Value Networks and Bitcoin
In order to fully grasp the disruption that Bitcoin will cause, we need to first grasp the concept of a “value network”, and how these networks tie to thermodynamics.
The most notable value networks are those of fiat currencies, with the US Dollar sitting at the top of the heap.
By using the US dollar as a unit of account, we can thus say that:
- The US Dollar Value Network is valued at 30 trillion dollars.
- The Gold Value Network is valued at 9 trillion dollars.
- The US Stock Market Value Network is valued at 51 trillion dollars.
- The Global Real Estate Value Network is valued at some very high number.
All of this value, due to the Game Theoretics / Physics of the Bitcoin Value Network, will flow into Bitcoin. Why?
It all comes down to the thermodynamics of having a closed value network. In fact, the only reason we have multiple networks that we use as a store of value, is because we have not yet been able to come up with a thermodynamically closed system to begin with as a store of value.
The effects of having an open value network, the way fiat currency is, essentially leads to the creation of other value networks meant to preserve energy.
On the other hand, having a closed value network the way Bitcoin is, means that energy doesn’t leak! It doesn’t need to find a better store of value.