents will need to be owned by someone so they can be taxed.
3. When humans enter into the picture, their preferences tag along. Would a human hold an asset that goes up 1000% and then crashes 99% to spend on one-time digital content? Would said human allow the agent that they own to do the same?
4. They definitely could, but the path of least resistance in the short timeframe seems to be AI agents with stablecoin accounts that can be traced back to meatspace identities.
5. Marry that with stablecoin regulations and it's easy to see how agentic commerce feeds into stablecoin adoption and massive onchain liquidity in the short timeframe.

TL;DR: Agentic commercial activity on blockchains will use stablecoins as the unit of account, not native crypto tokens. It will also be KYC'ed, not permissionless. This will mean that purely autonomous commercial activity will not be possible in the short term.

AI X Web3 has a different meaning here: Regulations on AI will intersect with regulations on blockchains and keep truly autonomous agents from going off and doing something entirely by themselves because ultimately, the liability for their actions will trace back to humans.