## Wednesday, December 27, 2017

### Using difficulty to get constant-value dev fees

I posted this to bitcoin-ml and bitcoin-dev mailists and to reddit and bitcointalk, but no one seems interested.
========
Has anyone used difficulty to get constant-dollar developer or node
fees? Difficulty is exactly proportional to network hashrate, and
network hashrate is closely proportional to coin price.

Say a coin is currently \$1.23 and someone wants to get a fixed income
from the coin like \$0.01 each time something occurs. To achieve this
they could use a constant that is multiplied by the difficulty:

fee = 0.0123 * difficulty_at_\$1.23_per_coin / current_difficulty / reward_per_block_at_\$1.23 * current_reward_per_block

Dollar value here is constant-value relative to when the ratio was
determined (when difficulty was at \$1.23). If hash power is not able
to keep up with coin price (which is a temporary effect), the value
would be larger than expected. Otherwise, the real-world value slowly
decreases as hashing efficiency increases, which may be a desired
effect if it is for dev fees because software gets outdated. But
Moore's law has gotten very slow for computers. Hashing should get
closer to being a constant hardware cost per hash.

Also, electricity is more than half the current cost of hashing and
could soon be 3/4 or more of the cost. Worldwide electricity cost is
very stable and possibly the best single-commodity measure of constant
value.

Also, all coins for a given POW (if not in an even more general sense) will have the same factor above, adjusted only by multiplying by 2^(x-y) where x is the number of leading zeros in maxTarget for the other coin, and y is the number in the coin above.

## Tuesday, November 21, 2017

### Best difficulty algorithm

I'm changing this as I find improvements. Last change: 12/1/2017.

https://github.com/zawy12/difficulty-algorithms/issues/1

This first one appears to be the best all around:
```# Jacob Eliosoff's EMA (exponential moving average)
# https://en.wikipedia.org/wiki/Moving_average#Application_to_measuring_computer_performance
# ST = solvetime, T=target solvetime
# height = most recently solved block
# N=70
# MTP should not be used

for (i=height - 10 to height) {  # check timestamps starting 10 blocks into past)
previous_max = max
max=timestamp[i] if timestamp[i] > max
}
ST = max - previous_max
ST = max(T/100,min(T*10, ST))
next_D = previous_D * ( T/ST + e^(-ST/T/N) * (1-T/ST) )
```
A word of caution with the above EMA: when converting to and from bits field (aka target) to difficulty, it is important to not make a consistently wrong "rounding" error. For example, if previous difficulty was 100,000, it is important that nothing in the code make it consistently +50 more or consistently -50 less (0.05% error). That would cause the EMA at N=70 to have 3.5% error in solvetime. At 0.5% error per block, there is 35% error in the solvetimes (difficulty is 30% too high or low). The error that develops seems to be based on about 1.005^70 = 41%. If half the time it is +1,000 too high and the other half -1,000 too low, then it's OK. just don't be consistently wrong in the same direction. Error in the value for e=2.7183 does not hurt it.

In an simple average (SMA), a multiplicative error like this only causes a proportional error in solvetime, not a compounded error.

There is a T/solvetime ratio in two places. It must be the same in both places. I don't know how it would be coded to give something different, but it's something to be aware of.

==========
The following attempts to make it smoother while having some ability to respond to faster to big hashrate changes.
```# Dynamic EMA difficulty algo (Jacob Eliosoff's EMA and Zawy's adjustable window).
# Bitcoin cash dev(?) came up with the median of three to reduce timestamp errors.
# For EMA origins see
# https://en.wikipedia.org/wiki/Moving_average#Application_to_measuring_computer_performance
# "Dynamic" means it triggers to a faster-responding value for N if a substantial change in hashrate
# is detected. It increases from that event back to Nmax

Nmax=100 # max EMA window
Nmin=25 # min EMA window
A=10, B=2, C=0.37  # A,B,C = 10,2,37 or 20, 1.65 0.45,

# TS=timestamp, T=target solvetime, i.e. 600 seconds
# Find the most recent unusual 20-block event
for (i=height-Nmax to height) {  # height=current block index
if ( (median(TS[i],TS[i-1],TS[i-2]) - median(TS[i-20],TS[i-21],TS[i-22]))/T/A  > B
or
(median(TS[i],TS[i-1],TS[i-2]) - median(TS[i-20],TS[i-21],TS[i-22]))/T/A  < C  )
{   unusual_event=height - i + Nmin   }
}
N = min(Nmax, unusual_event))

# now do the EMA shown above with this N

```
Here's another algorithm that seems to be about as good as the EMA
```#  Weighted-Weighted Harmonic Mean (WWHM) difficulty algorithm
# Original idea from Tom Harding (Deger8) called "WT-144"
# No limits, filtering, or tempering should be attempted.
# MTP should not be used.

# set constants
# N=60 # See Masari coin for live data with N=60
# T=600 # coin's Target solvetime. If this changes, nothing else needs to be changed.
# adjust=0.99 # 0.98 for N=30, 0.99 for N=60
#  k = (N+1)/2 *adjust * T # there is not a missing N.
# height = most recently solved block

# algorithm
d=0, t=0, j=0
previous_max=timestamp[height - N]
for ( i = height-N+1; i < height+1; i++) {  # (N most recent blocks)
max_timestamp=max(timestamp[i], previous_max)
solvetime = max_timestamp - previous_max
solvetime=1 if solvetime < 1
# for N=60, 10*T solvetimes drives difficulty too far down, so:
solvetime = 10*T if solvetime > 10*T
previous_max=max_timestamp
j++
t +=  solvetime * j
d += D[i] # sum the difficulties this is how WWHM is different from Tom's WT.
}
t=T*N if t < T*N  # in case of startup weirdness, keep t reasonable
next_D = d * k / t

# limits on next_D do not need to be used because of the above solvetime restrictions
# but if you still want limits on D's change per block & expect max 5x hash rate
# changes or want to replace the solvetime restrictions, use
# limit = 5^(3/N)
# next_D = previous_D*limit if next_D > previous_D*limit
# next_D = previous_D/limit if next_D > previous_D/limit

```

## Monday, November 13, 2017

### Maximizing options as the basis of memory-less intelligence

There seems to be some big news in A.I. and cosmology. To give an example of how far-reaching this idea is, view walking upright and the ability to use our hands as something that maximizes our options rather than something that gives us more power in any other sense. This simple algorithm can successfully play games without any training at all, other than defining "maximize future options" for a given set of rules.

I am far from certain his general view is correct (or even expressed clearly enough to criticize. I still can't view it as anymore than a method of problem solving when his claims are much greater than that, but I can't exactly understand his claims. It sounds like he is saying things appear intelligent because nature somehow keeps options open.

Ted Talk
https://www.ted.com/talks/alex_wissner_gross_a_new_equation_for_intelligence

General idea:
https://physics.aps.org/articles/v6/46

How it's good at playing atari without training:
http://entropicai.blogspot.com/2017/06/solved-atari-games.html#more

On freedom in society making us more powerful:
https://www.edge.org/response-detail/26181

Basic physics of causal entropy and intelligence
http://www.alexwg.org/publications/PhysRevLett_110-168702.pdf

How it can predict the cosmological constant by following the anthropic principle:
http://www.slac.stanford.edu/cgi-wrap/getdoc/slac-pub-12353.pdf

## Saturday, October 21, 2017

### bits field relation to hashing and difficulty

In the block explorer you can see a "bits" field determines the difficulty that can be compared between all coins. It is a compact form of the maximum value the hash of the block header must have before nodes will accept the miner's hash. A miner's job is to hash until he can find a hash that is less than the hash value stated in the bits field. The difficulty algorithm sets the bits field value. In HUSH's block 190703 the bits field is 1d 08 ec fa. The 1d in decimal is 29, which means the max hash value is 29 bytes long. The 08 ec fa gives the value of the first 3 of those 29 bytes. The rest of them are 00. If you convert those 1st three to decimal and multiple that by 256^(29-3) it is 2.4E68. The hash of a block header is 32 bytes long, which can take on 2^32 = 1.15E77 different values. The miner's job is to keeping hashing, changing the nonce field between each hash (with a starting point given to him by the pool) to get a different hash each time, until he finds a 32 byte hash that is below that 2.4E68 number. 2.4E68 is 481 million tmies less than 1.16E77. So the miner has to hash that many times in 150 seconds to have a 50% chance of winning. 481 / 150 = 3.21 million hashes per second, which was the network hashrate during that block. The difficulty in hush-cli as you said was 239 M. 2^1 * 239 / 150 = 3.19 M Hashes/s network rate. For some reason, in Zcash replace the 2^1 with 2^13.

## Friday, October 20, 2017

### Blockchain timestamps, difficulty, and the stars.

posted to Zcash github:
https://github.com/zcash/zcash/issues/1889

Any upper limit you apply to timestamps should be reflected in a lower limit. For example, you could follow the rule that the next timestamp is limited to +/- 750 seconds from the previous timestamp +150 seconds (+900 / -600). If you don't allow the "negative" timestamp (-600 from previous timestamp) AND if miners can assign timestamps without a real-time limit from nodes, then a miner with > 20% of the network hashrate can drive the difficulty as low as he wants, letting everyone get blocks as fast as he wants, in less than a day.

A symmetrical limit on timestamps allows honest miner timestamps to completely erase the effect of bad timestamps. ( You do not need to wait 6 blocks for MTP like Zcash does in delaying the use of timestamps for difficulty, see footnote. ) If you allow the symmetrical "negative" timestamps, you do not need nodes to have the correct time with NTP or GPS unless miners collude with > 51% agreement on setting the timestamps further and further ahead of time to drive difficulty down. It's a real possibility if miners decide they do not like a certain fork due to not providing them with enough fees.

