The Economics of AGI: Why Verification Is the New Scarcity w/ Christian Catalini

**Ryan Sean Adams** (0:02)
Welcome to Bankless, where today we explore the frontier of AI. Is it going to take our job, and how can we survive the transformation? This is Ryan Sean Adams. I'm here with David Hoffman, and we're here to help you become more Bankless. David and I read a paper and a thread corresponding to that paper. It's called The Simple Economics of AGI. And one of the writers of that paper is on the podcast today. His name is Christian Catalini. He's an economist. He is an MIT scientist. Fun fact, David, he was actually one of the creators of the original Diem project over at Facebook. Do you remember that?

**David Hoffman** (0:36)
Oh, wow.
I did not know that. We just interviewed him.

**Ryan Sean Adams** (0:40)
He's been in cryptocurrency for over a decade. In fact, about 10 years ago, he wrote a paper called The Simple Economics of the Blockchain. So he was all over crypto when it was new. And now he's coming back to AI talking about economics yet again.

**David Hoffman** (0:55)
Yeah, he seems a little bit like a Robin Hansen type of he's putting models on to cultural phenomena and trying to provide answers to him. Mainly the knowledge that we tried to get out of him is if AI is going to commoditize a lot of easy tasks, where does the value go? If we're just automating the foundations of like the push button jobs of society.

**Ryan Sean Adams** (1:21)
What do we do?

**David Hoffman** (1:22)
Where do people go next? And that's basically the theme of the episode and the question that Christian answers in the pod.

**Ryan Sean Adams** (1:28)
Really important episode. I think it's on everyone's mind. The core argument of this paper is that the scarce resource is no longer intelligence, the things between our ears, our brains. It's verification and the human capacity to check on AI and its output. There's a lot of implications following from that idea. So let's get right to the episode. But before we do, I want to thank the sponsors that made this possible.

**David Hoffman** (1:50)
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**Ryan Sean Adams** (2:54)
Some exciting news. We are launching a new podcast to help people figure out the crypto cycle, how to navigate it. The best crypto cycle investor I know, his name is Michael Nadeau. He runs the DeFi Report. This is the guy that sent me a cell alert before the 1010 price drop happened. His cycle analysis has been absolutely on point. I've been following him for years. And this year, we started recording weekly podcast episodes. Each one, we get into his portfolio, what he's holding, the market structure, their entry targets, fair market value of Bitcoin and Ether, and where we are in the cycle. There's new episodes that are released every Wednesday. They're 30 minutes, they're short, they're punchy. I think this crypto cycle is harder to navigate than most. So let's do it together. Go subscribe to this podcast. Search the DeFi Report wherever you get your podcasts, YouTube, Apple, Spotify, or find a link in the show notes. There's a new episode waiting for you now. Christian, I think a lot of people listening feel the way maybe I feel maybe the way David feels, which is like some kind of a low-grade panic. There's an underlying uncertainty.

**David Hoffman** (3:52)
Basal anxiety.

**Ryan Sean Adams** (3:54)
Yeah, basal level of anxiety. And it's funny because David and I are techno optimists. Like we're very excited about the future, and yet even I feel it. And I think it's born of this feeling that AI is going to change everything. It's going to automate a lot of things. Maybe there's some anxiety that it's going to be us, that we won't adapt soon enough. There was a Cetrine Research Post that made the rounds three weeks ago or so. And it was a basic idea of, it was like a hollow economy, that AI would be so bullish and so successful that no one had jobs anymore. This type of doomer porn has product market fit, and it's easy to see why. It's because this low grade anxiety is pretty pervasive. Why do you think people are worried about AI, and are they justified to be uncertain and worried in this way?