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Bitcoin And Computational Thermodynamics.

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In a free market society, money is the most fundamental social tool which has allowed our species to scale and progress. However, it is also responsible for the socioeconomic problems that we face right now. It necessitates our disentangling from fiat forms of money and moving on to harnessing energy available on our planet to advance civilization.

From a thermodynamic perspective, the Entropy Equilibrium Hypothesis put forth by Aaron Segal establishes Bitcoin (BTC)’s superiority over fiat forms of money. The hypothesis proves that entropy always increases in fiat money. It is because of many factors, including their positive terminal inflation rate, which creates a constant monetary entropy above zero. It does not ensure a sustainable economy as it decreases the value of future money.

On the other hand, when money is denominated in Bitcoin, the monetary entropy is always absolutely zero. Bitcoin also creates an information asymmetry and uses chaotic processes like Crypto Mining and private key generation. This allows the structuring of highly disorganized information that, in turn, leads to a decrease in the informational entropy output. Bitcoin solves the problems created by fiat money by securely privatizing money creation.

Despite the varied criticisms of Bitcoin, the second law of thermodynamics that posits entropy supports the notion that Bitcoin maximizes technological productivity over fiat money. Bitcoin has the potential to have unprecedented socio-environmental and technological implications. To conclude, Bitcoin is here, and it will stay.

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