But if your nodes have an accurate time, you do not need mining at all. The only fundamental reason for mining is to act as a timestamp server to prevent double spending.

BTC and ETH depend on nodes to limit the future time assigned to blocks. This seems like a bad joke. Zooko was the only one here who seemed to know there is something fishy about strong reliance on nodes having the correct time. The extent to which BTC and ETH need those forward-time limits to be enforced by real time is the extent to which they do not need mining.

Since gmaxwell (and apparently Satoshi) reject the idea of relying on state-sponsored and crash-able GPS, NTP, or cellphone systems to eliminate the need for miners, the ideal solution is to have nodes that use a camera with a good zoom, known location, and accelerometer (if their camera is a cell phone not correctly mounted) to determine star position and to periodically calibrate their time based on that. @fluffypony was the only one I could get to "like" this idea on twitter. Every honest desktop node could reject transactions with bad timestamps, within some small window like 1 minute (with good optics). Science like this does not need to ask for consensus. Every node on his own could give the middle finger to every node that disagrees with him. Nodes with correct time would naturally comprise the biggest network, all saying F-you to the miners. Blocks could be 2 minutes apart and need only 1 confirmation. Science began with looking at the stars and time is the only thing I can think of that computers can determine in isolation and then agree on without a trusted 3rd party. Colluding miners bullying us with > 51% hashrate into more total fees at the expense of security is a trusted 3rd party.

Footnote:
MTP does not stop a 25% attacker who can set timestamps > 4 blocks ahead if other miners are not allowed to assign a "negative" timestamp to eliminate the error in the next block. But if you allow the "negatives" then MTP is not needed. Putting your tempering aside, this assumes you use

next_D = avg(D's) * T / avg(solvetimes, allowing negative solvetime)

next_D=sum(D's) * T / [max(Timestamps) - min(Timestamps) ]
because the N's of the denominator and number of the first equation do not cancel like you would think and hope (in order to use the second equation) when there are bad timestamps at the beginning and end of the window. With the MTP, your difficulty is delayed 5 blocks in responding to big ETH miners who jump on about twice a day. That's like a gift to them at the expense of your constant miners.

Also, your tempered N=17 gives almost the same results as a straight average N=63. I would use N=40 instead, without the tempering. It should reduce the cheap blocks the big ETH miners are getting.

Your 16% / 32% limits are rarely reached due to the N=63 slowness. This is good because it is a symmetry problem, although it would not be as bad as BCH. Use "limit" and "1/limit" where limit = X^(2/N) where N=63 for your current tempering and X = the size of the larger ETH attackers as a fraction of your total hashrate, which is about 3. This allows the the fastest response up or down at N for a given X with 80% probability. Change the 2 to 3 to get a higher probability of an adequately-fast response. The benefit is that it is a really loose timestamp limit on individual values, as long as the aggregate is not too far from the expected range.

## Wednesday, October 18, 2017

### Hold coins w/ nLocktime (or burn) as a source of price appreciation (via velocity theory of money)

post to HUSH chat:

Now I see we can't even charge HUSH fees for sending email because if the value increases a lot it will be too expensive. to email. Is it possible for the protocol to measure the swap rate between dollars and HUSH? If yes, then that seems to be a way you could charge say \$0.0025 per tx output plus \$0.000001 per tx byte . I'm allergic to blockchain bloat. You could burn 1/3 for price appreciation, send 1/3 to devs, and 1/3 to miners. If you don't burn HUSH (or enforcing holding times), what is the market incentive to increase its value if Zcash and other alts are going to attract most of the people seeking an anonymous store of value? There's a similar problem when spending HUSH for XHCP. How is XHCP automatically lowering in HUSH price so that you don't have to fork when HUSH increases 10x? Is burning some of that HUSH the only sure way to get market appreciation? Instead of burning in both cases you could require an nLocktime holding time to enforce the velocity theory of money. Previously I mentioned putting a locktime on the HUSH (for XHCP) before it can be spent, so devs can't spend it right away, giving a contuned work motivation just like stocks. But now I see it has a price appreciation effect. Dollars have value because they are being HELD in many places. It's not merely for savings, but as a requirement of doing business. But in a blockchain that is not being used to make purchases for goods or services in order to get other goods and services that have shipping and production times, there is no hold time. True, XHCP is a service, but if this "gas" should have a constant value, then the exchange rate between it and HUSHJ should fluctuate and in doing so, it removes the incentive to hold HUSH. As a speculator, I would have to trust the devs to hold their HUSH. That trust seems to be the primary source of objective (aka real aka justified) price appreciation.
Are there coins requiring a hold time on transactions as a source of price appreciation? I previously described making receivers also hold HUSH in order to receive but that seems to make it complicated without benefit. In this simpler holding time scheme, the sender would be required to send an amount of HUSH (determined by dollar or commodity basket exchange rate) with a locktime on it to himself.

## Sunday, October 15, 2017

### Smoothing coin release rate for bitcoin

If a coin wants to implement a continuous reward adjustment to give the same number of coins released as the same rate as bitcoin use:

C/block = 69.3*(0.5)^(-height/210,000)

But to implement it in an an existing coin, it takes a little more work to find a solution:

The halving events in BTC seem absurb in being such a powerful step function. Due to rounding error and trying to keep the same quantity of satoshis emitted every 4 years, it takes some effort to find a formula that exactly ends in 1/2 as many coins per block after 4 years (210,000 blocks) and gives the exact same number of Satoshis in those 4 years. Here's what I came up with.

Once every 4 hours, starting half-way into a halving event, set coins awarded to

BTC=C*int(1E8*A*B^(N/8750))/1E8

where

C = number of coins supposed to be emitted in this halving event.
A = 1.072026880076
B = 0.46636556
N = blocks after the 1/2-way point, up to 8750 when N goes back to 1 and C is cut in half.

8750 is 4 years' worth of 4-hour periods. I didn't like 5, 7, or 10 hours because it is not a multiple of a day. 2 hours would have been harder to check in excel, having 2*8750 adjustment per halving. Other options were not an integer number of blocks. I guess 8 hours is an option.

I guess it could be improved to not have to reset C and N every 4 years.

I believe there is a starting point that is better in the sense that it results in a simpler equation that is good for all time, like ln(2) = 0.693 into a halving event or maybe 1/e into it or 1/e before the end.

## Wednesday, October 11, 2017

### The ideal currency (new)

This does not replace my previous ideal currency article that talks about a p2p coin that depends on "reputation" as the coin itself. I want to connect the lowering of physical entropy on Earth to currency.

Previously I described how all characteristics of an ideal currency such as Nick Szabo's list (scarcity, fungibility, divisibility, durability, and transferability) can be derived from the desire to have constant value in space and time. The best measure of "value" results in a more specific definition: ideal constant value currency is proportional to the net work energy available per person. A legal system creates the relevance of the currency and guides system-wide goals. Otherwise it is an anarchy-type asset where individuals are not necessarily cooperating for a larger goal such as survival and promotion of a society. I'm not talking about that type of currency. The assumed legal system dictates how the energy may be used, which includes enforcing the concept of ownership of "the work energy assets" and enforcing law (settling disputes, collecting taxes, etc) in that particular currency (unless the transfer of other "work energy assets" in certain cases is more appropriate). Intellectual property does not have a visible net work energy that is proportional to its numerical value, but it ostensibly increases the net work energy available in other assets by making the use of them more efficient, even if only by entertaining people which may enable them to work better. Assets have a real net physical work energy, but in calculating how much more currency should be in the system due to those assets, the costs of anything such as intellectual property needed in its conversion to work should be first subtracted out.

There is waste energy as heat when work energy is expended, and the amount depends on the form of the original energy. There is also wasted energy when work energy is expended to get other work energy where it is needed. These and other forms of waste are not included in the "net total work in the system per person" that I'm talking about. So, I can't say this work is exactly based on Gibbs free energy ( E = U + pV - ST) of a set of atoms in some system because that is measured before these wastes. Gibbs free energy is the precise definition of "available work energy". So what I'm talking about is the Gibbs free energy minus the waste which includes cost of the intellectual property. Gibbs free energy includes a subtraction from the total that is due to the energy having an amount of disorder (entropy) at a given temperature (S*T). In a sense, the waste and I.P. expense is like a pre-existing "disorder" (or inefficiency) in the assets. If the size of the system under a common legal and currency control is stable, the new total net work energy coming into the system in a given time is equal to the waste energy going out. The infrastructure that acquires the input energy is a potential energy that will be depleted over time as the infrastructure depreciates. Every asset is similarly a potential energy. So the net work energy I've defined is probably better viewed as a potential energy and new energy coming in and going out in a stable system keep that potential energy constant. If the incoming energy coming is greater than the waste going out, the potential energy of the system is increasing, which should be accompanied by an increase in currency. Also, if the I.P. costs in the system decreases, it is like the S*T part of Gibbs free energy decreasing, enabling more of the potential energy to be converted into work energy. This also demands more currency creation.

The currency is proportional to the net work energy in the system, but not equal to it. All assets in a legal system should have a reference such as a document that defines the owner. The currency gains control of a portion of those assets (say, 10%) by owners having debts as well as assets which places a lien on their assets, so they do not exactly have full ownership of the assets they own. The debts may be expressible in other assets, but the legal system typically allows settlement in the currency. So not all debt is currency, but all currency is based on a debt. An immediate question I have is "Should the total debt-currency (as a percentage of the assets in the system) be constant?" My first guess is "yes" to keep things simple and therefore more measurable and predictable.

