Knut Svanholm

@knut.svanholm

On Emergence

Some concepts in nature are harder for us humans to understand than others. How complex things can emerge out of simple ones is one of those concepts. An termite colony, for instance, has a complex cooling system in its lower levels. No single termite knows how it works. Completely unaware of the end results they build complex mounds and nests, shelter tubes to protect their paths and networks of subterranean tunnels to connect their “cities”. Everything seems organized and designed but it is not. Evolution has equipped the termite with a pheromone receptor that tells the termite what task he should engage in by simply counting the amount of neighboring termites doing the same thing. If there’s a surplus of workers they become warriors and so on. Complex structures emerge from simple rules. The fractal patterns found all around nature is another example. Fractals look complex but in reality they’re not. They’re basically algorithms. The same pattern, repeated over and over again with a slightly modified starting point. The human brain is an excellent example of a complex thing evolved out of simpler things and we humans still have a hard time accepting that it wasn’t designed. Religions, which themselves are emergent systems spawned out of human interaction, have come up with a plethora of explanations for how we came to be. All sorts of wild origin stories have been more widely accepted than the simple explanation that our complexities just emerged out of simpler things following a set of rules that nature itself provided for them.

Complex systems emerge out of human interactions all the time. The phone in your pocket is the result of a century of free global market competition and no single human could ever have come up with the entire thing. The device, together with its internet connection, is capable of a lot more than the sum of its individual parts. A device that can grant instant access to almost all of the world’s literature, music and film that fits in your pocket was an unthinkable science fiction a mere twenty years ago. Bitcoin, first described in Satoshi Nakamoto’s white paper ten years ago, was designed to be decentralized but it wasn’t until years later that the network started to show actual proof of this. Sound money, or absolute digital scarcity, emerged out of the network not only because of its technical design. How Bitcoin’s first ten years actually played out plays a huge part in how true decentralization could emerge and this is also the main reason as to why the experiment can not be replicated. Scarcity on the internet can only be invented once. Satoshi’s disappearance was arguably the first step towards true decentralization. No marketing whatsoever and the randomness of who hopped onto the train first was another. Bitcoin truly had an immaculate conception. The network has shown a remarkable resistance to change over the last few years especially and its current state might be its last incarnation given the size of the network and the 95% agreement threshold in its consensus rules. It might never change again. In that case, a new, complex life form has emerged out of a simple set of rules. Even if small upgrades are implemented in the future the 21 million coin supply cap is set in stone forever. Bitcoin is not for humans to have opinions about, it exists regardless of what anyone thinks about it and it should be studied rather than discussed. We don’t know what true scarcity and a truly global, anonymous free market will do to our species yet but we are about to find out. It is naive to think otherwise.

Various futurists and doomsday prophets have been focused on the dangers of the impending A.I. singularity lately, warning us about the point of no return, where an A.I. can improve itself faster than any human can. Such a scenario could, as news anchor Ron Burgundy would put it, escalate quickly. This may or may not be of real concern to us but meanwhile, right under our noses, another type of unstoppable digital life has emerged and it is already changing the behaviour and preferences of millions of people around the globe. This is probably bad news for big corporations and governments but good news for the little guy looking for a little freedom. At least that’s what those of us who lean towards the Austrian school of economics and libertarianism believe. This time around, we will find out whether this is the case or not. No one knows what it will lead to and what new things will emerge out of this new reality.

Unlike the termite we humans are able to experience the grandeur of our progress. We can look in awe at the Sistine Chapel or the pyramids and we can delve into the technicalities and brief history of Bitcoin and discover new ways of thinking about value along the way. Money is the language in which we express value to each other and now that language is spoken by computers. Value expressed in this language can’t be diluted through inflation or counterfeiting any longer. It is a language that is borderless, permissionless, peer-to-peer, anonymous if you have the skills, unreplicable, completely scarce, undilutable, unchangeable, untouchable, undeniable, fungible and free for everyone on earth to use. It is a language for the future and it emerged out of a specific set of random events in the past.

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