[Recommend my two-volume book for more reading]: BIT & COIN: Merging Digitality and Physicality
“I’ve gone around and around with techies on elections for 2-decades. I’ve found most simply want to focus on the machines, and refuse to accept the reality that these are mostly human systems and will remain so.” — Steven Hertzberg on corruption in elections.
That’s an extremely important point. The detachment problem identified in the above statement is a root cause of the failure of many systems, beyond elections.
Communism, for example, is based on promoting a “fairest and purest” ideal on paper but hiding the human reality.
Communism, however, is worse than a failure. It is evil, because it does the “hiding” part deliberately rather than merely out of ignorance.
The Bitcoin Core (BTC, not the genuine Bitcoin of Satoshi) is another example. So are most other cryptos.
BTC is an election system.
BTC is fundamentally an election system. Further, BTC as an election system is corrupt and self-contradictory, like communism.
The promotion of BTC has followed the exact book of communism:
- proclaim an idea that is publicly anti-corruption,
- hide the human control by a small group of people who are not only corruptible but are corrupt in fact, and
- sell it to the masses by appealing (leveraging, really) people’s sinful nature: covetousness and greed.
Like all election systems, BTC has a frontend that is subjective, up to people’s understanding, desire, and decision. BTC also has a backend that is objective, based on ground truth. But as an economic election system, rather than a political one, BTC is also different. The difference is that the ground truth of a political election system is people’s qualifications and real political intent itself, while the ground truth of BTC is the underlying economy, which is far more objective.
For such a system to be stable, it must not have inherent contradictions between its frontend and backend. If it does, it is unstable due to its inherent self-contradictory nature.
People wake up when they realize they have been fooled.
However, BTC can be more “robust” than a usual inconsistent system because it does not merely rely on people’s ignorance, but also relies on people being hooked on their own selfish interests. Entrenchment by self-interest is much harder to overcome than deception through ignorance.
Nevertheless, BTC cannot have its backend detached from economic reality. The economic reality is both objective and unforgiving.
Cybernetic Analysis
According to cybernetics, a system collapses due to its inherent contradictions.
The following are the inherent reasons a system might collapse, grounded in cybernetic principles:
1. Failure of feedback Mechanisms: Systems rely on feedback loops (positive and negative) to self-regulate. Without negative feedback that stabilizes by counteracting errors, small disturbances can escalate, leading to collapse when the conditions are ripe.
Applied to BTC: See The Idea of “Digital Gold” — BTC’s Value Fundamentals, for an explanation of why gold has a fundamental and natural negative feedback to prevent collapse, while BTC does not have any.
2. Lack of Requisite Variety: Ashby’s Law of Requisite Variety states that a system must have sufficient internal complexity to handle external disturbances. If a system lacks the variety (options, responses, or adaptability) to match environmental changes, it becomes overwhelmed and fails.
Applied to BTC: Without scalability, BTC does not have the requisite variety for real economic growth. Everything relies on the mental power of the Ponzi scheme participants. See Is Bitcoin (BTC) a Ponzi Scheme? The Cancerous Crypto, Stock Market Amplified Ponzi Schemes (SMAPs), One blockchain as the base layer of IoV.
3. Resource Depletion: Systems require resources (energy, information, or materials) to function. Overloading a system beyond its capacity or depleting its resources disrupts its ability to maintain homeostasis, leading to breakdown.
Applied to BTC: With a blockchain system like BTC, the critical resource is what is necessary to sustain mining, which ultimately draws “energy” from economic gains (revenue) of the nodes doing mining and processing transactions. Due to the limited block size, the BTC does not have the potential for the nodes to shift to sustainable transaction revenue (see The Economics of Bitcoin Mining). As a result, the economic resource of BTC will ultimately deplete. It is beyond the reach and control of Ponzi psychology.
4. Entropy and Disorder: Over time, systems naturally tend toward entropy (disorder) unless actively sustained. Without sufficient energy or effort to counteract entropy, the system degrades and collapses.
Applied to BTC: Again, without unbounded scalability of real economic activities, BTC is ultimately a closed system and will suffer the death of entropic disorder. See High-entropy system versus low-entropy system)
5. Subsystem Misalignment: Complex systems comprise interconnected subsystems. If these subsystems pursue conflicting goals, the overall system can destabilize.
Applied to BTC: Even individuals like Michael Saylor, who has manifested unimaginable imaginations and unattainable reality-distorting abilities, cannot argue that the goals of participants like BlackRock in BTC are not diametrically opposed to not only that of the original vision of Satoshi, but also that of the professing BTC Core. Nor can they argue that the interest of decentralized BTC banks – the whales – is aligned with the core of the economies in the world. On the contrary, they advocate the collapse of the world economy with no prospect of a better replacement. They just want people to fix their vain hopes on holding the coins.
Coins are nice, except that they are not when their substance and foundation are based on a system that contradicts economic reality and is bound to collapse under the pressure of reality.
[Recommend my two-volume book for more reading]: BIT & COIN: Merging Digitality and Physicality
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