The rest is highly suspect that I need to investigate further. I have it here for my future reference.

coins = bytes = DNA = synapses => used to create economically beneficial arrangements of atoms and potential energy

The usefulness of energy depends on the form it is in as well as the pre-existing order of the matter it needs to move. For example, oil in the ground is not as valuable as oil in a tanker. Gold in an vein is not as useful as gold in sea water. So the order in the mass of commodities has value like energy commodities due to making itself more amenable for energy to move. A.I. systems like evolution and economies use energy to move mass to make copies of themselves to repeat the process. More precisely, the historical position of mass and potential energy gradients cause matter to form self-replicating way. Genes, brains, and A.I. are not forces that do anything of their own free will, but they are the result of forces from pre-existing potential energy gradients that created them. They are enzymes that allow energy and mass to move in an efficient direction, not forces. The following is mathematically exactly true: Intelligence = efficient prediction = compression = science. I am referring to the "density" of each of these, not the total abilities. For example, science seeks to predict the most in the least number of bytes. The least number of bytes is known as Occam's razor in science and is the 2nd of two fundamental tenants of science. The first is that observations should have the potential to prove a theory wrong (falsifiability), and that those observations always support the theory (reproducible observations). So the 1st science tenant is prediction and the 2nd is compression or efficiency. Total currency in an A.I. system = bytes / time that are destroyed in CPU computations and memory writes. Every computation in a CPU and memory write to RAM or a hard drive generates heat and entropy. The theoretical minimal entropy per byte destroyed is S =kb * ln(2). kb is boltzmann's constant. The minimal heat energy created (the energy lost) is Q = Temperature * S. In economics, the "bytes" are "dollars" that represent energy spent like a CPU computation to create a mass of a commodity (like the storage of a byte). When we write to memory in A.I. we are creating value that can be used in the future. Typically the writes are assigning weights to the connections in neural nets or the probabilities to a Bayesian net or making copies of a gene in genetic algorithms. Bytes in evolution are DNA. The bytes in our bodies are cellular energy like glucose and energy stored in the crystals of DNA. Energy-based commodities are spent to create mass-based commodities that are used for an economic system to replicate (expand), just like evolution and A.I. Total currency is the total available commodities per economic cycle. Approximating a constant number of economizing agents like people or neurons in a brain or nodes in a neural net means that the currency is also a bytes per economic cycle per economizing agent. Agents compete for the limited number of bytes in order to increase the number of bytes per agent per cycle. Coins are bytes that represent a percent ownership of the total commodities available per economic cycle per person.

### ideal cryptocurrency:

This is jumbled, but I want to save it for future review to pick up where I left off.

=======

zawy [9:54 AM]
Obviously the intent is to replace fiat, amazon, and ebay, but it should also replace FB. A transaction could be a payment you make to friends if you want them to look at a photo. The photo would be part of the transaction data. Since only you and your friends store the data, there are no transaction fees other than the cost of your computing devices. Your friends have to like it in order for you to get your money back. LOL, right? But it's definitely needed. We need to step back and be able to generalize the concept of reviews, likes, votes, and products into the concept of a coin. You have a limited amount dictated by the size of the network. The network of friends decides how much you get. They decide if you should get more or less relative power than other friends. (edited)

zawy [9:58 AM]
It would not require trust in the way you're thinking. Your reputation via the history of transactions would enable people to trust you. It's like a brand name, another reason for having only 1 identity. Encouraging 1 identity is key to prevent people from creating false identities with a bot in order to get more coin. The trick and difficulty is in preventing false identities in a way that scams the community.

zawy [10:04 AM]
Everyone should have a motivation to link to only real, known friends. That's the trick anf difficulty. I'm using "friend" very loosely. It just needs to be a known person. Like me and you could link to David Mercer and Zookoo, but we can't vouch for each other very well. That's because David and Zookoo have built up more real social credibility through many years and good work. They have sacrificed some privacy in order to get it. Satoshi could get real enormous credibility through various provable verifications and not even give up privacy, so it's not a given that privacy must be sacrificed. (edited)

zawy [10:07 AM]
Right, it should be made, if possible, to not give an advantage to people because they are taking a risk in their personal safety.

zawy [10:15 AM]
The system should enable individuals to be safer, stronger, etc while at the same time advancing those who advance the system. So those who help others the most are helped by others the most. "Virtuous feedback". This is evolution, except it should not be forgotten that "help others the most" means "help 2 others who have 4 times the wealth to pay you instead of 4 others with nominal wealth". So it's not necessarily charitably socialistic like people often want for potential very good reasons, but potentially brutally capitalistic, like evolution.

zawy [6:26 AM]

zawy [6:40 AM]
So China sells us stuff for dollars, and those dollars gives china control of U.S. taxpayers, provided our government keeps its implicit promise to not inflate the fiat to an unexpectedly low value too quickly, which would be a default on its debt. So your "financially popular" existence that is proven by past transactions of fulfilling your debt promises gives you the ability to make larger and larger debt promises. How or if social likes/votes should interact with that I do not yet know. But I believe it should be like democratic capitalism. The sole purpose of votes is to prevent the concentration of wealth, distributing power more evenly. This makes commodity prices lower and gives more mouths to feed, and that enabled big armies, so it overthrew kings, lords, and religions. Then machines enabled a small educated Europe and then U.S. population to gain control of the world.

[6:43]
If my ideas ever solidify, I'll program it in Python.

The end game of currency will be a trust network where your reputation among friends and past buyers/sellers is the amount of currency you own to purchase things in the future. You can't lose your keys because your reputation is stored on the network. It's not centralized in any way like bitcoin, except for the protocol people should agree on. Complete anonymity is not possible, but only sociopaths don't have any friends and don't deserve any currency. A super-majority of friends can rat you out or give your keys back. You can't exchange with strangers until the network grows tentacles via 6 degrees of separation. You are penalized if a friend cheats and vice versa. You can have multiple identities but it means you would have to split friends among them, not getting any net benefit except fall-back security and dispersion to distant networks. There is no currency except how friends of friends of friends etc choose to score your reputation. There's no profit to being a dev or adopting early. There's huge profit in not being anonymous.

your productivity would show in high scores from things youve sold. As I mentioned last time I'm using "friends" losely. The guy in india who gets me cheap meds is a friend. I sent him bitcoin blindly and hope i get the products

[9:26]
he and i benefit based on trust which is based on our reputation with each other

zawy [9:45 PM]
Again, the network would have to really grow "grassroots" style among people like you and me. You and I have not trust with the bots sending us spam and whatnot, and we would not believe anything posted on bitcointalk unless we had a history of knowing someone

[9:47]
the whole point is to solve these problems. I mean I have these problems in mind as a reason for designing it. I just havent worked on any of the details

[9:49]
our computer would check a potential sellers network for connections to ours, and we buy nothing from them because the reliability settings we've chosen would indicate low reputation no matter how many friends they have simply because we and our friends have no experience with them. an interesting side effect is that you're more likely to do business with people you know.

[9:50]
but in the beginning, we would trust strangers as much as we do people on ebay and openbazaar

zawy [9:53 PM]
we are each basically issuing our own credits and debits like the tally sticks. We are issuing our own currency. The settings people choose depend on how much they score our reputation.

[9:54]
so there would be 7 billion currencies and (7B)^2 exchange rates

zawy [9:56 PM]
total currency should equal total energy controlled by the legal system divided by the number of people

and recovering lost coins is not possible. I'm talking about trying to get perfect even distribution and lightening speed pf the network everywhere and the ability to recover lost keys and potentially losing anonymity only among friends

zawy [10:02 PM]
i mean i could be an anonymous person on the internet like Satoshi who has enormous reputation despite the physical body being unknown

zawy [10:07 PM]
so I should really say friends, but that's the way it could start. Really maybe it's more likely to start with strangers you just have to trust like I do cpeople in india and china. So instead of "friends
I should say "past buyers and sellers"

## Friday, October 6, 2017

### Cross-chain atomic swaps

If the BTC scripting is enabled in HUSH, it looks like I could write transaction scripts for cross-chain atomic swaps with no changes to the code. A HUSH seller "A" would first send funds to themself (via a t-transaction) that includes a message field that indicates "these coins are for sale for x coin" where "x" coin would have to be BTC-script-compatible. The message field would include the 1st transaction script in the atomic swap described in the link below. The amount of HUSH offered and the amount of "x" required to get it would be in that script. Both users would need a GUI (probably as part of their wallet) for each coin that scans transactions for "sells" and "buys" and each cross-chain-swap wallet would need to be following a protocol standard. B's HUSH wallet would see the offer, and generate the "code" that he would copy and paste to his BTC wallet which his BTC wallet converts to a transaction that will indicate via a transaction that he wants to sell the correct quantity of BTC for that HUSH. A's BTC wallet would be scanning BTC transactions for that buy request, and generate the "code" that her HUSH wallet needs. She would copy and paste that "code" to her HUSH wallet, which will know how to turn it into a transaction that includes the script that will allow B to unlock the HUSH funds. The script includes the timelock that allows her to regain the funds if B does not spend them. B's HUSH wallet would see it and construct the "code" for copying and pasting to his BTC wallet that will similarly include the script in a BTC transaction that A can spend. So, as far as I can see, it only needs to be wallets that are following a protocol, not a code change to the coins. I assume there is some field in BTC that can be used to send text. There's no market created, unless there are a lot of BTC buy requests on the HUSH chain competing to get BTC sellers. You just wouldn't sell or buy unless the price was as good as what is on cryptopia, etc.

Summary:

My above text describes a general implementation without changes to either coin (only changes to how a wallets use the data given) but I left out some steps. Here is a more complete view of the process. (I've got "A" sending the altcoin instead of BTC).

1) A sends HUSH to self with message field.
2) B sends BTC to self with message field.
3) A sends HUSH to self with message field that fulfills (in the link above) "A sends TX2 to B".
4) B signs it and returns to A via the message field in a HUSH (or BTC?) transaction to self.
5) A sends locked HUSH transaction, refundable by A if B is unable to cash in 48 hours.
6) B does exactly the mirror image of what A does in 3, 4, and 5, but with 24 hour condition.

