Writing over the Social Media Influence: Bitcoin, Nietzsche, and Nash.
German philosopher Friedrich Nietzsche (1844–1900) and American mathematician John Forbes Nash Jr (1928–2015) are sometimes related to Bitcoin (b. 2009) creator Satoshi Nakamoto (real identity unknown) by their combined quintessential ability to dumbfound an audience with complexity and impossibilities.
These problems seem to amplify the more detailed the analysis becomes, to the extent it’s perhaps better to try and make connections and similarities on a broader basis.
Preludes to a Philosophy of the Future
In Beyond Good and Evil, Nietzsche writes that good is not the opposite of evil, rather they are differing expressions of the same basic impulses — only that evil is more direct.
In Ideal Money and Asymptotically Ideal Money, Nash writes of Gresham’s law, a monetary principle where “bad money drives out good” — so in the scenario of two commodity monies with similar face value in circulation, the more valuable commodity will gradually disappear [from circulation].
Where Nietzsche, Nash and Nakamoto conflate is in their questioning of presuppositions that give rise to pre-existing and existing frameworks by which we conventionally conceive and receive knowledge.
In this, Nietzsche denied a universal morality and instead offered the “will to power” in explaining human behaviour — of a primordial desire to create, procreate and recreate without need for reason or tradition.
Nash, too, took these polarising themes [of good and bad] along unusual lines: he applied mathematical proof in pioneering work to show the dynamics of human behaviour in non-cooperative and cooperative states in comparison to winner take all games.
It was in 2008 — around the time Nash was promoting Ideal Money — [Nash] produced experimental work on computationally discovering evolutionary stable behaviour between agents in the formation of coalitions: something Bitcoin’s proof of work is thought to satisfy through a decentralised adjustment algorithm, working on a best effort basis (open source).
Nakamoto’s Bitcoin white paper (also published in 2008) then talks of transactions without need for trusted third parties in games of “chains” competing for honesty which are measured in hashes.
A Thoroughly Modern Malady
Nietzsche — so the story goes — was left prostrate in his room for two days in 1889, after witnessing the cruel suffering of a horse. During the final decade of his life it’s believed Nietzsche sunk into a crisis of dementia because he saw the horse as a mirror to his own existential dilemmas.
Nash also suffered from well documented problems of this nature, but unlike Nietzsche, recovered — receiving a Nobel prize in experimental economics for his earlier work in game theory — and on his bouts of madness, Nash reflected he had to take the delusions seriously because they came from the same place as his math, to the extent he didn’t accept himself as mad — rather he was thinking unorthodoxly. Interestingly, computing appears to have helped Nash on his return to reality.
Paradoxically, however, insanity now seems to have become de rigueur.
The Inflation Quandary
In a historical context, inflation targeting is the opposite of controlling the money supply: instead of a gold or exchange rate peg, which Central Banks think affect price inflation, they target price inflation directly.
The Central Banks like inflation targeting because it’s a principle, rather than a strict rule, which enables more policy instruments than just controlling [the] money supply. The inflation analogue, however, is Central Banks recognise [inflation] is difficult to measure precisely, so targeting can’t be precise either.
To this light, Nash — while speaking on Ideal Money — said he would like economists to practice things good for all time, and of unquestionable scientific value, observing that macroeconomics work in paradigms.
In response, Nash’s ICPI (a consideration in Ideal Money) is unpopular with the mainstream because it implies a peg, considered unrealistic and unnecessary as it would require supranational fiscal policy.
Language is not Static
Bitcoin as an extension of Nash’s work on Ideal Money and as an evolution of his ICPI — as a miracle energy source (hashes) rather than as an analogue of commodity components — is also rejected by the mainstream: they find it difficult to see how Bitcoin is connected to other markets, as it appears to exist in its own private sphere without obvious purpose.
Indeed, Nash did say it’s possible to control inflation by controlling the money supply, which is complete anathema to the current mode [of targeting].
What is not so clear however is what is meant by inflation in a singular sense? Especially where a miracle energy source takes a digital format, as it appears to have with Bitcoin — where a decentralised memory is potentially capable on a global commercial footing — of virtual supranational coordination by creating a asymptotically stable coalition of monies — a peer to peer cash system — that re-orientates inflation into the growth paradigm targeting struggles to realise.
That in a digital world of intangibles, a principle can give way to brute force logic and away from the onerous responsibilities analogue trends place on our minds, where it seems bad influencers force out the good— that Bitcoin isn’t about decentralisation, rather it has just enough decentralisation to make it work. That inflation isn’t an explicit form of theft; rather Bitcoin can be an implicit preference to create it.
And just as Nietzsche alluded, the language can become an objective of its own where there is a “will to power” acting on it.
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