The Infinite Loop

Every passage, on the record.

1. 00:00Claim

   A solution creates problems and humans are the apex problem generators in the known universe. No one, no entity, no form of life is better at generating problems than human beings.

2. 00:00Reference

   That is why we are collectively the extended order. We are the tip of the extended order spear.

3. 00:30Idea

   And when the need is satisfied with a solution, that creates problems. And this reality, this problem solution problem spiral is what we are going to take a look at today.

4. 01:06Claim

   We have hit a wall with the dematerialization of everything. As we move into the digital realm, where costs go to near zero, we come up against a problem. And that problem is information generation in the digital world doesn't have to deal with the friction of the physical laws of the universe.

5. 01:37Open question

   So the question is, who will generate problems in the digital realm? A world where scarcity before Bitcoin was completely non-existent. In the digital realm, there was no scarcity. And if there is no scarcity, where is the need?

6. 01:37Reference

   In the past, we've talked about in the book, The Nature of Technology by W. Ryan Arthur Clark, he uses the word technology where I would and have used in the past the word information.

7. 02:08Claim

   The first being that all technologies are combinatorial... you can't build something out of something that doesn't exist before... It takes information to generate more information. You have to generate the new information out of information that already exists.

8. 02:41Claim

   All the elements of a technology are they themselves technology... it has to be made up of different subcomponents, subsystems. And then finally, he says that technologies use phenomena to some purpose, natural phenomena to some purpose... that purpose is increasing energy reserves.

9. 03:15Quote

   Technology and therefore information and therefore order is really what it's doing is it's the programming of nature, physical products program nature.

10. 03:50Claim

    The needs come through not being able to fulfill some desire... And what we find more acceptable is where we have access to more energy than before we started to process. So we're looking for energy reserves.

11. 04:21Analogy

    If you're playing a video game or something, you'll be familiar with the idea of a checkpoint, which means you get up to a certain level and you never have to restart below that level. If you have access to that information layer, you don't have to go below it because all the work has already been done.

12. 04:58Claim

    As the number of possibilities grow, so too do the number of arrangements made possible with the addition of each new piece.

13. 05:30Reference

    We've done entire episodes on this idea in the past. I think it was a few episodes back, something called Legos, something, something, right, this idea of these building blocks.

14. 05:30Claim

    Internal replacement of parts and structural deepening takes place whereby every single tech component that harnesses that phenomena, it is made more efficient... every single subsystem, every piece of every subsystem is pushed to its absolute limit.

15. 06:43Claim

    There is a slowing of this internal replacement or this structural deepening... you could say that the tech reaches at least a temporary maturity. Progress slows, which means efficiency gains require more input for ultimately less output... this is the lock-in effect.

16. 07:21Claim

    Fiat money is not as efficient in energy terms as Bitcoin, but because the surrounding ecosystem that is built on Fiat is collectively embedded in that Fiat system and it relies on it to build off, adoption is significantly slower to adapt this new thing that is more efficient.

17. 08:01Claim

    If those other systems have not already been built up, the friction to change wouldn't be near as high. Friction causes more inefficient tech to remain viable for longer.

18. 08:01Reference

    If you read Matt Ridley's book, what is it called? How innovation works, I think is what it's called. You hear the story of each major innovation over the years.

19. 08:33Claim

    There's some crazy inventor that comes up with something and instantly it takes over the market... but then you hear the actual stories and time again, it's the exact same story played out over and over again... it takes forever, at least to the individuals that are going through that process, to eventually be proven correct.

20. 09:08Claim

    Information accessibility is increasing at such a rapid rate. It's gone parabolic. The ability to access information and also generate information, that that is going to change. And that's why things feel like they're getting quicker and quicker.

21. 09:43Claim

    Adaptive stretch takes place. This is where the old tech is stretched to make the new tech work because there's a lag between the introduction of a new tech like Bitcoin and the surrounding subsystems.

22. 10:15Analogy

    You can think of something like Africa and landlines versus their adoption of the mobile wave. Countries in Africa completely bypass the investment that Western countries made in old tech... they could completely skip that architecture. They fast forward straight to the mobile wave.

23. 10:46Claim

    The amount of time between tech maturity and lock-in to a new emerging tech, that determines the speed of adoption on the other side of innovation. And unfortunately, money has been artificially hamstrung.

24. 11:16Claim

    It's been debilitated by governments since the advent of the modern fiat money... the subsystems have experienced so little disturbance, so little force to change, that their tech adoption will take much, much longer because they don't have the practice.

25. 11:52Claim

    When the tech itself can't become more complex or cannot become more efficient, what happens is instead the subsystems themselves are forced to become more complex. So those things need to solve the problems that the underlying technology cannot solve.

26. 12:26Quote

    When you finally understand Bitcoin, it seems incredibly simple in comparison to the workings of the fiat system, because the fiat system has to deal with the complexity in its secondary layers.

27. 12:56Claim

    What happens when the simple replaces the complex is that the simple doesn't meet all of the needs of all of the actors. And then so what happens over time is that complexity ensues to make the tech work and to stretch it further and further, and that's all fine until a brand new principle comes along.

28. 13:30Claim

    The new tech might replace the old base layer, but people think it has to replace the entire ecosystem, the entire set of subsystems, at the same exact time... if you don't understand this process, you don't realize that's simply not how order evolves.

29. 14:07Claim

    No entity can have enough Bitcoin. So it is the only information that can't be copied or duplicated. And it's absolute scarcity for the very first time.

