The noted venture capitalists Andreessen Horowitz have released their predictions for “crypto” in 2025 and while most of them are what you would expect to see in such a list (eg, tokenisation of what they call “unconventional” assets and more companies accepting stablecoins), there were some that stood out for me because they provide a useful cross-check on my own thinking in this field. I’ve picked out what I think are the three key areas where I think we will see creativity in the coming year.
Crypto Hits And A Miss
First, Carra Wu’s prediction that “An AI Needs a Wallet of One’s Own to Act Agentically”. As she points out, we are seeing a transition from chatbors to intelligent agents but as of now they cannot properly participate in markets in a “verifiably autonomous” (ie: not human-controlled) way. While in early experiments agents are using stablecoins to transact there is the potential for AI agents to control their own wallet and manage their own digital assets, which opens up some pretty interesting use cases. I think this view is central to the evolution of fintech, because I share the Open Wallet Foundation (OWF) view of the digital wallet of the future as “a container where you can store and access digital assets, credentials, and other useful items, such as tickets and keys” that will be working in tandem with “another software component, most often called an agent, [which] can put items into a wallet, take items out of a wallet, or process items in a wallet”. This means that I expect that most transactions will be initiated by agents, not people. There seems to be plenty of money flowing in this direction. (Nevermined, one of the early entrants in the AI payments race, just raised another $4m from VCs led by Generative Ventures.)
While not the point here, I must mention again that this will take us into the world of digital identity and “know your agent” (KYA) procedures. In summary, smart wallets (ie, wallets controlled by agentic AIs) should be central to fintech strategies. Which leads us on to…
Second, Eddy Lazzarin’s prediction that “As More People Use AI, We’ll Need Unique Proof of Personhood”. I could not agree more and have for the longest time argued that IS-A-PERSON will be the most important verifiable credential, most likely issued by my bank. We all recognise that in a world of deepfakes and deception, there is a pressing need for individuals and organisations to know whether they are dealing with Alice or an AI. And for a variety of reasons, we should demand personhood credentials allow you to prove you are human without revealing anything else about your identity.
There is a more general point to be made about digital identity here though, which James Boyle explores in his new book “The Line”. As James points out in his introduction, we did not give corporations legal personhood and because we saw the essential humanity behind their web of contracts but because it was useful. It was a way of aligning legal rights and economic activity. We wanted corporations to be able to make contracts. Personhood for companies was a useful legal fiction, a social construct. Will the same be true for artificial intelligences?
Well, you will not be surprised to learn that I think that legal personhood for bots is inevitable, and indeed for the same reason, that it was inevitable for companies. It means that bots will be able to enter into contracts with one another (and I mean actual legal contracts, not “smart” “contracts”, the persistent scripts executed under certain circumstances on certain kinds of shared ledgers) and, as a naturally corollary, pay one another. I think we need this kind of digital identity infrastructure really rather soon! Consider just the basic issue of ownership. Suppose you have a personal treasurer bot that deals with your finances and manages your interactions with financial institutions. Who does the bot belong to? Is it a machine like your car that belongs to you or it is more like a taxi that belongs to someone else, such as a bank, that you rent when you need it?
(It is not difficult, and in fact it is well-understood, how to create a personhood system and there are different ways to achieve what Eddy predicts. Vitalik Buterin, who has written about this more than once, says that the simplest way to define a proof-of-personhood system is to create a list of public keys where the system guarantees that each key is controlled by a unique human. In other words, if you’re a human, you can put one key on the list, but you can’t put two keys on the list, and if you’re a bot you can’t put any keys on the list. I think this is too simple, because I can see why some people, such as James Bond, might need more than one key, but the general point is that we know what to do.)
Third and finally, Andrew Hall’s prediction that “Liquid Democracy Online Goes Physical”. This caught my eye because I disagree with it. I am sure it is true that there is a window of opportunity to experiment with new, tech-enabled governance — not just online, but in the physical world too. However, I am sceptical about how Decentralized Autonomous Organizations (“DAOs”) may evolve in practice. Also, note that with rights come responsibilities: A new CFTC order suggests that voting alone is enough for personal liability for the actions of a DAO, which brings us back to the issues of wallets and personhood and so on.
Bringing technology to bear in making physical voting more secure makes sense, but there is a big barrier to doing this online: coercion. That maybe a manageable problem for certain kinds of voting (eg, shareholders voting for board members) but I cannot see how it can work at scale. It is one problem to ensure that a person voting for something is actually entitled to vote, it’s quite another thing to ensure that their vote is their own and they are part of what I sometimes see referred to as “coordinated inauthentic behaviour”.
Crypto Impact
It’s going to be another interesting year in crypto, of course it is, but I find myself more interested in how the demands from the crypto world will advance the state of the art in, and practical deployment of, the digital identity technologies, systems and schemes that we need to make the online world safe and secure, convenient and cost-effective.
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