@ 343PG

This is a slightly abridged version of an article written for Bitcoin magazine in Jan 2022.

I’ll start with some bad news. Unfortunately, the world of cryptocurrency has somewhat misappropriated Einstein’s name. There is the Canadian Einstein exchange, which collapsed into thin air in 2019.

There is also the recently released Einstein token, part of whose timeline is below:

“April 2021, Phase 1, Launch of website and social media channels. Creation of an overarching marketing strategy; multiple partnerships with influencers forged.”

I stopped reading at this point.

This is unfortunate, as there is much to ponder from Einstein’s wide and varied public quotations made throughout his life. These lead us not to dubious crypto exchanges or “scientific” cryptocurrencies but back to Bitcoin itself. Read on, and rest assured no knowledge of theoretical physics required..

On Thermodynamics

Let’s start close to home.

“Classical thermodynamics … is the only physical theory of universal content which I am convinced … will never be overthrown.”

Disclaimer: I’m not a physicist. Essentially though, the first law of thermodynamics states that energy cannot be created or destroyed, only change in form or be transferred. The second law posits that in every transfer, there is some amount that’s unusable or wasted. Over time, this will tend to increase disorder.

Michael Saylor has spoken eloquently on this subject, saying that Bitcoin is a conservative monetary system, and the first monetary system devised that respects the laws of thermodynamics.

Bitcoin is a closed-end system, with minimal energy loss within the proof-of-work framework. A bitcoin largely remains a bitcoin, whether transferred over time or space. The inflation within the system, essentially the rewards for mining, can be seen as a “loss,” as can the transaction fees, but both are wholly necessary for the network to properly function. Any system respecting the laws of thermodynamics will have an inevitable friction. A proof-of-stake system cannot achieve this with the same trustless integrity.

https://image.nostr.build/fec98ce738e600085c4d98b9a4306f7d29a7b59f245dfc3cbd62d8df1608a5c5.jpg

On Simplicity

“Everything must be made as simple as possible. But not simpler.”

(It’s worth noting that the internet is full of quotations falsely attributed to Einstein, for example, “The definition of insanity is doing the same thing over and over and expecting different results.” In this article, I’ve tried to avoid falling into this trap. For completeness, the above quote is likely a paraphrase from a longer quotation in a 1933 lecture that Einstein gave, albeit with much the same meaning.)

Bitcoin wholly satisfies this simple but no simpler criteria. Satoshi Nakamoto ‘s Bitcoin white paper runs to just nine pages. Let’s consider even the first line of the white paper.

“A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.”

This first sentence alone sets the tone. Shakespearean in its quality, in that, it would not be possible to remove any further words without removing meaning. The codebase upon which Bitcoin is run is also famously sparse. The original comprised only around 9,000 lines of code, nothing compared to many other copies, upon which layers upon layers of complexity have been added.

And how about this world of altcoins? What would Einstein have made of air drops, yield farming, atomic swaps, gas, proof of stake, rehypothecation, staking? They don't pass the above mantra.

On Innovation

“I think and think for months and years. Ninety-nine times, the conclusion is false. The hundredth time, I am right.”

It is a common misconception that other altcoins will innovate Bitcoin out of existence by improving on its design, consigning it to be the “Myspace” of cryptocurrency. This falls away once you fully understand Bitcoin’s distributed nature, its security model, and that its design can’t be significantly improved by any copy without losing the elements that make it unique. As Vijay Boyapati has commented in his book “The Bullish Case for Bitcoin,” some mistakenly focus on technological attributes and not enough on monetary attributes.

> On Education and Learning

“The important thing is not to stop questioning. Curiosity has its own reason for existing.”

“Thus, the wit was not wrong who defined education in this way: Education is that which remains, if one has forgotten everything he learned in school.”

The second half of this quote is commonly attributed to Einstein (and often changed to “after one has forgotten” rather than “if one has forgotten”). In reality, it actually predates him in various forms, but he did refer to it in writing himself (Einstein not knowing the exact origins himself but referring to them as a “wit”).

It is striking how many bitcoiners would agree with these lines. While this is convenient as a Bitcoin narrative, it’s hardly in the mainstream syllabus. Bitcoin requires a certain curiosity and leads in all sorts of directions.

https://twitter.com/maxhodlbtc/status/1447580338658500609

Moreover, understanding Bitcoin entails knowing that it was built after years of other attempts, combining many concepts such as such as public key cryptography, Pretty Good Privacy (PGP), proof of work, and so on. Built on the shoulders of giants. In terms of the quote above, Bitcoin is the hundredth time, and it is right.

