26 Oct 2008
What is money ?
This , funnily enough , is a Hard Question , both in the ordinary and the mathematical sense . It is linked to any sapient past and future .
We try to sneak up on it by looking at what it is not .
1.Money is meaningless to a lone individual .
You cannot eat a coin or a diamond or a note . It only has value if you can interact with another individual and trade .
This sounds trite , but it immediately enables us to apply the powerful algorithms of Artificial Intelligence (see http://andreswhy.blogspot.com “ Artificial Intelligence” et al .
Money can be described as a language , defining the AI’s (humans) . We all know people whose main sense of self comes from money .
2. If it can’t be counted , it’s not money .
The basis of the long love-affair between science and business .
“If it cannot be put in numbers , it is not Science”
Trade implies repetitiveness over either time or space dimensions . This implies delineation . No fuzzy currencies , thank you .
Since even bacteria can count ( eg quorum systems) , it might be profitable to look at them in monetary terms .
How much will it cost to pay an infection to go away ? A cancer to de-metastize ?
We suspect that large part of the success of the immune system is due to payments of this sort .
3.If it can’t be exchanged for some other currency , it is not money .
The exchange mechanism forces abstraction . Regardless of how many dimensions the currency operates in , there is always one outside it .
(A direct consequence of A plus non-A less than Universum) .
So , any currency must be an abstraction .
Without the Market , there is no money .
This is actually a restatement of Item 1 above , but in terms of groups .
Seller A shops around for the best countable value . But he can only shop around if there is a group of sellers with a spread (uncertainty) of selling prices . The same is true of sellers . This creates the Market .
Market-mechanisms are created by traders watching each other and trying to outguess each other . Infinite sequences are established , especially in time .
This creates the mathematically hard part .
This enables the powerful , symmetry-breaking algorithms as set out in
“ Financial Crisis 2008 : Exchange Rates “ and
“Facebook , ExchangeRate and the Singularity”
4. If it is not a mathematically Hard Question , it is not money .
This means that if there is no uncertainty (risk) , there is no money .
The proof of this is obvious . (It follows directly from Item 3 above)
Second-guessing by both sellers and buyers might have some very fancy mathematical terminology , but they all depend on a measure of uncertainty (the price spread on beth(0))
Hard Questions here is used in the sense of problems whose solutions need computation resources that grow faster than that available to the applicable society .
Computation resources are defined by AI(m) as previously described .
See http://andreswhy.blogspot.com “Artificial Intelligence” , et al
There is a relationship between computational resources and bandwidth .
Increased bandwidth means an increase in m of AI(m) .
The mere existence of money is a powerful evolutionary force , increasing the bandwidth between segments of AI(x) .
Time-binding (like future promises , interest , etc ) stitches together the fabric of Social-Capitalism . How individuals can work together for the greater good (Adam Smith’s “Invisible Hand”)
Because humans are Beth(n>1) , if they are in the loop , they can always think up a scheme that reduces risk .
This involves heavy computation . We are now (2008) living through the wreckage of a period when ALL financial institutions tried to reduce risk to zero .
Reduction of all risks to zero is not possible to any sapient that uses the Axiom of Delineation .
Bounce Back (2008)
The bounce-back will be interesting . Hundreds of thousands of AI(3.0x) individuals are suddenly at liberty to explore different avenues .
See http://andreswhy.blogspot.com “Facebook , ExchangeRate and the Singularity”
Refer to the Eastern Europe bounce-back after the collapse of Communism .
This collapse of Capitalism will be seen as essential to the Singularity .
Pathways discouraged by capitalism will be aggressively explored by social-combines co-ordinated through high-bandwidth peer-systems such as Face-Book .
The Low-Countries’ (Netherlands , Belgium) after the collapse of the Western Roman Empire .
Well , all money is virtual . So-called hard currency like gold simply quibbles about the rate of exchange . The essential point is agreement amongst groups of entities to have a reasonably stable value that can have reasonably stable exchange rates for goods and services , other currencies , and a degree of uncertainty . These are elements (1,2,3,4) above .
As can be surmised , Item 4 is the problematic one , since it is open-ended .
Linden Dollars are now one of the few virtual currencies that have convertability , but this is set to explode .
“The Next big Thing”
Multi-dimensional currencies amongst various virtualities will evolve .
Values which cannot be expressed in dollar terms (ie favours) , but which have countable values and exchange-rates with other currencies .
Parallel-Processing Groups will make their Attention available at a multi-dimensional price .
A creative FaceBook Group Alpha might sell its future Attention on an Exchange .
(This is already being done in embryo form by virtual markets on decision points .)
The Attention of the FaceBook Group Alpha is split pro-rata to the shareholders’ interest .
The system is inherently parallel-processing .(Why the Attention can be split)
Payment is on negotiation in terms of various currencies of the problem .
