Finance’s Future: Crypto as Zeitgeist

"Money is null without a marketplace; it becomes only an entry in a database for resource allocation, in which value ceases to hold meaning. Viewed through the lens of information theory, money today has much in common with an internet connection, which for any recognisable use similarly requires relational context. How best to optimise its technical attributes may in the age of AI become a task of immense philosophical and technical urgency. Quite possibly, the world will need a new type of financial network that balances the traditional functions of money as a consistent store of value and convenient means of exchange." [1]

Introduction – Finance's Future

A. Crypto is the Zeitgeist of Finance

Why does crypto matter? We propose a straightforward answer. Crypto matters because it is the future of finance.

Finance has two main purposes:

1. Allocation of capital from entities with surplus units to entities with need for capital
2. Redistribution of risk that comes from the undertaking to create cash flows, to the entities more willing to incur this risk

Financial markets, therefore, have three purposes:

• Price discovery to determine how financial resources should be optimally allocated,
• Liquidity that enables investors to convert their assets into cash when needed,
• Reduced transaction costs through efficient mechanisms for searching and evaluating investment opportunities.

The assets traded on these markets—financial assets, often intangible but backed by tangible assets—serve as vehicles for this transfer. Most are legal claims to future benefit (like securities) that entitle owners to future cash flows. A growing part of assets is purely intangible with no tie to the real economy: cryptocurrencies, online gambling, and gaming are a few examples.

Financial technology is then the means through which financial markets are implemented. What started with ledgers on stones evolved to paper certificates and now to bits. Crypto is the newest paradigm in financial technology and will fundamentally reshape how we achieve the twin aims of finance and how we implement financial markets. It is poised to make the biggest jump since the invention of the financial system itself 500 years ago.

The change will be driven by crypto as technology. Digital tokens, transferred on blockchain-based systems, will be the communication layer for assets. The infrastructure enabling the transfer will be commonly owned and decentralized. The financial system will become global and open, accessible from everywhere with an internet connection. It will no longer be controlled or restricted by nation-states and their handlangers. The shift from centralized, monopolized, and archaic infrastructure onto public blockchains will be as radical as the transition from the pre-internet to the post-internet era for the information industry. As the internet broke the monopoly on information, crypto will break the monopoly of large banks, states, and Wall Street over finance. As with the internet, the individual will be able to participate more openly, but also be less protected and more exposed to algorithms and technological tricks of large software companies.

Crypto’s value thus lies in two points:

1. Providing the infrastructure for an open and global financial system no longer controlled by gatekeepers.
2. Rethinking the underlying logic of capital.

Bitcoin, for example, is not a currency; it is a monetary protocol. Its “use case” is existing as an uncensorable, decentralized store of value—a social agreement upheld by millions of opt-in participants. Similarly, Ethereum’s “use case” is a global settlement layer for smart contracts—a decentralized computer. That some people use it to trade digital cat pictures is a side effect. It turned out that, in the end, the internet was also not about pet stores.

It is underappreciated that a monetary protocol, invented by a pseudonym, is able to be worth a trillion dollars and still exist 17 years after its invention. When we forget the short-term gambles, crime, and Ponzi schemes, it seems obvious that the financial system will be crypto. Not because of any of the gimmicks we’ve seen so far but because it will serve the aims of finance: allocating capital and distributing risk in a global world that is moving from the society of nation-states to one of market states.

Over the long run, the main innovation will be the democratization of capital and opportunities. By opening public markets to individuals for both investing and raising capital, crypto will spur a new wave of human (and machine) innovation. It is, in a sense, the counterpart to the information democratization through the internet. While the internet enables everyone to research and accumulate information, crypto will broaden capital markets to allow easier funding.

One need only look to Silicon Valley, where the potential of young nerds led venture capitalists to disregard age as a barrier. This system of pure meritocracy and available capital for anyone with a good idea gave us the largest companies of the last few decades. Imagine a world in which every person, not only tech founders, has access to developed capital markets—to raise debt and equity to work on their passion. Meanwhile, as pension systems fail worldwide, crypto enables ordinary citizens to invest in these ventures, securing their financial wellbeing.

Finally, the crypto revolution is inherently connected to the revolution happening with AI and the creation of the market state as a new constitutional structure. Finance is connected to the economy and the broader interplay of constitutional change. The nation-state of the last 70 years was defined through its currency, its ability to defend its citizens, and its power to censor, regulate, and tax. We are witnessing a deterioration of these values because of the state’s inability to fulfill its aims in a global, digital world.

Global capital markets and constitutional order stand in reciprocal relationship. The change in the financial system will contribute to the change of our constitutional order and vice versa. Crypto gives every person the tools to access a stable currency independent of government and nation. Equally important is the redefinition of capital markets in the age of AI. AGI as the culmination of computing will rewire the world and its capital markets in unpredictable ways. Especially given the lack of expertise and interest of the average person in financial matters, the main participants in the future financial system may be AI agents and supercomputers.

