Bitcoin: A Macroscopic Discussion on Entropy Reduction Systems and Living Organisms

The Proof of Work (PoW) mechanism invented by Satoshi Nakamoto fundamentally solved a long-standing consensus problem that has troubled humanity—the Byzantine Fault.

This problem can be described as follows: A group of generals from different backgrounds, objectives, and positions can only conquer Byzantium if more than two-thirds of them attack at the same time. Otherwise, everyone will fail. The key is how to organize an effective attack or reach a valid consensus when some generals may betray or be untrustworthy?

From an abstract perspective, this problem actually explores how to reach an agreement among parties and establish order through some mechanism in a state of chaos and disorder. In other words, it is about how to achieve Consensus.

From the perspective of thermodynamic principles, this process is equivalent to creating order out of disorder, representing a decrease in entropy. An increase in entropy means moving towards disorder, while a decrease in entropy represents moving towards order.

The PoW mechanism encourages a competition of computing power by rewarding miners to solve specific hash values, thereby achieving consistency. This method addresses the issue of how a group of chaotic and disordered nodes can reach consensus, which is the solution to the Byzantine Fault problem. Therefore, the consensus mechanism of the Bitcoin blockchain network is also known as Byzantine Fault Tolerance Consensus.

PoW creates a constantly growing and expanding system of entropy reduction. It is worth noting that in the universe, most things tend to increase in entropy, ultimately leading to heat death. However, life is an exception, as it forms order by digesting negative entropy, ultimately achieving entropy reduction.

From this perspective, the Bitcoin system is essentially a living entity, a constantly growing life form. This life form absorbs global computing power through a mechanical consensus mechanism to continue its growth.

In a sense, Bitcoin (BTC) is just a reward symbol driving the growth of this Bitcoin organism. It might have initially been replaced by other symbols, but BTC is not equivalent to the entirety of the Bitcoin system that is this organism.

In other words, BTC is a reward mechanism within the Bitcoin system, but it does not represent the entire Bitcoin system. Bitcoin is alive; it can use its life energy to serve things outside of Bitcoin. The Bitcoin entity has both its independence and sociality, just like an independent organism that collaborates with other entities in society to create greater value.

In the past, many people equated BTC with the Bitcoin network, believing that BTC was the entirety of the Bitcoin network, which reflects the limitations of their understanding.

After 16 years of development, Bitcoin continues to grow, while most so-called blockchain projects that imitate Bitcoin have essentially declined or are in the process of doing so. After Ethereum switched to Proof of Stake (PoS), it abandoned the evolutionary system that promotes continuous growth by absorbing global computing power, instead relying on the ETH staking rate to create a Consensus mechanism. Both the total supply of ETH and the staking rate have upper limits, which also determines the upper limit of Ethereum's Consensus, and this may be a deep-seated reason for Ethereum gradually falling behind Bitcoin.

Various signs compel us to return to thinking about Bitcoin itself: how this living entity driven by mechanical Consensus continues to exert its social value in human civilization or digital civilization? How can this living entity of Bitcoin integrate with human society to unleash greater life energy?

I believe this may be a more meaningful exploration and entrepreneurial direction for the next stage in the cryptocurrency field.