A futures market on the various currencies of FaceBook Group Alpha is inevitable , per currency and per FaceBook Group .
As you can see , things are about to get very complicated in a hurry .
Dollars will not be the only currency .
$Newness , $interestingness , $meaningfulness , $for-the-hell-of-itness are some currencies that spring to mind . They still have to be quantified and a range (uncertainty) of exchange values established .
(Something like this has happened many times before in aristocracies , but they never had mechanisms of quantifying it , and , more importantly , establishing exchange rates .The casualty was innovation . The remnants were favours .)
The same as above , only more so .
The interesting thing is that the run-up to the singularity is smooth .
Will this be true of every sapient civilization ?
We refer to Pohl’s Question : “Where are they ?”
Planets are nurseries .
We can say that any sapient civilization that uses money will have smooth run-up to the Singularity .
The question is whether there will be any high-tech remnants after the Singularity .
The answer is usually no .
A responsible civilization will let stay-behinds alone on a replenished planet .
But there is not enough money of various currencies to sustain the infrastructure .
Not enough $Goodwill , $Innovativeness , $Caring , etc.
The society devolves .
Remnants of irresponsible civilizations that allowed replication machinery to remain are gently reminded by the introduction entropy viruses into their replication processes . (Older civilizations are still around)
In any case , it is extremely doubtful whether a Beth(2) civilization could create an entropy-free structure . And immature civilizations usually go into singularity on beth(2) levels .
Any expansionist civilization will sooner or later run into a civilization close to the singularity and get smashed for their pains .
To put it into Earth-understandable terms : there can be no forced empire if everyone has nuclear weapons .
The critical thing to watch out for are the exchange rates . Once exchange rates between “Innovativeness” and some realizable value is established , the system will explode into a positive feedback loop . (This has happened before to a lesser degree with the establishment of the Patent Office in the early US.)
See http://andreswhy.blogspot.com “Infinite Probes” and other arguments .
(Universum minus (A plus non-A) ) is mined for insights . Creativity abounds .
God’s Snowball :
God is the ultimate snowball .
He put his thumb firmly on the scale through the Distributive Axiom of ArithII .
To recapitulate the Distributive Axiom of ArithII .
That xy term is the killer . If x and y are both negative , xy is positive . This breaks the symmetry . Any exchange rate is a multiplication of terms .Symmetry is broken in any exchange rate in an ArithII system .
The underlying system has a tendency to increase at any iteration . The snowball grows bigger . As described , if one integrates it over infinity of values it is 2/3 of basic value .
This is the added value of all the interactions.
This ties in with http://andreswhy.blogspot.com “Infinite Probes”
The basic observed value has a reserve of 1/3 of the value . This has immediate physical significance with quarks .
Any Universe that has money , has symmetry breaking on exchange-rates in purely physical particle-particle terms . This leads to quark electric charges of multiples of a 1/3 , as well as no negative mass (unless in carefully structured environments) .
A good example of how top-level feedback mechanisms are related to very low-level mechanisms .
Also why singularities are inevitable . Increasing complexity and wealth is built into this Universe .
Humans have to work hard at screwing it up , and so they do with great enthusiasm .
One of the great Reality Shows ..
Human growth rates .
God can thus use financial growth rates to estimate how things are going , without having to count where every sparrow falls . Which is handy . Not only for God , but for humans as well , anxious to know how they are doing vis-à-vis God .
God went to great pains to create an inherent 2/3 gain in the system . The system is fractal . Being fractal , a third of this has a beth(2) probability (2/3/3=0.2222) . Another third has a beth(1) probability (0.074) and another third has a beth(0) probability (2/(3^4)=0.02469)
Interesting is that a beth(-1) probability has a growthrate of (2/(3^5)=0.0082)
Beth(0) means normal chance . Beth(-1) means determinism : a command economy .
Social-Capitalism (China) fluctuates between 7.4% and 22%
Pure Capitalism (USA) fluctuates between 2.5% and 7.4%
Pure Socialism (Cuba) fluctuates between 0.8% and 2.5%
You can see where things are going .
There is room at the top . Call it FaceBookism
FaceBookism fluctuates between 22% and 67%
Going into the Singularity .
The Hoag Rating .
(From “The unpleasant profession of Jonathan Hoag” by Heinlein .)
If you were a Universe Critic , how would you rate our universe?
On a scale of one to five .
I would rate it a two .
It is insufficiently challenging .
The light-speed barrier between solar systems make nice crèches , but does it really prepare a youngling for diversity ? Ditto the absurd conservation laws . Even the indigenes have to use ridiculous make-believes like “potential energy”
The locals even have a term for it : Beta-testing by the user .
As contradictions are observed , the physical laws are patched .
And so it goes .