• The Deflationary Legacy of Technology: When Abundance Becomes Crisis
• Why Debt Cannot Survive What’s Coming
• Surveillance: The Hidden Engine of the AI Boom
• Bitcoin vs. Surveillance: Competing Visions of Order
• Why Bitcoin and Gold May Be the Most Undervalued AI Trades
• AI and Bitcoin: Building the Parallel System
• Freedom Is an Infrastructure Problem

The rise of Artificial Intelligence (AI) in recent years has been met with mixed reactions that range from euphoric excitement to extreme skepticism. At the centre of all these advancements, are a ton of questions regarding what an AI driven future looks like. Will it enhance productivity while destroying jobs? Will it usher in the era of UBI as more humans become redundant from the impact of its creative destruction? More importantly, will prices of goods and services come down despite living in a debt based monetary system that requires inflation for growth?

In this essay, we will examine how AI represents both the culmination of decades of deflationary technological pressure and a potential catalyst for systemic economic transformation. We will also discuss how Bitcoin and AI are actually complementary technologies that could usher in the real golden age.  The goal being to obviously separate hype from reality so that you can have an alternative framework to think about what’s coming and be ready for it.

§The Deflationary Legacy of Technology: When Abundance Becomes Crisis

The past quarter-century has witnessed an unprecedented deflationary wave driven by both globalization and technological advancement. A long-distance phone call used to cost a fortune, rationed by the minute, a luxury reserved for special occasions. Today it’s free, video calls spanning continents consume negligible resources. This isn’t an anomaly but the natural trajectory of technology driving costs toward zero.

Moore’s Law didn’t just make computers faster, but it made computing exponentially cheaper. The internet collapsed distribution costs across industries. The cost of sequencing a human genome fell from $100 million in 2001 to under $1,000 today. Software updates improve your devices over time at no additional cost.

Yet strangely enough, a Big Mac is 46 times more expensive today than in the 1950s. Did beef become 46 times scarcer? Did hamburger assembly become 46 times more complex? No, the opposite occurred. We developed more efficient farming, better logistics, superior refrigeration, and streamlined production. By all technological measures, a Big Mac should be cheaper today. Instead, monetary expansion has masked genuine productivity gains, creating the illusion that abundance requires higher prices.

The result? A massive transfer of wealth from labour to asset holders. From savers to debtors. From those producing real value to those closest to money creation. Technology promises abundance; while the monetary system delivers extraction.

If previous technologies were deflationary, AI promises to be deflationary on an unprecedented scale, what some observers call “the most powerful deflationary force in history.” Unlike past innovations that automated specific tasks or industries, AI has the potential to automate cognitive labour across virtually every sector simultaneously and usher in an unprecedented deflationary tsunami.

§Why Debt Cannot Survive What’s Coming

Modern monetary systems are not neutral accounting frameworks. They are explicitly debt-based growth machines. Credit expansion, interest-bearing liabilities, and positive inflation expectations are not incidental features but they are structural requirements.

Productivity has always been inherently deflationary. When goods and services can be produced more efficiently, marginal costs fall and prices compress. Historically, such gains were gradual, sector-specific, and absorbed through population growth, credit expansion, or new forms of demand. The system could adjust, inflate, and maintain the illusion of nominal growth.

AI breaks this historical pattern entirely. Against this backdrop, a sufficiently rapid AI-driven productivity shock does not simply “boost growth.” It destabilizes the assumptions on which the entire system rests.

For example imagine that a business takes out a $10 million loan because they project selling $20 million worth of widgets. But AI-driven deflation means prices fall and they can only sell $5 million worth of widgets. They can never pay back that $10 million loan. Their revenue in nominal terms has collapsed while their debt remains fixed.

Multiply this dynamic across every business, every mortgage, every municipal bond, and you see the endgame. This is the classic debt-deflation dynamic but accelerated by machine intelligence rather than cyclical downturns. Productivity explodes just as the financial system loses its ability to absorb it.