On Truth And Understanding

“Blind obedience to authority is the greatest enemy of truth.”

Einstein wrote this in a letter in his early 20s. Bitcoiners, of course, tend to have a certain suspicion of authority, given how hostile governments and central banks worldwide are to Bitcoin. In addition, of course, it requires no authority to operate.

“The eternal mystery of the world is its comprehensibility.”

It is ironic given that the Western world has generally dismissed the idea of centrally planned economies, that we still (and more so now than ever) persist with centrally planned money. The notions of Nassim Nicholas Taleb, particularly in his book “ Fooled by Randomness,” spring to mind: people vastly overestimating their understanding of complex systems. Life is complex.

On War And Peace

“Peace cannot be kept by force. It can only be achieved by understanding. You cannot subjugate a nation forcibly unless you wipe out every man, woman and child. Unless you wish to use such drastic measures, you must find a way of settling your disputes without resort to arms. The unleashed power of the atom has changed everything save our modes of thinking and we thus drift towards unparalleled catastrophe.”

The first line of the above is commonly quoted alone, but the remainder is key for understanding the meaning. Einstein said this in a speech in 1930. It was strikingly prescient; within 15 years, the escalation of warfare had reached such a point that nations could entirely wipe each other out. The quote below, in 1946, continues on this theme.

“Many persons have inquired concerning a recent message of mine that ‘a new type of thinking is essential if mankind is to survive and move to higher levels’. Often in evolutionary processes a species must adapt to new conditions in order to survive. Today the atomic bomb has altered profoundly the nature of the world as we knew it, and the human race consequently finds itself in a new habitat to which it must adapt its thinking. In the light of new knowledge, a world authority and an eventual world state are not just desirable in the name of brotherhood, they are necessary for survival. In previous ages a nation’s life and culture could be protected to some extent by the growth of armies in competition. Today we must abandon competition and secure cooperation. This must be the central fact in all our considerations of international affairs; otherwise we face certain disaster. Past thinking and methods did not prevent world wars. Future thinking must prevent wars.”

I believe this actual passage is one of the closest to the line often attributed to Einstein: “We can’t solve problems by using the same kind of thinking we used when we created them.” There are large parallels here with the thoughts of Jason Lowery, a U.S. National Defense Fellow researching Bitcoin. Lowery argues that, via Bitcoin, we now have a digital synthetic commodity that is starting to remove the monetary premium from other physical assets, which are currently fought over, protected and defended by militaries. That’s not to say these assets won’t always have some value, just that their value will be reduced. It is far harder to attack or steal bitcoin if properly protected (be that by an individual, company or nation-state) than almost any other asset.

Essentially, this could bring about a more peaceful society, which comes about due to a universal understanding of the immutable digital property rights that Bitcoin confers. These are arrived at and continuously updated over time by an unarguable, ongoing consensus on the timechain (blockchain). Hence, this “understanding,” as far as Bitcoin is concerned, is universal.

Another interesting facet around Einstein’s quote above is the necessity of a world authority and eventual world state to which he refers. In the year 2021, the main barrier to that becoming a reality would surely be one of trust. In its operations, Bitcoin removes the need for any one party to trust any other. Hence, to the extent that a global sound money can benefit the world, it is at least part of the solution to that issue to which Einstein refers.

Would Einstein have been a Bitcoiner?

On evidence found by Level39, probably not.

“The gold standard has, in my opinion, the serious disadvantage that a shortage in the supply of gold automatically leads to a contraction of credit and also of the amount of currency in circulation, to which contraction prices and wages cannot adjust themselves sufficiently quickly. The natural remedies for our troubles are, in my opinion, as follows:

(1) A statutory reduction of working hours, graduated for each department of industry, in order to get rid of unemployment, combined with the fixing of minimum wages for the purposes of adjusting the purchasing-power of the masses to the amount of goods available.

(2) Control of the amount of money in circulation and of the volume of credit in such a way to keep the price-level steady, all special protection being abolished.

(3) Statutory limitation of prices for such articles as have been practically withdrawn from free competition by monopolies or the formation of cartels.”

With that said, he was a bright guy.. He probably would have figured it out by now:)

And let's conclude with this one -

"I never think of the future. It comes soon enough."