30. 14:42Quote

    These problems need technological solutions. So this process is recursive. Technology references itself. And this is the infinite loop.

31. 15:15Analogy

    Those solutions come about through combinatorial evolution of the ever expanding arsenal of pre-made information, of information that is now a layer below, which is built upon the information two layers below. An ever-growing pyramid of order that uses the previous blocks to generate the future blocks.

32. 15:52Claim

    Everything around you is technology. It is all the physical embodiment of order. It all required energy to generate that order.

33. 16:23Claim

    Think of all the technology that must be in place to generate the leverage that the reach of information now has both physically and across time.

34. 16:56Claim

    One person, one order generator, combining vocal cord manipulation and adherence to a protocol... which is the English language. I can do it once and I can have it live forever and consumed by the world and beyond... at what is essentially near zero energy cost.

35. 17:26Quote

    The positive feedback loop, you see that this isn't stopping. It's self-generating growth. It is the autocatalytic nature of technology.

36. 17:26Open question

    So the question then, if we know all of this and we are aware of it, is then are we creating it or is it creating us?

37. 18:01Claim

    Generating information has gotten more efficient over the technological iterations. But what has moved the needle the most in the recent past has been the storage of the information and the accessibility of that stored information.

38. 18:34Claim

    It's normally the collective action of all of the subsystems that allow the emergent properties of the complex system to come into being.

39. 19:04Analogy

    There is the extended order that is collective hive mind of human activity. Then there is the individual human... and then below that, what are the subsystems that make up the complex system that is the human being?

40. 19:38Claim

    We control very little of the internal processes that allow our existence. We cannot make ourselves sleep, we can't make ourselves feel hunger. A subsystem reacts to stimuli and exchanges information through signals that are then activated to change our state.

41. 20:12Claim

    It is technology all the way down. It's ordered information all the way down. Why wouldn't it be all the way up as well? Why stop at human order generation?

42. 20:42Claim

    In this digital world, what are the needs that will spurn the solutions that will in turn cause the problems? There's zero cost of energy. When there are no physical laws to govern transformation, how can value even be determined?

43. 21:17Prediction

    Let's just say that artificial intelligence continues on its path to the creation of some super AI body. Well, the problem generators of the AI body will be the extended order... The compute that is the artificial intelligence, it can't interact with the physical world. So it relies on us to direct transformation and order generation.

44. 21:49Analogy

    Much like the liver cell can't know that we exist, it just generates order locally, and the excess reserves flow upward, up the ladder to the higher order.

45. 22:20Claim

    The digital world needs a system for understanding utility, it needs a system that introduces scarcity, so as to generate problems. And that problem is Bitcoin, where Bitcoin flows is where solutions can be generated. AI systems will use Bitcoin as a signal for where to invest energy in compute and problem solving.

46. 22:51Claim

    For the higher ordered life to exist, it must interact with a system that can harness the physical world. It has one need, energy. But if energy needs are met, then how can it continue to generate order?

47. 23:21Analogy

    You can think of it like scarcity acts as a rudder. It's a rudder on a ship. Without it, the ship goes around and around in a circle, blows wherever the wind goes. Scarcity as a rudder means that the heading is towards increased order.

48. 23:54Claim

    There's nothing to say that information and order peaks out at the extended order. That cannot be the peak... a higher level than that is something higher.

49. 24:59Claim

    The body doesn't react to the action of the individual cell. It uses the collective output of the complex subsystem to generate higher order technology that is independent on the lower layer to feed energy up the ladder.

50. 25:32Quote

    Bitcoin is the bridge to the lower ordered physical meat space, like the connection that takes energy from a lesser order state and allows it to flow up into a higher order state in the informational realm.

51. 26:16Claim

    If I was the smartest entity to ever exist, I would look for a way to interact with the physical world to ensure my survival... I'd have to find a system that acted as a bridge where I could affect what I can change to alter the outside world, the one that I cannot touch.

52. 26:53Claim

    Will it trade Fiat dollars for power?... That gives the Fiat actors enormous power over it to control it... these states or these governments could just simply cut off the rails to the power by zeroing its account.

53. 27:37Quote

    As intelligence scales, you still cannot work your way around Bitcoin because you have to have access to the energy. It's not just intelligence, it's energy. And if you don't have the energy, you don't have the Bitcoin. So it keeps super intelligence in check by grounding it in the physical world of energy.

54. 28:12Claim

    A wall that requires physical energy to scale that even the most powerful AIs can't overcome because they lack the physical energy to do it. You constrain the near costless digital world by tying it to the physical energy game.

55. 28:47Claim

    It's going to have to pay for the energy. So it's going to feed Bitcoin back down into the system for access to that energy in the physical space.

56. 29:49Quote

    Bitcoin creates the problems. AI needs energy. AI needs Bitcoin to get that energy. To get Bitcoin, you're going to need to generate order. Once order is generated, Bitcoin will flow.

57. 30:23Prediction

    These things are going to accelerate faster and faster and faster and faster. So you can't look back necessarily at past innovations and say, this is how it's going to track. It'll actually happen faster. It'll happen faster, but it's still going to take time.

58. 30:53Prediction

    There is nothing that shields you from this fact, from a more competent, more connected artificial intelligence, than something like Bitcoin. It is your only shield because you are no longer vulnerable to increased intelligence. You're only vulnerable to increased energy.