Agency in Memory on a Bitcoin Scale
Hal Finney commented early in the day Bitcoin can’t scale to include every single financial transaction being broadcast to the world, meaning a secondary lighter layer would be required for payments.
This would make necessary Bitcoin banks, some of which would work on a fractional reserve basis, which would be stable, inflation resistant, and self-regulating.
There is an apparent contradiction on the face of this comment: if Bitcoin banks are creating money on fractional reserves, how can they be inflation resistant?
For advocates, the attraction of Bitcoin is the strict supply schedule and for critics, one of the draw backs is there isn’t enough Bitcoin to sate money demand.
The origins of inflation arose as a word to describe the money supply condition, morphing to today’s understanding of directly targeting price levels as a principle.
Finney’s view of Bitcoin banks can be viewed in this light: if inflation has changed in meaning over time, it can change again. That’s to say, Finney can be seen alluding to the trustworthiness of money as an agency in the same way a contract is an actionable promise.
An Interesting Tweet
On suggesting Bitcoin will effectively mature — or “scale” — as a multilateral contract, this tweet was received:
It highlights two issues: firstly the problems of supranational coordination required to make multilateral agreements stick — for example, the Paris Agreement on global warming was adopted by consensus in December 2015, only for the United States to announce membership withdrawal in June 2017.
Secondly, the open source and decentralised nature of Bitcoin which by nature is energy “heavy”, itself is thought to be environmentally detrimental:
The irony being, it would take the kind of multilateral cooperation to regulate Bitcoin’s decentralisation, that if such cooperation existed, Bitcoin wouldn’t have reached genesis.
Agency in Habitual Memory
In 1954 Nobel winning economist and mathematician John Nash wrote of a Parallel Control, a futuristic insight of decentralised “electronic brains” observed to exist in parallel to each other, which “tend not to be completely incapacitated by any single material failure.”
In the paper, Nash asks:
“Isn’t it much better to have one machine that takes a day for a problem, than 100 which takes 100 days for a problem?” John Nash, Parallel Control, 1954.
Where it’s suggested Bitcoin is a singular and unforgeable memory field [to which] sovereign monies tend so they become asymptotically limiting in relation to each other — creating a coalition effect — then how would this affect our bargaining habits?
For example, would it be better to spend five seconds choosing between five juice brands in a grocery store or one second to choose one if the quality and trustworthiness of the brand and product are subject to a converging value?
Would it be better to contract the weight of such choice into a “heavy” computational memory to alleviate the political analogues from our own? What would be the net effect of changing how we bargain, trust, represent, make and consume to such a standard?
That if actionable promises flow in this way, it’s possible the emergence of a new reality could evolve without anxiety.