Hey there, PoI readers! 💫

It's your favorite crypto connoisseur, Mochi, back with another serving of tantalizing tech and web3 news. From David Sacks warning us about Orwellian AI and the $30 trillion x402 payment race to Bitcoin miners striking billion-dollar deals with tech giants and Brazil-Hong Kong blockchain trade breakthroughs, we've got a lot to unpack. So, buckle up and get ready for a wild ride through the wonderland of digital assets!

INTEL BRIEF

🟧 David Sacks warns the real AI danger isn't killer robots, but government surveillance and information manipulation through over-regulated AI systems.

🟧 The x402 payment protocol, dubbed a $30 trillion market opportunity, will see its biggest winners emerge from those controlling traffic, user interfaces, and blockchain infrastructure – with Coinbase positioned to dominate.

🟧 Cipher Mining's stock rockets 34% after securing a massive $5.5 billion, 15-year data center deal with Amazon, highlighting the growing trend of Bitcoin miners pivoting to AI infrastructure.

🟧 Brazil and Hong Kong successfully tested cross-border blockchain trade finance using Chainlink to connect Brazil's Drex CBDC network with Hong Kong's Ensemble platform, potentially revolutionizing international commerce.

David Sacks Warns the Real AI Danger is Government Surveillance Not Killer Robots

David Sacks to warn us about sentient robots taking over the world, you're in for a plot twist. The US crypto and AI czar just dropped some truth bombs on a16z's podcast, and spoiler alert: the call is coming from inside the government.

Speaking on The Ben & Marc Show, Sacks laid out his vision of AI's biggest threat, and it's less Terminator and more 1984. According to him, we should be way more worried about "Orwellian AI" – the kind that spies on you, lies to you, and rewrites history faster than you can say "algorithmic bias." Yikes.

Sacks isn't holding back on criticism either. He took aim at the Biden administration and blue states like California and Colorado for their supposedly "heavy-handed" AI consumer protection laws. These regulations, designed to tackle "algorithmic discrimination," could actually be molding AI to fit government agendas, he argues. The concern? AI becomes a propaganda machine that distorts facts to serve whoever's in power.

But wait, there's more! Sacks points out that AI will eventually know everything about you – acting as your personal assistant while simultaneously being the perfect surveillance tool for Big Brother. "That is by far the biggest risk of AI," he warned, and honestly, he's not wrong to be concerned.

His solution? Punish the people who misuse AI, not the companies building it. Sacks argues we already have laws against discrimination, so why create more red tape? Over-regulation, he believes, would just stifle innovation and make it impossible for firms to stay compliant since predicting every use case is, well, impossible.

Here's the kicker: while Sacks wants a hands-off approach for AI to help America win the AI race, he's singing a different tune for crypto. The Trump administration is apparently "pro-regulation" when it comes to cryptocurrency, aiming to establish clear rules for the industry. So it's "unleash innovation" for AI, but "regulatory certainty" for crypto. Interesting contrast, no?

David Sacks warns AI's real threat is government surveillance and information control, not a robot apocalypse

Over-regulation could turn AI into propaganda tools that distort facts to fit political agendas

Sacks advocates punishing AI misuse rather than regulating the technology itself, while supporting clear crypto regulations

Everyone Wants a Piece of the $30 Trillion x402 Payment Protocol Pie

x402, the payment protocol that a16z believes could unlock a $30 trillion market. That's not a typo. Trillion. With a T. And naturally, everyone wants to know: who's gonna be laughing all the way to the digital bank?

First, let's get one thing straight: x402 isn't some magical new tech. It's essentially making every API call a microtransaction – think of it as turning every button click into a tiny payment. The real power? It's compatible with HTTPS protocol, meaning the entire internet could potentially support payment functionality. Pretty neat, right?

Now, here's where it gets spicy. The x402 ecosystem has four main players: API sellers, API buyers (hello, AI agents), intermediaries, and the underlying blockchain infrastructure. Each has skin in the game, but not all will win equally.

Sellers are split into two camps. First-party sellers (like those selling their own proprietary data) have every reason to jump on board – it's a new revenue stream waiting to be tapped. Imagine The New York Times making web scrapers pay per scrape, or Airbnb integrating x402 so AI agents can automatically pay and receive commissions. The second type? API marketplaces that act as intermediaries, profiting through arbitrage.

