Bitcoin Magazine

AI’s Bitcoin Moment: Why the Open-Source Fight Looks Like Crypto Back in 2014

A new installment of Chain of Thought, the Brownstone Research newsletter written by Ben Lilly, argues that the battle over open-source artificial intelligence is following the same path Bitcoin walked a decade ago, and that investors who recognize the pattern stand to profit.

The note opens with testimony that Anthropic CEO Dario Amodei gave to Congress in July 2023. Amodei acknowledged that open source is “a good thing” in most scientific fields and that the risks of open models released so far were “relatively limited,” but he warned that the scaling of open-source models was heading “down a very dangerous path.” 

Lilly reads the subtext plainly: if open models are dangerous, then the closed models sold by companies like Anthropic are the safe choice — and the policy that follows is to restrict the open and elevate the closed.

Bitcoin’s early skeptics mirror what AI is facing

That framing is one digital-asset investors know well. 

He revisits Bitcoin’s early skeptics, from Rep. Jared Polis buying the first Bitcoin on Capitol Hill in 2014 to Sen. Joe Manchin’s call to ban a “dangerous currency,” through the 2023 accusations that regulators tried to cut crypto off from the banking system in what critics dubbed “Operation Choke Point 2.0.” 

The industry survived, he notes, and Washington is now moving toward clearer rules through the passed GENIUS Act and the pending CLARITY Act.

Decentralized AI, which Lilly calls “DeAI,” is having that same fight now. He points to recent developments as evidence the walls are going up: a U.S. export ban on Anthropic’s latest release, which he says will push the company toward permissioned access that verifies a user’s identity before granting a model, and OpenAI’s decision to restrict its GPT-5.6 rollout to trusted partners. 

He expects identity requirements to spread. “It’s for your protection, you see,” he writes. “It always is.”

The note leans on a national-security anecdote to explain the fear driving these moves. Lilly cites NSA chief Joshua Rudd, by way of Sen. Mark Warner, describing how Anthropic’s “Mythos” model broke into “almost all of our classified system, not in weeks, but in hours.”

Yet open source is closing the gap, according to the piece. Lilly says the recent GLM-5.2 scored on par with Anthropic’s Sonnet 4.6 from February, leaving open models roughly three to four months behind the frontier, and predicts an open rival to Mythos and GPT-5.6 by fall. 

He argues the bigger unlock is decentralized training on peer-to-peer networks that mirror Bitcoin and Ethereum — swapping compute-for-network-security for compute-for-model-training. Distributed training, he notes, has grown from sub-1-billion parameters to 100 billion in two years.

He names three early projects — Dark Bloom, which enables low-cost private inference on idle Macs; c0mpute, a decentralized inference network; and Pluralis, which trains AI across distributed consumer GPUs — and expects more to launch tokens and reward users for contributing compute.

The note ends with the notion that governments will try to ban open models and they will fail. For him, investing in the space “will be like buying Bitcoin in 2014, back when it was still ‘dangerous.'”

This post AI’s Bitcoin Moment: Why the Open-Source Fight Looks Like Crypto Back in 2014 first appeared on Bitcoin Magazine and is written by Micah Zimmerman.

Bitcoin Magazine

SEC’s Peirce Sees Clarity Act Passing This Summer as Crypto Rules Take Shape

America’s top securities regulators marked the nation’s 250th anniversary with a common theme: open markets, broader investor access, and a clear legal framework for digital assets.

SEC Commissioner Hester Peirce, in an interview on the Searching for Mana podcast, said she expects the Clarity Act to pass this summer. The bill has cleared the House and awaits Senate action. Peirce, a veteran of the Senate Banking Committee during the financial crisis, called it a large piece of legislation with many moving parts, and she praised the work of members in both chambers.

The Clarity Act would divide oversight of crypto between the SEC and the Commodity Futures Trading Commission and build a federal structure for spot markets, a structure that does not exist at present. 

Peirce said the framework would clarify the application of the Howey Test — the standard for when a token counts as part of an investment contract — and would shield developers from liability when others misuse their tools.

Peirce argued that past enforcement pushed the industry onto a poor path. The old approach, she said, rewarded builders of throwaway projects and made honest actors hard to tell apart from fraudsters. Her hope for the current window is a shift toward products that meet real human needs.

“This is a rare window where you have a lot of regulatory goodwill,” Pierce said. “Use that to build things that last, things that matter.”

She tied the technology’s promise to the transfer of value across networks, the removal of costly intermediaries, and the use of smart contracts to automate back-office work. 

Tokenized securities, she said, could improve collateral mobility, ease securities lending, and let issuers reach shareholders through their wallets. She also linked crypto to artificial intelligence, and predicted that AI agents will transact with crypto assets.

On AI regulation, Peirce favored a hands-off stance: allow experimentation, and address harms as they surface rather than shape the technology from the start. She noted that a firm’s use of AI does not excuse the firm from responsibility for the outcome.

Peirce, whose term nears its end, will leave the agency for a law school teaching post. She flagged a rise in scams and a gap in financial education as her chief concerns, and urged investors toward skepticism.

SEC Chair Paul Atkins chimes in

The SEC’s chairman, Paul Atkins, struck similar notes in a Fox News interview with Larry Kudlow after an address to the Economic Club of New York. 

Atkins cast himself as an advocate of free-market capitalism and pointed to a series of reforms aimed at drawing more Americans into public markets and easing the path to an IPO.

“America was an investment before it was a nation,” Atkins said.

Atkins highlighted the Trump Accounts, set to launch on July 4th, as an expression of American capitalism and long-term saving. He said about 6 million children have enrolled, and that children born in the next two years will receive a $1,000 deposit, with room for matches from employers, parents, and friends. 

The accounts, he said, function as a version of a traditional IRA and give a stake in the market to children who might lack exposure to it at home.

“America was an investment before it was a nation,” Atkins told Kudlow, citing the European companies that financed voyages across the Atlantic, including the settlement that became New York.

On crypto, Atkins said the president had challenged the agency to make the United States the crypto capital of the world. He faulted the prior administration for treating digital assets as suspect by nature, and pledged a reversal that would bring innovators who left the country back to build under American law, for American investors, who could judge the products for themselves.

Both officials framed their agenda against the backdrop of the July 4th holiday and the anniversary of the founding. Peirce called the market system a powerful force for social good and a check on capital allocation by the government. 

Atkins offered a shorter version of the same creed: free-market capitalism, in his words, will win.

This post SEC’s Peirce Sees Clarity Act Passing This Summer as Crypto Rules Take Shape first appeared on Bitcoin Magazine and is written by Micah Zimmerman.