Expanding the Unchangeable Paramters of Bitcoin As Its’ Utility

The significance of this general conjecture, assuming its truth, is easy to see. It means that it is quite feasible to design ciphers that are effectively unbreakable. ~pg.7 https://www.nsa.gov/public_info/_files/nash_letters/nash_letters1.pdf

A Special Conjecture Is Born

This was in the letter John Nash (seemingly frantically) wrote to the NSA in regards to the design to an encryption machine he sent to RAND. But I think that this is not a full understanding of his intellectual realization/break through he had. He goes on to explain:

As ciphers become more sophisticated the game of cipher breaking by skill teams, etc., should become a thing of the past.
The nature of this conjecture is such that I cannot PROVE it.
But this does not destroy its significance. ~Nash’s letter to the NSA continued

What we should understand is it wasn’t up until the advent of bitcoin that decryption became a thing of the past, and since Nash’s conjecture there has been a race in this regard up until this (near) equilibrium bitcoin represents.

I’d like to explore this in relation to the block-size debate, that many people seem to have such a hard time understanding.  They don’t understand why Satoshi put this limit on bitcoin in the first place, knowing it might be so difficult to change in the future.  They don’t understand Szabo’s views and basically silence on the issue. They don’t understand why the debate isn’t simply solved by raising the block size.

A Different Side of the Debate From a Different Perspective

I want to view this problem from a different perspective.  The widely held view that bitcoin is to be a coffee money for all peoples to use cheaply may not be the only possible usefulness that bitcoin COULD posses. Rather there is a type of core (different than the technical definition of “core”) stability I would like to express.

Some or most of us might understand that one of bitcoins allures and power is in its finite amount of coins, much like an extension of its incorruptible and immutable ledger. IF the number of bitcoins could be (or more to the point was!) changed, and especially if it was politically corruptible in this way, then the currency would be no better than existing national Keynesian currencies we have all grown to hate (but accept!) today.

In this, and from this perspective, we could see that part of the value of bitcoin (depending on how we view it) relies on the secureness of the consensus of this and other parameters. The real difficult here is where do we draw the line between that which should be changed and that which should never be changed?

This is exactly how I want us to observe the block size debate, not as “what size is optimal for bitcoin”, but rather where should the stability of change vs no change reside.

Here then I can make a sort of conjecture much like Nash’s but in a slightly different context:

If as a community we change bitcoin’s block size, then it MIGHT be that bitcoin’s inflation schedule comes up for debate.  HOWEVER, if as a community, we decided by concnesus of the markets, that bitcoins block size should never again change, because of an understanding of the want to hold together bitcoins key core properties, then the conjecture is that bitcoins inflation schedule will NEVER come up for debate.

Many people believe (based on pre-concieved notions!) that bitcoins’ value IS, and MUST BE, from it’s utility as an ultra cheap and highly transact-able currency. But what most people don’t seem to realize is the obvious likelihood that when Satoshi set the 1mb cap, he knew this difficult debate would lie ahead of us:

satoshi1complainer 1complainer2complainer3

I remember Gavin in a video I’ll try to find suggesting he really wished Satoshi didn’t put this cap on.  A lot of people seemingly feel the same.  Some people are also calling for an authoritative view which neither Satoshi or Szabo seem interested in publicly expressing. But we do have access to some sentiments:

What other use could a commodity with an unchangeable core amount of parameters have for our society?

We of Terra could be taught how to have ideal monetary systems if wise and benevolent extraterrestrials were to take us in hand and administer our national money systems analogously to how the British recently administered the currency of Hong Kong.~Ideal Money

In Nash’s opinion, society has always been in search of an incorruptable basis for which different culture’s and divisions of our civilization might use as an economic basis for cooperative gain. Historically (he points out), gold has served this purpose in the past but for various reasons we seemed to have evolved beyond its utility for this function:

Clearly, in terms of this geographical perspective, gold has historically been optimal, largely because the labor cost of moving it over great distances is so small relative to the value of what is being transported.  Thus, gold formed a very efficiently movable medium for the transportation of a value exchangeable for other values, ultimately deriving, in one way or another, from human labor (with the achievements of warriors here also being viewed as involving labor).
(i) The cost of mining gold effectively does depend on the technology. Recent cyanide leaching techniques have made it possible again to profitability mind gold at formerly abandoned sites in the U.S. so that it is now a big producer.  However, the unpredictability of the cost is a negative factor.
(ii) The location of potential gold-mining locations may not be “politically appealing.” so it would seem undesirable to make a political choice to enhance the economic importance of those particular areas.
(iii) There is some negative psychology about gold such that even if it were the most logical choice after all, the unpopularity of the idea could be very obstructive.

We might see MY general conjecture here.  Putting this altogether it seems that there are in fact wise and benevolent “extraterrestrials” here (or perhaps extropians!), who seemed to have, in one way or another (at least implicitly) colluded to administer to the peoples a type of incorruptible money like that of Hong Kong that Nash alludes to.  In this bitcoin is not meant to be Ideal Money, but rather bitcoin was presented as the possibility of Ideal Money, which grew its network over time.

In all reality we seem to be slowly realizing that Satoshi left us with a Gold 2.0: A new standard for which each of the Keynesian, centrally banked, and national fiat currency will be forced over time to use as a benchmark for the standard of what may or may not be “Ideal”.

In this the entire block size debate becomes not a search for the optimal parameters for an Ideal Money, but rather like an attack on its own core security. It becomes a learning lesson for all as to what it is Nash described as not Ideal Money, but the “asymptotically ideal” form of it (a global money system that gets more and more ideal over time!).

We might understand why Satoshi innocuously left us with no guidance to such a difficult debate, and we might understand the seemingly disinterested disgust by Szabo in regards to the recent proposal.

I think we can better understand Andreas here as well, who seems to understand the Ideal or optimal parameters might not be what is important in this debate, but rather any form of stability of consensus in regards to the things that are further and further from the core features that make bitcoin favorable (ie 21 million coins!)

Why is Nash’s “NSA” Conjecture Significant?

The relevance and significance here is that from the view I have described there is a conjecture that although bitcoin’s core principles THEORETICALLY can be changed, that the actuality of it is they cannot. There can be no actual proof to this since the ultimate knowledge needed must be proceeded by this machine which bitcoin is ultimately the implementation of. So what we are observing and participating then is really the living breathing embodiment of Nash’s conjecture to the NSA.

The interesting observation here is that Nash came up with the concept for “Ideal Money” shortly after these letters and a few other auspiciously related economic, mathematical, and game theoretical realizations.  This was all shortly before he was twice confined for allegedly being insane for proclaiming he was going to save the peoples of the world from their colluding governments (he fled to europe to exchange his money for the swiss face, a currency of more ideal quality he thought).


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