Banks collapse because their loan books become worthless. Savings evaporate as institutions fail. Lending stops entirely. The velocity of money grinds to a halt. This is why deflation, despite representing genuine increases in productivity and wealth creation, cannot be allowed to happen under the current regime. The system would rather impoverish everyone through inflation than allow prices to fall and expose the unsustainability of the debt mountain..

The fatal flaw though is that AI has finite deflationary effects, and it can only reduce costs so far before hitting physical limits of energy and materials. Fiat currency, by contrast, has no upper limit on its ability to offset deflation through expansion. This sounds like fiat’s advantage, but it actually is its death warrant. The ability to print without limit means the temptation to print without limit. As AI pushes deflationary pressure to unprecedented levels, fiat systems will print to unprecedented levels, ultimately destroying the currency’s value and credibility entirely.

All paper money, lacking the constraint of scarcity, faces the same endgame when confronted with sufficient deflationary force. The question is not whether this happens, but how quickly.

§Surveillance: The Hidden Engine of the AI Boom

At this point, a critical distinction emerges that most AI optimists completely miss, which is that not all AI productivity is neutral or liberating. A substantial portion of the current AI boom is built not on autonomous production that creates genuine abundance, but on surveillance-driven data extraction and behavioural prediction. The dominant narrative frames AI as a productivity multiplier i.e. robots farming, AIs discovering drugs, automation freeing humans for higher pursuits. This is incomplete, and dangerously so.

The most economically dominant AI systems today do not create abundance directly. They extract knowledge about humans. Surveillance-driven AI depends on:

• Continuous behavioral monitoring across platforms

• Identity binding and correlation of economic, social, and biometric data

• Predictive modeling of human actions for profit or control

• Algorithmic enforcement of incentives and penalties

This applies both to private platforms monetizing attention and behaviour, and to states deploying AI to process surveillance data for policing, taxation, and governance. In this model, AI productivity is not primarily about producing more with less, but it is about knowing more in order to extract more.

This is the core profit and control mechanism for a lot of the AI innovations today. The more precisely behaviour can be modeled, the more effectively it can be shaped. AI thus becomes the operating system for soft coercion: nudging, pricing discrimination, credit access, visibility, and compliance; all mediated by algorithms.

In this system, money becomes a control interface.

§Bitcoin vs. Surveillance: Competing Visions of Order

In an era defined by artificial intelligence, mass surveillance, and collapsing monetary credibility, Bitcoin’s deeper function emerges: it is anti-surveillance infrastructure disguised as money.

At a civilizational level, surveillance-centric AI and Bitcoin are not just different technologies but they are competing visions of order.

Surveillance AI optimizes for:

• Predictability

• Control

• Centralized oversight

• Behavioural compliance

• Efficiency through management

Bitcoin optimizes for:

• Unpredictable human agency

• Censorship resistance

• Voluntary coordination

• Minimal information disclosure

• Resilience through decentralization

One assumes humans must be managed by intelligent systems to maintain stability. The other assumes humans can coordinate peacefully if the rules are neutral and cannot be manipulated.

Bitcoin’s design choices are political in the deepest sense; because no identity layer is required for participation, no permissioned access gates, no centralized ledger operator to coerce, no behavioural profiling embedded in the protocol, no ability to freeze, reverse, or selectively censor transactions at the base layer

This is not accidental as Bitcoin was engineered in response to a world where trust in institutions had collapsed and where surveillance was already expanding under the banner of security and stability. Bitcoin is not merely scarce money. It is coordination without observation. It is economic action without identity fusion. It is savings without permission. It is exchange without behavioural contracts.

§Why Bitcoin and Gold May Be the Most Undervalued AI Trades

In a world of monetary repression, capital controls, and rising social strain, equity optionality narrows. Companies can be regulated, taxed, broken up, or nationalized. Their value depends on the very system that AI threatens to destabilize.

By contrast, Bitcoin and gold do not represent claims on future productivity. They are non-debt monetary assets outside the control of failing institutions.

Their repricing thesis is rooted in three properties:

1. They do not require nominal growth to function

2. They benefit from monetary disorder rather than stability

3. They provide an escape from debt-based valuation frameworks

Paradoxically, the more successful AI becomes at collapsing costs and exposing the fiction of debt-based money, the more fragile fiat systems appear and the more valuable non-sovereign monetary anchors become.