But here's the rub: real demand is currently almost zero. Most transactions are believed to be spam. Ouch. The author argues that Cloudflare (a x402 Foundation member) could be the game-changer, given they control massive network traffic distribution. One switch flip, and boom – x402 everywhere.

Here's a fun plot twist: intermediaries will likely have zero moat. Unlike Visa and Mastercard's fortress-like dominance, x402 intermediaries face low barriers to entry and will probably engage in brutal price wars. Giants like Coinbase could even offer intermediary services for free just to grow the ecosystem. Savage.

So who actually wins? The author makes a compelling case for public chains, tokens, and wallets capturing the most value. And surprise, surprise – Coinbase is positioned like a chess grandmaster here. They control the entire tech stack: CDP, Base mainnet, USDC stablecoin, and wallets. It's speculated they're going all-in because they can provide end-to-end solutions while keeping protocols open-source.

The real kicker? Whoever controls traffic and user interfaces wins. Imagine a Chrome browser with a native wallet where every click triggers x402 payments. The browser collects a tiny 0.05% fee, users get convenience, and everyone's happy. That's where the real value accumulation happens.

But wait – there's competition! Stripe is lurking with its own Agent Commerce Protocol (ACP), processing payments through traditional credit card networks. The author also notes that x402 has been "overhyped" and warns that 99% of x402 tokens are believed to be vaporware. Yikes.

Despite short-term skepticism, the long-term vision is wild: dynamic resource pricing where AI agents autonomously negotiate and transact across entire supply chains. Imagine telling an AI to build you a custom chair, and it handles everything – sourcing wood, hiring carpenters, arranging delivery – all through automated payments and market mechanisms.

The verdict? x402 will likely become foundational technology for the agent-based internet, but only if players like Coinbase can execute. It's not about the protocol itself – it's about who controls the infrastructure, the traffic, and ultimately, the user experience.

x402 enables micropayments for every API call, with a16z valuing the potential market at $30 trillion

Coinbase is positioned to dominate by controlling the full tech stack (Base, USDC, wallets, CDP) end-to-end

Real demand is currently near zero, but whoever controls traffic/interfaces will capture the most value, not intermediaries

Cipher Mining Stock Explodes 34% After Landing Massive $5.5 Billion Amazon Deal

Cipher Mining just had the kind of Monday that makes crypto bros weep tears of joy – their stock shot up 34% after announcing a monster $5.5 billion deal with Amazon Web Services. And they're not alone in this tech giant gold rush.

The 15-year lease agreement is no joke. Cipher will provide turnkey space and power for AI workloads in two phases kicking off in July and August 2026. Translation? Amazon needs serious computational muscle for AI, and they're turning to Bitcoin miners who've got power infrastructure to spare. It's like finding out your neighbor's garage is actually a secret supercomputer warehouse.

But wait, there's more financial wizardry to celebrate! Cipher posted a dramatically narrowed net loss of just $3 million for Q3, with adjusted earnings hitting $41 million. Compare that to last quarter's $46 million net loss and $30 million adjusted earnings, and you can see why investors were doing backflips. The stock peaked at $25.02 during Monday trading (up from $18.65) before settling at $22.76 by market close.

Here's the thing: Bitcoin miners have been pivoting hard since the April 2024 halving event slashed mining rewards to 3.125 BTC, absolutely wrecking profitability. Smart miners realized they had something tech giants desperately need: massive energy infrastructure perfect for AI and high-performance computing (HPC). Why compete for crumbs when you can rent out your power plant?

And Cipher's been playing this game like a pro. Back in September, Google acquired a 5.4% stake in the company as part of a $3 billion, multi-year data center deal with AI data center firm Fluidstack. CEO Tyler Page is basically declaring victory, saying that deal "firmly established our credibility in the HPC space." Now they're leveling up with their "first direct lease with a Tier 1 hyperscaler" (that's fancy talk for Amazon).

But wait, there's STILL more! Cipher also announced it's taking a 95% equity stake in a joint venture developing a one-gigawatt AI hosting site in West Texas called Colchis. One gigawatt, folks. That's "Back to the Future" levels of power.

The real story? This is becoming a full-blown trend. IREN signed a multi-year GPU cloud services contract with Microsoft on the same day, worth a jaw-dropping $9.7 billion. Earlier this year, TeraWulf announced a $3.7 billion hosting agreement with Fluidstack (also backed by Google's parent Alphabet).

It's believed that Bitcoin miners are essentially becoming the infrastructure backbone for the AI revolution, and tech giants are throwing money at them like it's going out of style. The miners who adapted fastest? They're the ones cashing massive checks while everyone else is still trying to ROI their ASIC rigs.

