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RE: Will market incentives evolve Bitcoin into a fully autonomous AI?
mmm, strange reasoning... Maybe it is possible, but my brain doesn't buy it. AI can do a lot, but still, a human mind and brain is so sophisticated and has Billions of years of evolution behind it, I just can not believe AI can produce something similar in such a short amount of time... But maybe I am just being naive...
The full capabilities of a human mind are not necessary to run a business more efficiently than a human. AI is capable of being a truly raitonal agent in game theory. AI is capable of processing information far beyond what limited human can handle. In the paper "Toward an Attention Based View of The Firm" we can see that the main bottleneck in business is scarcity of attention. The human decision makers have very limited attention and also very limited ability to process information. Most importantly of all the human decision makers are naturally irrational (inefficient) and this inefficiency in humans is why AI at least for something like Bitcoin mining have every advantage.
The human brain might have advantages at nursing, at raising children, at care taking, but when you talk about the cryptocurrency mining business or trading you are talking about data driven processes which benefit from big data, ability to process the data, ability to reason over knowledge, in ways which a human brain cannot scale to keep up with.
An automated Bitcoin mining business will always be able to do more with less resources which means lower transaction fees, which means greater efficiency of operation, at least based on all the economics and game theory an irrational player has no advantages.
In economics, game theory, decision theory, and artificial intelligence, a rational agent is an agent that has clear preferences, models uncertainty via expected values of variables or functions of variables, and always chooses to perform the action with the optimal expected outcome for itself from among all feasible actions. A rational agent can be anything that makes decisions, typically a person, firm, machine, or software.
In game theory and classical economics, it is often assumed that the actors, people, and firms are rational. However, the extent to which people and firms behave rationally is subject to debate. Economists often assume the models of rational choice theory and bounded rationality to formalize and predict the behavior of individuals and firms. Rational agents sometimes behave in manners that are counter-intuitive to many people, as in the traveler's dilemma.
I know what I'm saying probably sounds ridiculous but if you want real world current evidence who is better at trading? Human beings or bots? When bots are better at trading then it means the bots are smart enough to be better rational agents than humans who at best pretend to be.
References