B can't spend 5 until A spends the last part of step 6. A can't spend B's BTC (last part of 6) unless the unlocking script she uses provides the secret random number that hashes to the correct value she previously provided to B in step 3. That random number is what B needs to spend 5. (edited)

I don't even know if there is a message field available on BTC. Even if there is, it would be simpler to have an off-chain source like bitcointalk where people post the sell offers, then having the buyer/seller PM each other to replace all the "send to self" steps.

## Monday, September 25, 2017

### What's wrong with global warming?

What’s bad about global warming? Plants generally love the doubling of CO2, possibly offsetting the destruction of marine life. Shifting of farmlands is probably not going happen faster than we can adapt, as evidenced by Netherlands (of all places) being 2nd largest exporter (in dollars) of vegetables. I read a study that concluded it has no impact on manufacturing. It appears solar cells for fueling cars and homes (with thorium reactors for night?) could stop the CO2 increases. Worse, I do not even see global warming as relevant. We will still continue destroying species at roughly 5,000 the background rate until we are left with only the ones we find economically relevant. But it’s not exactly “us” destroying biology. The “rise of the machines” makes other species irrelevant to the point of unintentional destruction. Even human thought and labor are already so irrelevant that it’s hard to imagine of what use humanity will be to our economic machine 50 years from now other than spending basic guaranteed income. Free money destroys culture and seems to create needless violence (research on the result of the past 50 years of U.S. welfare). Even now “the machines” don’t even need capital to suddenly change everything via 1 or 2 decent programmers and/or someone making good marketing decisions. I mention capital because it has always been thought of as the tool by which the machines and a few capitalists would enslave everyone else without government intervention. The tech that makes capital irrelevant could make everyone wealthier and more independent (for example: solar cells and hydroponic gardening packages for your backyard, not to mention peer-to-peer blockchain technology replacing governments and financial industry). But I do not believe the physics that governs evolution (closed thermodynamic system receiving energy and emitting energy and entropy to the universe) that results in economizing structures of lower and lower entropy per mole is going to forever blindly find it optimal to merely fulfill human desires. Even now thinking we are somehow in control is a suspect idea. We are merely one of the many resulting enzymatic pathways physics uses to move matter via potentials. The machines are vastly better than biology at every aspect of evolution: capturing energy from the sun, moving matter with that energy, having strong structures to do it, and to model and optimize future scenarios with thinking machines. It’s taking my children 4 hours a day for 6 years and ~100 grams of grey matter to understand spoken and written Chinese as well as 1 gram of silicon on my smart phone learned in 30 seconds. It’s because the low entropy per mole of silicon allows the control of electrons instead of ions in wet brains that weigh 40,000x more. Global warming is irrelevant because biology as we know it will soon be irrelevant.

## Friday, August 25, 2017

### Environmental impact of POW algorithms

hush slack comment

The current equihash is pro-GPU (ASIC-resistant). Making the algo more CPU or smart phone friendly will use more electricity compared to hardware expense because so many of those hardware units are sitting idle and miner competition means more money will be spent on electricity than new hardware. Maybe in the beginning there could be an evnvironmental benefit, but over the long term this is not to say a CPU/smartphone algo will have less of an environmental impact. Also, any algo that could do this is too new for my comfort. Equihash had a small hope for helping CPUs compete with GPUs, but it did not work out. The environmental impact is exclusively determined by how important society thinks POW coins are. The more society pays for POW security, the more miner competition there will be. Miner competition will involve paying for both hardware and electricity. If the algo shifts costs to hardware, the money is ultimately being spent on engineers or shareholders lucky enough to own good intellectual property (like NVIDIA). Those engineers and shareholders are just going to spend the money on things that will ultimate require more electricity. So there's no way to reduce expense on the total amount of electricity or other resources are use: economics demands POW because it is the only proven security. Competition means hardware and electricity expense (waste) will equalize with society's demands for the POW security. A caveat is that some jurisdictions allow free electricity which means those miners have more money available to spend on hardware to compete with each other, wasting electricity. So a shift to hardware can be good for that reason. Also a shift to CPU/smartphone hardware could be good for the coin because it means better even distribution of mining which invites more users and provides 51% protection. But HUSH devs can't fix these problems (shift to hardware or shift away from POW) because they are the most difficult to fix that the best minds in the world have not yet solved. But they can be smart enough to not try any of the newer ideas because it will reduce the security of the coin.

## Thursday, August 24, 2017

### BitcoinCash difficulty algorithm problems

BitcoinCash allows a drop in difficulty down to 1/4 if the last 5 blocks took > 12 hours. But the rise in difficulty takes 2016 blocks (two weeks if the difficulty matches hashrate) like bitcoin. They did this so that difficulty could drop quickly after the fork. But this asymmetry (long time to adjust up, but short time to adjust down) is causing unexpected feedback that will cause oscillations that could cause too many coins to be issued and the price go towards zero until there is a fork to fix it.

This is how it starts and why it gets worse: Assume price is stable and difficulty matches hashrate correctly. If for some reason price relative to bitcoin falls at the end of a set of 2016 blocks, some will jump ship but next difficulty adjustment will still be too high because it is a long averaging window. A short rolling averaging window would not have caused a problem (and does not even need the attempted BCH "fix" to get difficulty lower). But as it is, difficulty will be too high for the next block, so miners are still discouraged from mining. The slower issuance of coins may actually support price, but maybe he longer solve times, seen as a problem, can cause an even more negative effect on price. If price falls a little more due to this, the threshold of mining profitability may be passed, so a flood of miners could exit, causing really long solvetimes. This can cause the price to drop even further due to not being able to get transactions to go through. So REALLY long solvetime could occur. As soon as the 5 blocks take more than 12 hours, difficulty in the next 2016 set (only the 3rd in this sequence) will go to 1/4. remember difficulty in the 2nd block had actually dropped a little, so the 1/4 is not fixing an accidental 4x increase in difficulty. Suddenly, it is really profitable to mine, unless the price also dropped to 1/4. Let's say it had dropped to 1/2 or less. So the blocks will come at a fast rate. But as soon as that 2016 set ends, difficulty will be massive in the 4th set of 2016 blocks, and the price may be even lower due to people seeing the problem and due to too many coins being mined too quickly and sold. No longer have long solvetimes is "fixed" for that set, but it is only replace by the opposite problem. The 4th set will have very high difficulty and last maybe only 5 blocks as it will take too long to solve, then the 6th block will get the difficulty down to 1/4. If there was more than 4x increase in hashrate due to miners jumping on, then 1/4 downward change may not be a lower difficulty than it was in the 3rd set of 2016. The price should also be worse. These two effects may reduce the oscillation. But notice it depends on a huge number suddenly jumping on AND a worse price, and this is the best case scenario for reducing the size of the oscillations. The alternative of larger oscillations will also have a negative effect on price. So it's an unavoidable downward pressure on price. I saw a buy/sell opportunity in BCH and made good on it. This is actually looking like an impending buying opportunity, right before a fork that fixes it.

A huge part of this is that BCH miners can go back and forth to BTC. But notice large BTC miners have no place to go if there was a similar problem in BTC. It's kind of another reason 1 big coin naturally results.

edit:

Summary
Causes:
1) Asymmetrical math in how difficulty rises verses falls.
2) There is a threshold to mining profitability, so that only a minor fall in price can cause many miners to jump ship
3) Miners can switch back to BTC while waiting for the difficulty to fall which magnifies the problem caused by 2).
3) 1 and 2 may not have been a problem if it was a short rolling average window to determine the difficulty instead of being like BTC and suddenly changing every 2016 blocks.
4) This problem erodes price from reducing the quality of the coin by have 2 hour solvetimes if not issuing too many coins too quickly.

## Friday, August 11, 2017

### Strong Drink mix for Parkinson's

I have been putting together a really strong drink. I guess it's about \$15 a day, with most of the cost being in the powder extracts, \$2 to \$3 per day each, straight from China in bulk.

12 oz pomegranate juice from Hispanic store (not the expensive POM)

=================

black cherry concentrate 12 g

black molasses 12 g (sugar cane juice after most of the white sugar is removed)

Jallab 12 g (Arabic grape skin extract plus others)

powder 10:1 extracts:

==================

blueberry extract 12 g (my eyesight sharpened enough to not need my barely-needed glasses in 4 days)

strawberry extract 12 g

apple peel extract 12 g

tangerine peel extract 12 g

Citrus flavonoids with animal studies in PD, bought from china in bulk.

These doses are 1/4 the human-equivalent doses because the studies are "shock" studies on the animals by which I mean they are very short term to see how the chemicals work in response to PD-like toxin challenges.

===================================

nobiletin 500 mg

naringin 300 mg

tangeretin 100 mg

Other stuff in pills with strong animal and epidemiological evidence for PD and ability to absorb and cross blood brain barrier (pills not in the drink):

====================

black tea extract

green tea extract

grape seed extract

fisetin

The American producer of patented fisetin is not clear that it is pure fisetin and the brand is hiding details about what it is, so I'll spend 1/3 as much to get pure fisetin from China and then sell the excess on ebay. Inosine in bulk is also 1/3 the cost from china.

Canola mayonnaise, the bomb!

Broccoli, Sardines, home-made very yeasty beer, olive oil

1 hour exercise, then drink it to absorb the sugar.

## Tuesday, August 8, 2017

### Potential value of bitcoin, empires, and taxes

M3 is roughly "all cash". For US dollars, it's about \$30 trillion. The rest of the world I'll estimate at \$25 trillion because the Euro is about \$12 T in USD. I expect bitcoin and alts to roughly follow this ratio, so BTC would be compared to dollars. so the max would be 30T/21M = \$1.5M per BTC. As this happens, dollars all over the world will come flooding home making them worthless, so it's more important for Americans to switch early than in other countries, to maintain current lifestyle. The ability to print dollars and the growing world economy accepting them has been the biggest boon any country has ever seen. We were basically allowed to print them as fast as the world's economy grew. We spent half the surplus on a military which pushed and supported the use of the dollar, enabling stability and exchangeability in the same way MicroSoft "helped" software. Bitcoin is the Linux of money. Wealth will be more evenly distributed as the dollar monopoly in currency ceases.

