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Section 5.1 Dictatorship

5.1 Dictatorship

The subsequent sections will explain in detail why PoW is posited to be a winner-take-all power vacuum, and the harmful effects anticipated.

Unlike for example a farm or factory which have a diminishing rate of marginal utility of economies-of-scale, i.e. economies-of-scale above which no further increases in pro rata profit are obtained, the marginal utility of additional economies-of-scale in PoW hashrate do not diminish until greater then 50% of the systemic hashrate is consolidated, which is the winner-take-all outcome.

Power vacuums are disequilibria that fail because they are incongruent with the fact that small things grow exponentially faster than large things.[34] Most small things don’t grow large enough to become stable large things, e.g. the competing saplings in the forest, because they have more competition and friction. Analogously most of the lower middle class and poor don’t grow wealthy because a higher portion of a lower income is budgeted for food instead of savings and investment. A stable exponential or power-law distribution requires large things peak and decay, to renew competition and avoid otherwise inevitable decadence.[39]

Creative Destruction

The failure directed disequilibrium can be conceptualized another abstract way. Entropy isn’t maximized by the actors in a system being static or preordained. This applies even to actors within an equilibrium, because an equilibrium applies to the net constitution of the actors in a system, which can be congruent with dynamic replacement of specific actors. Coase’s theory[40] models decadence as costs which prevent the market from arriving at the most economically efficient outcome. Such costs are generically described as insufficient degrees-of-freedom.[41]

Nature requires the every actor have a unique future (which is also the scenario of highest entropy[34]) to maximize trial and error in order to achieve maximum fitness to dynamic future outcomes which can’t be anticipated perfectly. This is why ice which is formed by being cooled slowly has fewer cracks because the molecules have more degrees-of-freedom (i.e. higher entropy) to move into the optimum structure and not get trapped as the (heat transfer) environment is changing. And because each of these molecules could make its own locally informed decision appropriate to its own individual circumstance, each which is each unique and not captured by the single centralized top-down control over the temperature. This is Adam Smith’s Invisible Hand wherein individuals each acting in its own self-interest result in a global optima. However, this is also not incongruent with some top-down control being beneficial to prevent the chaotic trial and error of system actors from losing too much prior information too fast and failing to converge on any order, e.g. the ice tray.[41] [42] The Second Law of Thermodynamics which requires that entropy must trend to maximum overall (because of the fundamental irreversibility of space-time) routes around decadent Coasian cost boundaries by destroying them, aka creative destruction.


[34]: Shelby Moore III. The Golden Knowledge Age is Rising. Steem(it) blog, Sep 17, 2016.

[39]: Celine’s Second Law. Wikipedia.

[40]: Nicholas Gregory Mankiw. Principles of Microeconomics, Second Edition. §The Coase Theorem, pp. 213–214, 2001.

[41]: Jared Wagner, Shelby Moore III, Risto Pietilä, et al. Discussion of the interaction of Coasian costs in social systems in dictating relationships of top-down order and emergent phenomena due to bottom-up disorder., “Economic Devastation” thread, posts #2064, 2084, 2092, 2102, Oct 19–21, 2015, 2708, Nov 25, 2016. Further discussion.

[42]: Jared Wagner, Shelby Moore III. Discussion of the interaction of top-down order and emergent phenomena due to bottom-up disorder., “Economic Devastation” thread, posts #122–129, Feb 3–5, 2014.

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