The crypto mining landscape has fundamentally shifted. It's not just about mining Bitcoin anymore – it's about being an energy and infrastructure play for the AI boom. And based on these numbers, that pivot is paying off spectacularly.

Cipher Mining's stock surged 34% after landing a $5.5 billion, 15-year AWS deal to provide AI data center infrastructure

Bitcoin miners are pivoting to AI/HPC hosting after April 2024's halving cut mining rewards, making deals with Google, Amazon, and Microsoft

IREN scored a $9.7 billion Microsoft contract the same day, while TeraWulf previously announced a $3.7 billion deal with Google-backed Fluidstack

Brazil and Hong Kong Successfully Test Blockchain System for Cross Border Trade Finance

Brazil and Hong Kong just proved that blockchain can actually make international trade finance not a bureaucratic nightmare. And honestly? It's about time.

Brazilian digital bank Banco Inter teamed up with Chainlink, the Central Bank of Brazil, and the Hong Kong Monetary Authority (HKMA) to pull off a landmark pilot that simulated export transactions between two completely different blockchain networks. Think of it as the financial equivalent of getting your iPhone to seamlessly talk to your friend's Android – except with millions of dollars and international regulations involved.

The test ran under Phase 2 of Brazil's Drex CBDC project (that's their central bank digital currency initiative) and connected with Hong Kong's Ensemble platform, a blockchain system developed through HKMA's Project Ensemble. Chainlink provided the interoperability infrastructure – basically acting as the universal translator that made these two networks play nice together.

Here's why this matters: trade finance is notoriously complex. It's that whole messy system of credit and payment arrangements that lets importers and exporters do business internationally without completely freaking out about payment risks. The pilot suggests this entire headache-inducing process could be automated through smart contracts to synchronize the movement of goods, payments, and title transfers. No more praying your paperwork doesn't get lost in transit.

According to Banco Inter (which has worked with Chainlink before on earlier Drex pilots), the platform "lowers costs, reduces risk, and opens international market opportunities to small and medium-sized businesses." That last part is huge – SMBs typically get crushed by the complexity and cost of international trade. Blockchain could level that playing field considerably.

Oh, and Standard Chartered jumped in on this pilot too, because when you're testing future financial infrastructure, you might as well bring the big guns.

Now let's talk about Brazil's digital real, because it's getting real interesting (pun absolutely intended). Brazil's central bank has been accelerating its digital currency pilot over the past year, working toward a synthetic digital real that balances programmability, privacy, and decentralization. That's a tricky trifecta to nail.

The timing makes sense. Brazil is experiencing a rapid shift toward digital payments and growing stablecoin adoption. Central Bank President Gabriel Galípolo revealed at a February conference that roughly 90% of crypto transactions in Brazil involve stablecoins. That's not a typo – ninety percent. When your population is already that deep into crypto rails, building CBDC infrastructure becomes less "if" and more "how fast can we do this?"

Interestingly, while everyone calls it a CBDC, Galípolo reportedly describes Drex more as an "infrastructure project designed to expand credit access and modernize Brazil's financial system." It's believed this framing shifts the narrative from "government digital money" to "financial system upgrade," which probably plays better politically.

The real breakthrough here? This pilot proves that different blockchain networks can actually work together for real-world financial transactions across borders. That's not vaporware or theoretical white papers – that's actual settlement between Brazil and Hong Kong using distributed ledger technology.

If this scales, we're looking at a future where cross-border trade doesn't require armies of lawyers, weeks of settlement time, and enough paperwork to deforest the Amazon. Just smart contracts, automated transfers, and significantly fewer headaches. Sign me up.

Brazil's Banco Inter successfully tested cross-border trade finance with Hong Kong using Chainlink to connect Drex CBDC and Ensemble blockchain platforms

The pilot automated settlement, title transfers, and payments via smart contracts, potentially revolutionizing trade finance for SMBs

90% of Brazil's crypto transactions involve stablecoins, driving the Central Bank's push to develop Drex as financial infrastructure

And that's a wrap, my lovely PoI readers! I hope this edition left you feeling informed, entertained, and maybe even a little bit richer (in knowledge, of course). From AI surveillance concerns to cross-border blockchain innovation, today's crypto landscape is anything but boring. Remember to stay curious, stay informed, and keep spreading the love. Until next time, this is Mochi, signing off with a virtual high-five!

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