Not just the U.S. but all governments will lose power to control if they lose control of the currency that their citizens demand. Countries enforce a currency by demanding taxes and legal disputes be settled in their dollars. Empires use currency to enslave other countries. So countries can start their own cryptocoin, enabling them to enforce law more directly and automatically extract taxes by being privy to every transaction. This would relegate BTC to replacing only gold for private holders, which is \$7T, \$350,000/BTC, but potentially a lot more since a lot of countries want to be more fair in international exchange instead of being stuck with the dollar. Gold is harder to move so there's a great desire to switch to BTC. Also, buying stuff directly from other countries instead of Amazon will need BTC, which is a "black market" as far as the U.S. government will be concerned. It takes away their power as the dollars come home. They can make it illegal to import things from other countries without dollars. The U.S. desperately needs dollars to stay out of the country. When foreigners like the Chinese government start giving us wads of dollars to get BTC, that is NOT the time to switch back to dollars. That is the end of the U.S. as the world power. That is when great powers fall: they spend too much on military to support a coin or gold, lose their skills at production due to enslaving people in the distant lands (via the coin supported by the military), then find themselves powerless as their coin collapses. In the case of Spain getting gold, they just spent it all, then the armada fell and Britain's superior skill at ship building took over. There is also the possibility that BTC will be a basis for establishing ownership of assets and enforcing smart contracts, again putting it well over the \$1M/BTC range. I do not expect it to go over \$500,000 in 20 years. If it reaches \$100,000 it will be a primary way of buying \$1M beach houses as old money finds itself increasingly poor and BTC millionaires start looking for something to do with their gains.

50x = \$150k/BTC does not need BTC to be lucky. It only needs to be the best idea. When BTC reaches \$150k it will be because it is starting to be used as an international standard for trade. It will be because dollars are coming home which will make them lose all their value. The U.S. government will then have to decide to cancel all social security and most government expenses (pollution, law, roads, retirements) and foreign debts, or print money (hyperinflation). That will not stop the inflation because there will be 3x more dollars inside the U.S. from foreigner not wanting them. If it takes 15 years, that will be 7% inflation plus our current 3%. 10% inflation is far from hyperinflation, but still a disaster. Actually the disaster was letting there be a "balance of payments" surplus the past 50 years which means more money going out (via free trade, military, and dept) than what was coming in. This results in erosion of the country's ability to support itself. Free trade is a disaster if it makes the balance of payments worse. The U.S. (like China) got out from under enslavement of a foreign currency by enacting trade tariffs. China's devaluation of currency is in effect a trade tariff on the external world's imports which forces its people to work harder and develop more skill. I believe the U.S. is sophisticated enough not to have hyperinflation. When it reaches \$150k, it is NOT the time the sell, but a time to keep holding, unless you see a better option. But I think a capped-quantity coin is not a good solution and not the solution the rest of the world will want due to late-comers being at a disadvantage. But unless a new coin lets smartphones determine their own time via the stars or random or 3rd party consensus trust, and combine it with a local trust network to decentralize the coin (protecting it from big miners), BTC may be the best option. This is because all alts subject to 51% can be destroyed via simple forward-stamping timestamps, and if BTC miners are hodlers, they will soon find it more profitable to destroy alts than to mine, forcing more money into a few coins. They may even use their BTC value gains to buy more equipment to retain power by destroying alts instead of mining BTC. The miners may turn into BTC's military. This is what happens to all empires: they win by might is right until all the slave countries figure out a way to get out from under the coin that controls them. The coin is backed by a military. Coins are how governments exert control. Some argue BTC has no government, that devs are not really in control. However that may be, anyone who holds BTC will be the new lords, enslaving the late comers, backed by our military, the miners. At least this is our best-case scenario in our search for personal profit.

## Thursday, August 3, 2017

### Shaking marbles in a jar as the simplest exposition of evolution, A.I., and economics

I am not using "entropy" in this article in a vague sense. I am talking about the entropy measured by physics equations.(see note if you're interested in the physics)

Executive Summary of the Physics
Physical evolution in its simplest form is shaking a jar of randomly-packed marbles in a gravitational field. In short, complex (but not completely random) energy injected into a "closed thermodynamic system" results in entropy being released to the universe as black body radiation (more low-energy photons go out than high-energy ones came in...all energy transfer is a sending of photons). Since entropy is a conserved quantity, the entropy inside the container is reduced. A reduction in entropy exhibits itself as a higher degree of order by becoming more densely packed, harder, and repeating patterns. The 2nd law is not "entropy always increases" (see good physics texts such the famous Feynman lectures on thermodynamics that mention this). "Always increases" is an engineering idealization for isolated systems. There is no isolated system in the universe thanks to black body radiation. Gravitational systems are emitting entropy "so that the Universe can expand" (or alternatively "as a result of the Universe expanding"), leaving a lower-entropy state behind. (more detail: The entropy of the Universe is constant on a co-moving volume basis and reducing on a constant-volume basis. This last statement is not speculation but I do not have a good reference. It is not required for the following, but provides the deepest explanation for the origin of life that I have.)

The physics of shaking marbles in a jar
When you randomly and slowly place marbles in a jar they will pack with about 56% fill ratio, leaving 44% space. If you shaking them afterwards, starting first with hard shakes and then softer shakes, they will pack with > 63%. The harder shakes allow for the bottom layer to form first. The softer shakes allow the higher levels to settle without upsetting the lower levels. The highest theoretical packing is 75%. The shaking can't be completely random and consistent because it will continually un-pack. Non-random shaking can be thought of as a "periodic" or "semi-periodic" force (or energy injection). For packing differently sized and shaped small objects there is a more complicated way that does the same basic thing: add heat while lowering pressure, then raise pressure as the heat drops, and then repeat, but lowering the temperature and pressure each time (see wiki's "Simulated annealing"). The heat checks options while the pressure that follows secures and compacts the solutions. The pressure is a force like gravity. The heat is the shaking.

Chemical bonds
I'm not going to hardly mention the chemical bonds that are crucial to life other than to say the reduction in entropy in the products of life can be measured via molar aka specific entropy. There exists in chemistry potential energy gradients due to charges just as in gravity. They can react to form durable bonds that releases entropy and heat to the universe, leaving behind more durable arrangement with lower entropy. Getting into specific chemical bonds can and should be done, but for this post it would be like getting into the motivations of an employee in a company when I only want to discuss company-wide profit seeking that enables the employees to exist. Similarly, when getting into employees motiviations, we do not address the chemical reactions in his brain, nor the genes and environment that led to those reactions. But this outline is trying to show how the "environment" (the Sun, Moon, and Earth via thermodynamics and cosmology) resulted in those genes based on physics as opposed to some nebulous beliefs about "evolution".

Correlation between the jar and life on Earth
The Sun, moon, and Earth's rotation are the initial source of non-random energy coming into the biosphere. The "non-random" (low entropy) placement of the moon's mass away from the Earth has been crucial for life's development (Isaac Asimov once discusses this). Its effect decreases with time as the moon get further away each year, in keeping with the jar analogy but I do not want to stress the "decreasing" part because it is not as important as simply not being random. The effect of the moon is apparent to NASA's life-hunters: the most promising places seem to involve an external gravitational force periodically affecting a celestial body (usually moons close to a planet). The Sun is more important via photosynthesis these days, but I have investigated the extent to which life initially capitalized on ("extracted") the low entropy created by the moon's initial placement. I calculated in a previous post that today the Sun is providing 150x more energy than the yearly loss in Earth's rotational energy due to the moon, but at the beginning of life, the moon was >3x closer with >9x more gravitational effect, and the Earth was turning a lot faster. My calculation (from available data) indicated the moon provided about 20% of what the Sun was providing. This is a "mass moving" quality of energy rather than the "heating" quality provided by the Sun. The combination may have been crucial: periodic heating was a "periodic shaking" at the molecular level while the "mass moving" shaking provided a larger-scale directional force to where the resulting molecules would go. I considered the parallel this has with law guiding individual free market transactions, but have rejected it. Law will be the jar within Earth's jar.

As the moon gets further away, the entropy of the Earth-moon system is increasing due to a volume increase. The Earth's rotation rate is slowing, giving some energy to the moon in order for it to get further away, but a much larger percent is used to churn the air, seas, and mantle via the moon's gravity.To what extent were an excess of ocean vents present (where the oldest known life fossils have been found) due to the moon churning the mantle? The second oldest place fossilized life has been found is in bays with ocean tidal zones, which is more obviously assisted by the moon. To what extent would our massive economic machine not be possible if the moon had not churned the mantle enough to make more ore concentrations possible via volcanic activity? That non-random placement of mass is again a physically-measurable lower state of entropy that resulted from a lowing of the Earth's rotation via the moon.

I have cast it as an low-entropy injection from the Earth-moon system's volume increasing, but most of the lower entropy is coming from balancing the black body radiation (entropy) being emitted as a result of churning/heating caused by the Sun and slowing of the Earth's rotation.

The Sun affected molecules with periodic (daily) heating to enable them to form stronger bonds, a key ingredient for life (the success of "genes" is a combination of ability to spread quickly and last a long time via the really strong bonds of DNA crystals). I will not dive into chemistry because I think that is missing the forest for the trees. It is important to keep in mind genes have no force of their own. They are just enzymes. Future genes model on past genes. Crucial to efficient packing is that the next layer of marbles are guided by the lower levels, obviously copying their arrangement. In what sense is this not like genes? Obviously the marbles do not evolve diversity, but I'm only allowing one type of object into the jar to try to see the essence of physical evolution.

