Title: Money as a Tool for Entropy Reduction and Novelty in Centralized and Decentralized Systems
[Me and GPT4, and Robert Breedlove's The Most Important Question in the World Today | Episode 1 | (WiM297)… but wait there’s more: Addendum argues for a Money 2.0 beyond the bitcoin’s scarcity]
Introduction:
This opinion paper posits that money has emerged as a primary tool for achieving entropy reduction. The Theory of Everything (TOE) by Thomas Campbell proposes that the driving force behind the universe is the reduction of entropy, which is associated with the evolution and growth of novelty, individualized consciousnesses. In this context, individuals, systems, and organizations aim to reduce their respective subjective entropy. Below will explore the ways in which money is used for the respective entropy reduction within centralized and decentralized systems, emphasizing the differences between the two approaches and the potential decrease in novelty under centralized systems and increase in novelty under decentralized systems … suggesting that such a transformation could benefit all participants, including former centralized interests. Also TL;DR: we will also argue for a new spendable form of money (in addendum) for a decentralized future, that the scarcity of bitcoin limits its use as daily money, and that unfortunately not all SoV, MoE, and UoE are equal.
What is entropy reduction process that lead to this mosquito’s foot:
Entropy Reduction, Novelty, and the Role of Money:
According to TOE, individualized consciousnesses seek to reduce entropy and increase novelty to foster growth and evolution. Money, as a powerful means of achieving this goal, acts as a store of value and a medium of exchange. It facilitates the acquisition of resources, experiences, and services that can help individuals and organizations reduce their subjective entropy and pursue their objectives. However, the ways in which money is used can differ significantly between centralized and decentralized systems.
The writer asserts that centralized entropy reduction has a tendency to devolve into zero novelty, whereas decentralized systems increase novelty. This perspective is supported by the observation that decentralized systems often display fractal patterns, Fibonacci sequences, and golden ratios, which are indicative of increasing novelty and complexity.
Centralized Systems:
In centralized systems, power and decision-making authority are concentrated in a small group of individuals or organizations. These systems often rely on top-down control and hierarchical structures, which can lead to inefficiencies and bureaucratic growth. Centralized systems may use money to maintain control, exert influence, and promote their interests, sometimes at the expense of others. As bureaucracy grows and resources are depleted, centralized systems may become unsustainable, eventually collapsing under their weight. Moreover, the focus on control and self-interest in centralized systems can hinder the generation of novelty and limit the overall growth and evolution of the system, potentially resulting in zero novelty.
Decentralized Systems:
On the other hand, decentralized systems distribute power and decision-making authority more broadly, promoting collaboration, innovation, and adaptability. In these systems, money is used to facilitate cooperation, empower individuals, and incentivize positive behavior. Decentralized systems prioritize the well-being of the collective and work towards reducing entropy through the pursuit of common goals. As a result, decentralized systems are more likely to foster the generation of novelty, enriching the collective experience and contributing to the overall growth and evolution of the system. The emergence of fractal patterns, Fibonacci sequences, and golden ratios in decentralized systems further highlights the potential for increasing novelty and complexity.
The Importance of Redefining Money and the Benefits of Increased Novelty:
As we move towards a more decentralized future, it is essential to redefine our understanding of money and its role in entropy reduction and novelty generation. The emergence of blockchain technology, decentralized finance, and digital currencies offers an opportunity to create a more equitable, transparent, and sustainable financial system. By reimagining the ways in which money is created, distributed, and used, we can promote the development of decentralized systems that prioritize collective well-being and long-term sustainability.
Increased novelty under decentralized systems has the potential to “lift all boats,” benefiting not only individuals and organizations within the decentralized system but also those previously entrenched in centralized structures. By embracing a decentralized future and fostering greater novelty, we can create a world that supports growth, evolution, and the pursuit of common goals for all participants.
In conclusion, this opinion paper asserts that money serves as a primary tool for (GPT4 ran out of …?)
Reference:
- Author’s older article April 2023: Replicating the FRB money and loan creation model and formula (Exploring the idea that bitcoin’s scarcity precludes it use as a common daily currency… and that we need to solve: the Money 2.0); another article which concludes that this Money 2.0 is not easily feasible, but let’s not let that stop us!
- Robert Breedlove. What is Money?
- Isaac Asimov. (1956). The Last Question. (Here people were inquiring about various AIs over the years about how to reduce entropy.)
Addendum: The Need for Spendable Money in a Decentralized System
As the world moves towards decentralization, the writer posits that the scarcity of Bitcoin, being the ultimate store of value, could lead to elitism and potentially (gulp) less novelty, tending towards centralization. This calls for the development of a new form of spendable money, more suitable for everyday use, which would complement Bitcoin’s role as a store of value while fostering a more decentralized and novel economic system.
The writer argues that spendable money must be the lowest common denominator for transferring economic value. This can be achieved through three sources: a) Freely received or gifted (ex. UBI), b) Earned from mundane routines, and c) Earned from active intentional efforts. Spendable money should be modeled on the fiat money-lending creation model, as this has been “perfected” by the centralized banking system, which encourages spending and allows for various forms of store of value.
The writer posits that money value is created by human energy expenditure, which consists of two types: creative spirit energy (associated with decentralized entropy reduction) and labor (associated with centralized entropy reduction). By tapping into these two sources of human energy, a new form of spendable money can be developed to function seamlessly within the decentralized ecosystem.
To create such spendable money, the writer suggests starting by using substantially the same processes of the traditional centralized financial system but changing the denomination from centralized to decentralized. This would involve reimagining the existing processes to benefit the decentralized system instead of the centralized one. By doing so, the new form of money 2.0 would promote decentralization, increased novelty, and equitable wealth distribution, harnessing the network effect from the aforementioned sources of spendable money and the economic system. Let’s do this!
TOL, the design… (work in progress)
How to design such coin…What is the key utility? That it spendable and replenished based on the above: a) Freely received or gifted (ex. UBI), b) Earned from mundane routines, and c) Earned from active intentional efforts. (Well, this category can expand, e.g. we can add: d) Earned from investing… e) Tbd… )
And the overall supply is based on the above, plus “tracking” (or equal, opr pegged…) to the local or preferred or subject Unit of account whichever it may be…
Or, to find the wellspring of the supply, do we draw from the reduction of entropy (the spendable money?) in the system or the environment (is that what bitcoin is doing?) and by increasing novelty in the system and its utility…?
If suggestions, please advise.