AI-led deflation requiring central banks to fully reserve or monetize most debt suggests Bitcoin and gold may be the most undervalued AI plays on the board, not because they benefit from artificial intelligence directly, but because they anchor value and freedom in a world where intelligence accelerates faster than trust.

Bitcoin provides what the author and investor, Jeff Booth, describes as a structural exit from increasing surveillance and currency debasement. It’s a neutral, global monetary base layer, akin to the internet’s TCP/IP protocol. It represents an alternative trajectory: productivity without surveillance, money without monitoring, value without permission.

If AI becomes powerful enough to model and predict human behaviour at scale, then the scarcest asset is no longer compute or capital but it is unobservable agency. Bitcoin preserves this by allowing economic action outside the feedback loops that train surveillance models.

§AI and Bitcoin: Building the Parallel System

Perhaps most intriguingly, AI itself could accelerate the construction of an alternative economic system built on Bitcoin rails, one that delivers genuine abundance without surveillance-enforced compliance.

The combination is powerful, because AI reduces the cost of building and operating economic infrastructure while Bitcoin provides a monetary foundation resistant to manipulation and monitoring. Together, they enable the construction of Galt’s Gulch, not as Rand’s hidden physical valley, but as a parallel digital economy operating under fundamentally different rules.

Furthermore, AI enables new forms of value creation native to a Bitcoin economy. Digital services, automated businesses, autonomous agents conducting commerce, all operating with Bitcoin as the native currency and benefiting from its fixed supply. In this model, AI systems produce value that accumulates to Bitcoin holders through deflation rather than being extracted through inflation. The productivity gains actually benefit those participating in the system rather than being captured by monetary authorities or surveillance monopolies.

The old fiat system can’t fix itself from within. The debt burden is too large, the political incentives too entrenched, the dependence on inflation too complete, and now the surveillance infrastructure too valuable to those in power. We need a structural exit, a parallel system that can accommodate technological abundance without requiring algorithmic control of human behaviour.

Bitcoin provides the monetary foundation; AI provides the productive engine. Together they create the possibility of an economy where technology’s natural deflationary tendency enhances human flourishing rather than threatening systemic collapse or triggering authoritarian surveillance.

§Freedom Is an Infrastructure Problem

AI forces both tensions to their breaking point simultaneously, creating what may be the final confrontation between technological progress and monetary manipulation, between human autonomy and algorithmic control.

If AI collapses time, cost, and coordination faster than our monetary systems can adapt, the question becomes not how productive we can become, but who controls the systems that manage the fallout and whether humans retain the ability to act outside those systems.

Societies will be tempted to trade freedom for control, surveillance for stability, autonomy for managed abundance. The infrastructure for this trade is being built now, justified by economic efficiency and security concerns. Bitcoin rejects this trade completely.

It is not just money. It is not just an asset. It is an exit from the surveillance–debt–control stack. It is the preservation of human autonomy in an age that increasingly seeks to model, predict, and manage it.

The cost of everything is falling, this is the reality AI makes undeniable. The question is whether we’ll ensure that benefit reaches everyone through genuine purchasing power, or allow it to be captured by those controlling the monetary system while humans are managed by surveillance AI justified by the system’s fragility.

The choice is ours: continue fighting against deflation through ever more desperate currency debasement and surveillance, creating nominal price increases that mask real wealth destruction while algorithmically managing populations, or embrace deflation for the prosperity it can bring under a sound monetary standard that preserves human agency.

Every efficiency gain should make us wealthier. Every automated task should free our time. Every cost reduced to near-zero should improve our lives. Under a Bitcoin standard, these truths can finally manifest without being stolen by inflation or surveillance extraction. The deflationary promise of AI can become a deflationary blessing, delivering the abundant future that technology has always offered but our monetary system has perpetually denied and doing so without requiring the surrender of human freedom.

In that sense, the real AI trade is not betting on which companies will profit from artificial intelligence, but choosing which system will mediate human existence in an AI-shaped world: one that monitors and manages, or one that enables and empowers.