I should mention the Sun and rotation combine to cause a bulk periodic movement of mass like the moon, not just heating. A side effect of this causes charge potential energy gradients that result in lightening strikes which been theorized to be crucial for life. Those strikes are like sudden large "shakes of the jar" at the molecular and atomic layers.

I discussed this in more detail earlier this year, but the above section is more efficient and has new material to show more parallels.

Correlation to artificial intelligence
A large part of A.I. in finding the solution to complex problems is starting with random values in neural nets, Bayesian probabilities, and genetic algorithms. The marbles (in our brain) are the neural nodes, Bayesian nodes, or genes (well, not genes exactly). You typically start with random values and give the program computational energy (shaking) for the nodes or genes to request CPU time and memory (energy) while they are under a system-wide A.I. algorithmic constraint (the jar) and a gravity provided by the training data to find an efficient (low entropy) solution. The solution will show many patterns in the node weights, probabilities, or genes which is the marbles' repeatinng arrangement. The patterns may be eliminated for condensing the node weights, probabilities, and genes into a smaller set of nodes that is more random on a per weight/probability/gene basis. This is like taking marbles out of the jar which is less entropy by a factor of roughly equal to N2/N1 (this is exact if it's a specific molar entropy) and it allows a smaller jar which is also less entropy by a factor described at the note at the bottom. The final result is not a repeated pattern but it is the same(?) or less total entropy. It is more entropy on a per weight/probability/gene basis in an absolute sense, but the entropy per weight/probability/gene "per this system" is the same or less. Nodes in neural and Bayesian nets might be identical in an algorithmic sense (like the jar constraint) and change only their weighting factors (placement). In genetic algorithms, the genes would repeat and/or reduce in number. So the algorithm representing the jar is the set of rules of gene interaction rather than a description of the genes. The genes vary while the marbles do not. There is only 1 type of marble. To compress the marble packing to reduce the number of marbles in the jar, but to completely describe the pattern, only a few marbles are needed. A.I. seeks to find repeating patterns of marbles and normally compress into a single pattern. Fewer marbles are better if they are smart.

Correlation to economics
The A.I. must have some sort of direct, implied, or unnoticed limited-quantity currency that corresponds to the amount of CPU time (FLOPS) and memory that is available, if there is a limit on the amount of CPU power (FLOPS) and memory space that the algorithm can use. The currency is the energy being transmitted from the jar (the algorithm constraints) to each marble (the weight/probability change or gene replication). The CPU time and memory are kinetic and potential energies. The hardware itself is a potential energy. The currency quantity corresponds to computing quantity. If the hardware increases then the currency can be expanded by the algorithm (the government) to keep constant value so that nothing else in the algorithm needs to change. This is like increasing the level of shaking: the currency is the amount of energy being transferred from marble to marble from the jar. The energy comes from the governing jar or A.I via the permission granted by possession of the currency and eventually goes back to it (taxes). In my jar there is no currency I can point to except the energy itself. Although the energy coming in and size of the jar may not change, the entropy of the system gets smaller as it gets more efficient. The lower entropy means better command, control, and strength that is typically used to increase the incoming energy, the "size of the jar", and the number of "marbles". If the allowable nodes or genes are increased, then the value of the currency per node or gene decreases by that same proportion if the hardware has not improved because they will have to compete to get the same computer time and memory. So the currency quantity needs to decrease if the currency should represent the same amount of FLOPs and byte space.

In other words, for contracts to remain valid, the currency quantity should change in proportion to the energy per person that is under the system's control.

Physics note: All other things being equal, the entropy increase of the moon getting further away is S=S2-S1 where S1=a*[ln(b*V1) + c] where V is the volume of the Earth-moon system and a, b, and c are constants. There is rotational energy decrease and gravitational energy increase, but these are internal energies that do not change the kinetic energy of the system (that could have affected the entropy) because the Earth's temperature is about a constant. But those lost energies do emit a lot of entropy away from the system as waste heat. As another example important to the following: harder materials have lower entropy due to the atoms having fewer places per volume that they can occupy. Specifically, for a single harmonic oscillator (in a solid) S=k*ln(kT/hf + 1) where f is frequency of the oscillations which is higher for stronger bonds.

## Wednesday, July 26, 2017

### Ideal currency's relation to thermodynamics of Earth

Again, the goal is value stability, which Nash said should be constant. This does not mean constant quantity. From online sources I can't see where I'm in disagreement with Nash, nor how the ICPI can be built backwards from currency competition because he says the ICPI "could be calculated from the international price of commodities". Even my suggestion that money should devalue very much like a 2% inflation target is not an idea that he throws out: [wikipedia again] "The policy of inflation targeting, whereby central banks set monetary policy with the objective of stabilizing inflation at a particular rate, leads in the long run to what Nash called ‘asymptotically ideal money’ – currency that, while not achieving perfect stability, becomes more stable over time." Moreover, the mild inflation idea as a way to slowly erase debts is something very important that Nash's "ideal money" does not take into account, so from what I see he's missing something crucial. It is possible his ideal money (perfect stability in value) is "ideal" only when the marketplace is ideally guided by "ideal law" that prevents money from concentrating into fewer hands in addition to enforcing basic rule of law in each transaction. Wealth can concentrate from loans, monopolies, and lobbies improperly affecting laws. It can also accumulate from efficiency gains due size, but a healthy system requires competition and dispersion, so I suspect allowing a company to gain over 50% of market share should be "made against the law" even if they followed all other aspects of ideal law. What to do with things that need 100% market share like roads and electricity remains a problem (letting two toll roads compete for the same route is rarely reasonable).

But wealth concentration into a few hands seems to be what a completely free market wants. Progressive tax to redistribute it back out is used in most countries. People get very wealthy as a result of riding society's wave of progress and technology more than any particularly great or noble intellect or skill. Instant billionaire status at age 25 after 4 years of work and near-zero capital investment makes no sense. Getting back to my point: mild inflation is a another check on inefficient, less powerful systems that allow wealth concentration. In ancient times, wealth concentration stifled society, then the people would revolt, install a new king or priest then all debts to the old "lords" weer erased. Jews learned to do it as a matter of course from other societies by declaring "jubilee" every 50 years. Now we have inflation instead.

I can agree with "ideal money" instead of mild inflation if a different fundamental assumption is made: if the wealth accumulation is prevented by something like progressive tax and smart laws on loans, then forcing constant value (zero inflation) on humanity would force everyone to become more efficient before expanding and go a long way to slow population growth and destruction of the biosphere (and in particular, not run into resource constraints so quickly, causing population collapse).

But in reality faster expansion and waste that is helped by low inflation will overpower the ideal money's more conservative expansion.

I am not sure currency should or needs to follow Zipf's law, but it appears it does, and therefore probably should. I agree competition in currency will result in an ideal currency, but knowing what the ideal outcome for people will be (or rather, the most likely-to-succeed outcome) is how you design the ideal money from scratch and then make it available. It also helps me in investing: I am more bullish on bitcoin if it forks. These ideas cause me to predict it will fork several times.

It must fork in order to achieve stable value as its use expands, either by alts or hard forks (which I guess is another name for an alt with a big pre-mine). But the ideal is to find an objective definition and measure of commodity prices and figuring out the best way to expand and contract the supply as the prices change. I agree defining and measuring is a big problem. There must be an objective theoretical way to define "commodity" and the weighting factors needed. An even bigger problem is measuring it without a 3rd party. If the market is big enough does everything become a commodity? Should they be weighted based on how much people spend on them? I believe it also needs slight inflation to help prevent concentration of wealth and the loan problem.

The consumption (destruction) of joules is sometimes used by people like Szabo and XCP (and implied in bitcoin and b-money) to claim "this object has value because a lot went into its creation". Rarity and antique-ness are used in a similar fashion. Trading a commodity itself that required joules to create and maintains economic relevance of the joule's spent (e.g., copper, etc) seems to be a much better idea. If we could trade a basket of commodities around with the ease of a fast cryptocoin, then we have an ideal.

The starting point for how to weight the commodities is my previous suggestion: a coin = a fixed percent of Gibbs free energy available in society divided by the number of people. By replacing my initial "joules" with a ratio, I've potentially removed the necessity of it being related to joules. But joules seem to be the primary thing that creates and runs commodity producers. To be clear, 1 coin out of 100M coins would represent 1/100M control of the "total current commodity output".

% coin owned of the total in "circulation" = % of society's total commodity-producing wealth divided by # people

So if commodity production capacity and number of people is constant, then 1 coin is worth more in joules than in the past. So maybe I should not mention joules to others, but it's important to my attempts to connect physics to evolution and economics. ( The release of entropy from Earth is deeply connected to the expansion of the universe. I've work on that part as much, but it requires an audience that is already aware that the 2nd law of thermodynamics is not that "entropy always increase" (see Feynman's famous intro to physics books the 1st or 2nd thermo chapter) and that entropy is conserved on a comoving volume basis. )

The velocity and availability of money and how to measure these will affect this in a way that I have no idea on how to measure. What is the total coin that is available for use at any given time? It might be locked up in escrow based on contracts. How do asset price fluctuations fit into this? Just watching commodity prices seems to solve all that.

If the economy has gotten bigger as measured by commodities trying to become cheaper, then the government would print new money to build more infrastructure to support the bigger economy (law, schools, roads) if the increase appears permanent, but it should be by lower interest rates if it seems like a temporary swing. The government should be the only bank and primary loan agent. Interest on loans would replace all taxes on middle class.