Crypto is a counterbalance against AI. It promises decentralization where AGI promises centralized genius. It may be a vital guardrail in preventing powerful models from monopolizing capital, especially if an AI struggles to get its “hands” on decentralized assets.

By allowing finance to become pure software, crypto offers us the chance to redefine capital movement for the next age—one in which money and capital lose their traditional underpinnings. Both consumer finance and macro capital allocation will be forever changed by AI that outperforms human capacity. This age of AI will force us to reconsider not only what money is, but also what finance is in general.

However, we lack a comprehensive theoretical framework. These essays aim to establish such a theory, predict the future of financial markets, and explore their relation to our changing constitutional order and the rise of AI.

B. Crypto is Eating Finance

We want to clarify a key position and outline the structure of the remaining argument in this series of essays:

Crypto's only meaningful use case is finance, and we will not discuss non-financial applications here. Much has been said about myriad potential use cases—science, logistics, decentralized compute for AI, etc.—but these are derivative because crypto will dominate the financial system and therefore the allocation of capital, ultimately touching many areas of life (much like the internet touched every aspect of life by reshaping the flow of information).

Crypto is, was, and will be about finance. It changes how we distribute capital and thus influences many aspects of our lives.

Before delving into the future, we first must explain why crypto is so disruptive for financial markets. The reason lies in both the nature of the financial system and the nature of crypto:

• Today’s financial system is the result of decades of development, heavily regulated by states to protect users from harm, address information asymmetries, principal-agent conflicts, and moral hazard. Regulation introduced centralized choke points and compliance regimes. As the system grew, regulations grew, which in turn stifled innovation.

• Public blockchains achieve the same ends that traditional finance law aimed for, but via technology rather than complex oversight. The root causes of regulation can be mitigated by trust-minimized, transparent infrastructure. This results in regulatory arbitrage—the “unregulated” space necessary for radical new financial technology to arise.

• Protocols and Tokens. Protocols, inheriting trustless transactability from blockchains, create global, permissionless products that are technologically superior. Tokens enable these protocols to rapidly achieve network effects.

• AI. Humans may find crypto’s interface cumbersome, but AI does not. For advanced AI agents and supercomputers, legacy financial markets are labyrinthine. Crypto, by contrast, is natively digital, globally accessible, and frictionless—exactly what AI will find most efficient.

At present, crypto and traditional capital markets exist as two disconnected systems. Crypto remains largely confined to the online economy, while traditional markets remain regulated by nation-states. One of the major theses of these essays is that crypto and traditional finance will converge into a hybrid world that fuses the best of both.

C. Three Main Drivers of Crypto – Regulatory Arbitrage, Protocols and Tokens, AGI

1. Regulatory Arbitrage

Our first hypothesis is that crypto’s defining advantage is regulatory arbitrage, rather than lower fees or faster transactions (though these may emerge as side benefits). The key to crypto’s disruptive potential is that it operates in a domain mostly unencumbered by the decades of finance-specific legislation that shapes traditional markets.

This freedom from legacy constraints—provided by decentralization—enables reinventing capital markets from first principles. Modern regulation has grown into an enormous web, originally designed to mitigate information asymmetries for paper certificates and telegraphs. Crypto’s global, trust-minimized infrastructure means these same objectives (investor protection, fairness) can be approached via transparent code rather than rigid oversight by central authorities.

2. Protocols and Tokens

Protocols are how regulatory arbitrage materializes into products. They are self-executing financial services on public blockchains. Tokens are programmable ownership claims (or revenue shares). They enable network effects by inviting users to collectively own and build the ecosystem. They also facilitate global capital raising, since anyone with an internet connection can participate.

While the word “token” is often used loosely, it can be helpful to distinguish:

• Decentralized network tokens: these function as the economic and security glue for an underlying protocol, essential for its operations.
• Asset-backed tokens: these represent existing financial assets or real-world claims (stablecoins, tokenized securities, etc.) on blockchain rails.

Within a few years, we can expect all major financial assets to have tokenized representations, simply because blockchain-based ownership offers portability, composability, and programmability that legacy systems can’t match.

3. AGI Leads to a Crypto-Based Financial System

Third, crypto will not take over by converting every human retail user. Its unstoppable momentum comes from functional superiority for machine finance—the demands of advanced AI and AGI for a different financial system.

Traditional finance, with its outdated technology, siloed infrastructure, and myriad regulations, presents friction for autonomous AI agents that require seamless, 24/7, global interaction. Crypto is perfect for this: its globally accessible, programmatic, and deterministic nature is an ideal environment for automated or AI-driven transactions.

Humans find private keys and gas fees cumbersome; AI does not. Instead, an AI finds legacy compliance and offline settlement lags a bigger obstacle. Hence, as AI adoption grows, so will crypto adoption—initially for institutional use. Over time, intangible digital capital (software, data, tokens) will matter as much as the physical economy, and crypto rails will dominate.

Moreover, the rise of AGI and superintelligence might reduce the role of nation-states in capital allocation. Global AIs, market states, and transnational corporates need robust, trust-minimized infrastructure. That, in essence, is what crypto provides.