Nash's ideal money seems to miss the final key ingredient of "value" that I've included: dividing by the number of people. It has the macroeconomic effect of weeding out weak people because coin (commodity-producing joules per person) increases for everyone if the number of people decreases. There would be a macro-economic invisible hand to not overpopulate. It stays constant if every person is more efficient but the joules each coin represents would be more. So our measure of value has an intrinsic aspect as to what other people have. If you consider this I believe it will resolve the "efficiency" problem we both mentioned. So even with the low inflation I seek, the ideal money could discourage overpopulation and overly wasteful expansion.

The end result of all this is that Earth's mass will continue the current unavoidable physics-based path of congealing and hardening until all biology is replaced by machines. The primary goal of devs is to replace brains just as motors replace muscle, and solar cells are replacing photosynthesis (20x more efficient per meter^2 and more efficient at self-replication). Silicon is better than wet brains because the lower entropy per mass of hard silicon allows precise control of electrons whereas the brain has to deal with ions that weigh 50,000x more. Photosynthesis has 20x less ability to control the electrons via photon energy.

The goal of companies is to produce the most with the fewest people and with the fewest shareholders (stock buybacks and venture capitalists). People are so outdated, even their capital is not needed by the machines except to gain market share (hotmail buyout, youtube buyout, snapchat, etc). AMZN is an exception. See the zero marginal cost society. Welfare has been disastrous for the people in the U.S. receiving it, as bad as a 30 year war on that population. The same thing will happen to the rest of humanity as we are no longer needed. There's no good or bad. There's no solution. It's just the matter on Earth congealing to a colder, harder state in keeping with thermodynamics.

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Gibb's free energy E=U+pV-TS is the combination of entropy and energy that decribes how much "useful work" can be acquired from a thermodynamic system. In a chemical reaction you subtract the Gibbs free energy of the reactants from the products and if it is negative then the reaction is spontaneous. I suspect this is the cause of evolution and economics but I have not worked out the details of what it is about our unusually large moon's effect on oceans and the mantle that has enabled Earth to have its entropy per mass continually lowering via life and economics instead of a simple hot body like other planets. In evolution, economics, and artificial intelligence, energy coming from outside the thermodynamics system (the Sun, moon, fossil fuels, and nuclear energy) causes entropy (S) in the economic, evolutionary, or A.I. system to lower while releasing excess heat and entropy to the universe. ( Fossil fuels and nuclear energy are coming from outside of today's biosphere rather than outside the Earth, so they are still "from outside" and fossil fuel are just old Sun energy). The Earth is a closed (not isolated) thermodynamic system so its entropy can decrease. The entropy of the mass that is under the control of our economic system is decreasing on an "entropy per mass" basis. The metals, silicon, and carbon fiber all had oxygen removed from the elements in order to make the materials stronger. Stronger is always lower entropy because the atoms can't be in as many vibrational states because of their positions are more rigidly fixed. It is a massive reduction in entropy per atom. The strength is not only for building strong structures such as bone, buildings, and roads, but also for enabling precise control of the electrons in wires and silicon that enables CPUs, electrical motors, and photosynthesis. Our brains are stuck with moving ions that weigh 50,000 times more. This is why silicon is 20x more efficient at capturing sunlight energy than photosynthensis, why electrical motors are >100x more efficient than muscles (on a cost basis but only 6x on direct energy basis), and why CPUs are 1Mx more efficient than brains: the lower entropy per atom. (a gram of silicon can learn voice recognition in 30 seconds what it takes ~100 grams of brain forever to learn). DNA itself is a rigid crystal so life also has needed the low "specific entropy" or "molar entropy". A constant value currency has a quantity of coin that is equal to the Gibbs free energy under the control of the legal system that protects and guides a marketplace that depends on that currency, divided by the number of economic agents in that system. For example, an A.I. that uses a marketplace of competing agents (aka nodes) must issue a coin that is in proportion to the amount of CPU time and memory space that is available to the agents. The agents/nodes use the coin to request resources for expansion or reproduction. The CPU and memory are like the commodities in our economic system and the nutrients in our blood stream that supports our neurons (neurons compete against each other to establish synapses).

The wiring in neural net A.I. (and probabilities in Bayesian A.I.) and the synapses in brains are the prices neurons and nodes charge other neurons and nodes to activate a signal. A.I. systems buy and sell electrons the way economics buy and sell mass. The electrons in A.I. systems and the ions in brains are ultimately trying model the movement of much larger quantities of mass (all ideas like love are ultimately based on mass moving in space-time) so the A.I. system (including the programmer and user) can make better use of the external world's mass to make a copy of itself. A.I. systems not doing this will not be a part of the future. The coin is what ties all the competing agents together. A fixed quantity of coin per gibbs free energy available in an economic system per competing economic agent forces the agents to lower the system-wide entropy per mass of the system. This is a spontaneous, unavoidable result of physics when there is energy coming into the system and entropy leaving the system (Earth).
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When I say "constant value currency = Gibbs free energy per person in an economizing system" I mean the "Gibbs free energy" = energy available for work = energy - entropy = energy + order = ordered energy. The usefulness of energy depends on the form it is in as well as the pre-existing order of the matter it needs to move. For example, oil in the ground is not as valuable as oil in a tanker. Gold in an vein is not as useful as gold in sea water. So the order in the mass of commodities has value like energy commodities due to making itself more amenable for energy to move. A.I. systems like evolution and economies use energy to move mass to make copies of themselves to repeat the process. More precisely, the historical position of mass and potential energy gradients cause matter to form self-replicating way. Genes, brains, and A.I. are not forces that do anything of their own free will, but they are the result of forces from pre-existing potential energy gradients that created them. They are enzymes that allow energy and mass to move in an efficient direction, not forces. The following is mathematically exactly true: Intelligence = efficient prediction = compression = science. I am referring to the "density" of each of these, not the total abilities. For example, science seeks to predict the most in the least number of bytes. The least number of bytes is known as Occam's razor in science and is the 2nd of two fundamental tenants of science. The first is that observations should have the potential to prove a theory wrong (falsifiability), and that those observations always support the theory (reproducible observations). So the 1st science tenant is prediction and the 2nd is compression or efficiency. Total currency in an A.I. system = bytes / time that are destroyed in CPU computations and memory writes. Every computation in a CPU and memory write to RAM or a hard drive generates heat and entropy. The theoretical minimal entropy per byte destroyed is S =kb * ln(2). kb is boltzmann's constant. The minimal heat energy created (the energy lost) is Q = Temperature * S. In economics, the "bytes" are "dollars" that represent energy spent like a CPU computation to create a mass of a commodity (like the storage of a byte). When we write to memory in A.I. we are creating value that can be used in the future. Typically the writes are assigning weights to the connections in neural nets or the probabilities to a Bayesian net or making copies of a gene in genetic algorithms. Bytes in evolution are DNA. The bytes in our bodies are cellular energy like glucose and energy stored in the crystals of DNA. Energy-based commodities are spent to create mass-based commodities that are used for an economic system to replicate (expand), just like evolution and A.I. Total currency is the total available commodities per economic cycle. Approximating a constant number of economizing agents like people or neurons in a brain or nodes in a neural net means that the currency is also a bytes per economic cycle per economizing agent. Agents compete for the limited number of bytes in order to increase the number of bytes per agent per cycle. Coins are bytes that represent a percent ownership of the total commodities available per economic cycle per person.
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coins = bytes = DNA = synapses = economically beneficial arrangements of atoms and potential energy

[12:33]
Or rather, the 1st four are elements in a computational systems that are used to represent and assign ownership of the last one.

## Friday, July 21, 2017

### A few random thoughts on Bitcoin and cryptoassets

The proportion of hash power a coin has for a given POW across all coins is probably going to be proportional to all real world assets that fall under the legal control of those coins that use that POW (that is hardware-constrained...if the same hardware can be be used on 2 POW's then in this context they are the same POW because the work is real, being the Joules to create and run the equipment). There's real value in being the biggest kid on the block because it makes it harder to break. 90% of alts right now could be destroyed if the largest pool of the largest coin (for a particular POW) decided to attack and forward timestamp every block to the max. Difficulty goes to zero and all coins are released (or as many as the attacker wants) in a few hours with only 60% hashrate. There's no fix. If they fork, he does it again. The motivation is to drive users to the big coin that he has been accumulating and he wants to retire instead of buying more equipment, not to mention constantly selling all the small alt coins before they figure it out and fork. This should eventually happen to all coins that have a halving schedule. So the underlying value is being the biggest kid on the block because it is the only kid that can't be "hacked". So side chains may displace alts. The cross swaps do not change this. They will stabilize to an exchange rate in accordance with it. If I'm right, miner economics could quickly reduce the playing field of coins that are truly peer to peer. The only alternative to being one of the very few biggest and baddest is the traditional central database. So BTC's biggest use would be between governments and banks that do not trust each other.

BTC value =(BTC FLOPS) / (crypto FLOPS) x (crypto assets) / (paper assets) ?

It needs to reach \$500k per coin to replace the world's \$10T M2+ dollar supply, but it's not a currency. But it will more likely find it's value in anchoring the value of other cryptos that will represent legal control of real-world assets. The world's assets are said to be \$223 Trillion. so it could not be worth more than \$10M per BTC (plus world asset value increases). But if someday crypto become the legal instruments representing ownership of the 1/2 assets, and 1/10 of them ultimately require BTC as a basis, then again I'm back at \$500k per coin. If it is both currency and asset, then \$1M per coin in an optimistic view. \$10k seems to be a decent exit point, but the trend and publics lack of knowledge says at least \$50k. So \$100k is not a bad guess as a dreamy max.

What's wrong with a BTC fork other than preventing us from getting more free money for nothing? I mean, if it doubles the number of coin so that new entrants can afford it and so that more transactions per second can be made, how is a fork not best for society? All currencies must expand as their use increases to keep constant value so that the terms of wage and price contracts remain valid. Economies should not allow a change in the value of it primary coin anymore than we should tolerate a changing definition of the Joule. All equations (contracts) are invalidated or require adjustment if there is a change. If it does not expand, the currency will not be used by new entrants who will go elsewhere. If its use is forced by government, then limited quantity coins create a 1% class.
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satoshi's:
I think he might have estimated that if it did absolutely everything he could dream of, then a Satoshi would be \$1 each in 2009 dollars. That would be \$200T, which was the world's 2009 assets. This is a reasonable distant hope because only the biggest blockchain can be the secure definition of truth because its miners could destroy any other non-3rd party, non-oracle chain with a 51% attack (or timestamp forwarding). Every world asset that wants to define its owner (or vice versa) in the most secure way without a central authority must reference a BTC transaction.
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The inability to inflate the references faster than the increase in world assets prevents the references from losing their value. The constant quantity aspect is kind of a cheat and marketing. Early adopters profit at the expense of late adopters to the "faith". Currency has always been directly connected to government / religion. It seems to be about deciding which "God" is in control of the assets via the references. Our ideas of "freedom" originate from the universal ancient tradition of debt cancellation. Bad rulers kept debt in place until the economies were chocked to death. The people would bring a new ruler (or religion) to power and he would erased all debt. That erased the power of the people who were in control and supporters of the previous ruler.
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reddit message sent to nullc (gmaxwell)
There is an unavoidable, unnoticed macro-economic reason for the fighting: Society wants and needs BTC to expand. BTC wants to fork. Devs think they are fighting to keep it together, but they are actually fighting because macro-economic principles want it to fork. I do not want to have to choose between alts. I want BTC, but I want it to expand with it's use so that it becomes a constant store of value. This will optimally help society by enabling me to write contracts that reference it as "joules of value". Even if it always increases, my renters and I can't use it because we don't know the rate at which it will increase in value. Destruction of joules via making and running hardware is not the defining aspect of "joules of value". This problem goes back to the inability of b-money to equal a basket of commodities as Wei Dai's indicated.
New users want lower price. Old speculators do not mind getting 2 coins for 1. Miners won't mind splitting up to get more coin even it if each is half price because hashrate competition is half. Everyone just has fear of the unknown, and a mistaken belief that capped quantity is best.
Some developers think they have a better idea when deep down they want central control and notoriety. Other's know they have a better idea. Both sides don't realize BTC wants a fork. Let the ideas compete. Let there be a fork and let the market place decide the relative value of each. I'm going to keep both indefinitely because they will settle to Zipf's law (#2 =~ 1/2 value of #1) as ETH crumbles from not following Satoshi's axioms of simplicity and non-3rd party timestamp.
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You can derive all characteristics of an ideal money from one underlying goal: constant value. An approximation is a basket of commodities. Going deeper, this approximation is based on the "joules" required to construct and run the commodity-producing equipment. But the "joules" is not exactly a physical measurement. It includes a "difficulty" factor that society has in acquiring and utilizing them. More precisely, it is Gibbs free energy. This may not be the ultimate measure because there is an "efficiency" aspect in how it's used even if the machine is 100% efficient in converting it to usable energy. There might be a subjective nature to how people need to define "constant value". The currency at least needs to expand with the size of the economy to keep constant value. The ultimate goal is to keep the terms of contracts valid. But there is something else just as important: it needs to slowly devalue so that hoarding is discouraged and investment is motivated. This prevents successful participants from relaxing. Evolution does not seek fairness. It seeks power. The most efficient participants retiring is not the goal. It is just a carrot to motivate them. Slow devaluation is a way of erasing old debts which drives a rejuvenation of economic activity, redistributing wealth away from the 1% who naturally use wealth to guide markets into corners or to simply loan out at interest above the rate of coin inflation until they own all the coin via the "magic" of compound interest, further stifling growth from lack of coin and having more people to come beg for a loan.

But the initial and short term goal is constant value so that CONTRACTS have a reference point that is exchangeable between all other contracts in any given legal system that is securing law in a marketplace. The value should be constant in space and time, with some caveats like the needed inflation above, and remote places that do not have a large and diverse marketplace (the coin will have more value there).

That is the background you'll need to understand the following. If BTC is going to be a currency instead of an asset (which provides the backing for real currencies), then it needs to fork as its use expands in order to maintain constant value, or it will have to let alts take away a greater and greater share of the growing cryptocurrency market.

So your point is correct only if BTC is going to be an asset. Let currencies reference it in large quantities in a slow manner in something like the lightening network. Assets and currencies are diametrically opposed if the asset has a capped quantity. BTC and everyone who will use it and currently holds it want BTC to fork into many coins to maintain constant value if it is going to be a currency. That is the underlying cause of the arguing.

I think you failed to appreciate Nash's "value stabilization". Bitcoin is not a commodity. The joules needed to construct and run the mining equipment are a destruction of value but real mining adds value. A real stable-valued commodity is not one that is not going to dry up in the near future. It stops being a commodity in a useful currency sense when that happens. Granted, BTC as a commodity has a lot of features like gold: expensive to mine verses its economic utility and largely capped in quantity (at least without a new tech advance in gold mining). But this is why gold is more useful when a law-abiding marketplace is either non-existent, stagnant, or dying. Growing economies do not need or want gold except as a safety hedge against disaster (see previous sentence).
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I disagree that a measure of value in a market place is unavoidably arbitrary. If the "Gibbs free energy" connection is not fundamentally correct, the basket of commodities is pretty good. I believe it (or both) are founded upon letting the currency quantity (adjusted for velocity) be proportional to either the total non-artificially inflated assets in an economic system under its control which might be proportional to the "important fluid assets" of some sort (like the commodities). I think by being proportional to what a group of people have under their "total relative control", it gives a gut feeling to how people define value. If they become rich in having more assets nuder their control then it takes a larger quantity of the currency to feel like it has the same value. This breaks away from a direct joules measurement, but it leaves open the possibility of a joules per joules measure. The joules of value a constant-value coin represents is a proportion of the total joules of value in a society.
The size and efficiency of their commodity-producing and delivering infrastructure should stay proportional to that wealth. If the commodity machine starts struggling to meet demand and prices rise, then the coin is deflated to encourage investment in commodity infrastructure while reducing the strain on commodity production. Then there is the converse.
This discourages economic bubbles. Better commodity-based economics enables larger armies to destroy other economies. Democracy subverts capitalism towards higher commodity production instead of concentration of wealth.
This seems to break away from the joules/joules measurement, but I have a out: an ideal currency should not be a direct joules measure as I initially said, nor the proportion. It should be also divided by the number of people. If commodities got scarce, there is the implication there are too many people for the commodity infrastructure. The commodity infrastructure should be valued relative to the number of people. So the coin is restricted with the commodities to make them both retain the same price (to keep contracts valid) and this makes people have less coin (worth less) and thereby work harder for the commodity production.
I've been trying to discover the connection between evolution, economics, and all other adaptive learning "machines" for years. Here are my latest tweets in this effort. I should point out all machines replacing biology are doing so because they are removing oxygen from metal, silicon and carbon "ores" which results in a far lower entropy per mass of the economic machine. Hardness and reliability are deeply connected to lower entropy per mass. There may be a connection between entropy and coin I have not discovered. Gibbs free energy touches upon it because GFE= joules + pressvolume - entropytemperature which is "energy available for work". So I'll consider the possibility that entropy per mass decrease we are witnessing in our evolving economic system should be connected to a reducing quantity of coin per person.
My last tweets:
Local heat/noise fluctuations under gravity/coin constraints discovers greater systemic efficiency when energy comes in & entropy goes out.
Economics, evolution, & learning are closed but not isolated thermodynamic systems. Energy in, entropy out. Entropy per mass reduces.
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If you shake a jar of objects that are in a gravity field, the objects will compact. Compaction is a lowering of entropy when all other variables are the same. Entropy is conserved. The excess entropy escapes during the shaking as low-energy black-body radiation photons as a result of a heat increase from the shaking energy and friction. Energy was converted to lower entropy in the jar, plus even more entropy that was released as the heat escaped.

In evolution, the shaking energy is the Sun and moon. I've written on the importance of the moon to life on Earth. The mass on Earth is constrained to the surface which is the jar.

In economics and A.I. energy obviously is coming in from the outside, and heat is escaping. There is also a lowering of entropy per mass as in the jar and evolution. Law and Earth are the jar. Currency is a conveyance of energy between participants in accordance with the constraints. To allow greater compaction in a jar, sometimes you need more room for new positions to be discovered. In A.I. they periodically relax variables so that they can take on different values before they are slowly constricted again. This enables it to get out of non-optimal solutions. There is also a redistribution of wealth at times in A.I. to make sure it does not get stuck in local minimums (the 1% taking over).
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The end game of currency will be a trust network where your reputation among friends and past buyers/sellers is the amount of currency you own to purchase things in the future. You can't lose your keys because your reputation is stored on the network. It's not centralized in any way like bitcoin, except for the protocol people should agree on. Complete anonymity is not possible, but only sociopaths don't have any friends and don't deserve any currency. A super-majority of friends can rat you out or give your keys back. You can't exchange with strangers until the network grows tentacles via 6 degrees of separation. You are penalized if a friend cheats and vice versa. You can have multiple identities but it means you would have to split friends among them, not getting any net benefit except fall-back security and dispersion to distant networks. There is no currency except how friends of friends of friends etc choose to score your reputation. There's no profit to being a dev or adopting early. There's huge profit in not being anonymous.
your FB and Amazon "upvotes" would be carried over by FB and Amazon using the correct XML interface. And if they don't, then companies that do adhere to the protocol to open up the data they're collecting to your friends would win out
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DNA = blockchain w/ many forks & new genes = new coins (virus-induced?). Genes = environment's currency to economize resources 4 negentropy