Grand Unified Theory of Physics and Economics
Here I set forth a conceptual unification of fundamental physics and economics, the basis of which is the unification of the concepts of energy and money. Just as energy is only useful for doing meaningful work to the extent that it is organized into relatively rare & unlikely low-entropy configurations (in other words, has high negentropy, i.e. has a greater purity of free energy content), likewise money - any item to be exchanged for services - can only cause meaningful work to be done if that money is embodied by a relatively rare, well-organized configuration of mass-energy, for example a bar of gold - and even "abstract" forms of money such as bank balances and Bitcoin accounts fit this definition, since for a large amount of notional money such as this to be concentrated into a single account is a relatively rare occurrence, or must be if that currency is to be valuable.
I will argue that this similarity of properties is not just a coincidence, but rather that, at a deep level, money and energy are fundamentally the same thing; it's simply that money is a form of energy that is organized on typically very high level, in a form that's well suited for causing or impelling useful work to be carried out by complex economic actors (e.g., humans and organizations), not just simple machines. Sophisticated modern forms of money such as financial derivatives, Bitcoin balances, etc., are simply very complex arrangements of energy. Their usefulness hinges on their rarity, just as the energy flowing from the sun is useful only because a spherically-symmetric radially-directed flow of energy is relatively rare and well-organized, compared to a configuration wherein energy is flowing uniformly in all directions, i.e. a thermal heat-bath with a blackbody spectrum, which is the maximum-entropy configuration, from which, in isolation, no useful work can be derived.
|One form of organized monergy.|
Exchange rates therefore reflect economic actors' assessment of the relative utility of monergy (a.k.a., assets) in different configurations, which depends on factors such as their rarity, and the available instruments for causing useful work to be done by them. Exchange rates do not reflect the total underlying amount of monergy contained in, or represented by those assets.
|A device for extracting 50% of total mass|
as useful monergy.
|Locking up valuable paper documents is much |
more intuitive than mastering computer security.
How much monergy is a Bitcoin potentially worth?
The purest form, perhaps, of monergy is the traditional concept of the Joule of stored work energy, a.k.a. "free energy." A 101.97-gram deadweight mass which has (under Earth standard gravity) a 1-Newton weight, raised up on a pulley to a height of 1 meter, is one canonical example. An efficient generator can easily convert its gravitational potential energy to other useful forms such as electricity. In general, the set of mechanisms that can convert monergy into other forms with close to 100% efficiency define a set of forms that monergy can be in that are effectively equivalent to each other. No form of monergy can be more valuable than those in this set, because these are the forms that are most generally useful.
What is the long-term exchange rate between Bitcoin monergy and these "pure Joules," as it were? This is perhaps the most meaningful measure of the value of Bitcoin, since the more traditional measures of value (e.g., sovereign currencies) are tainted by their potential for debasement and hyperinflation. Even gold suffers from a long-term potential for debasement by over-mining and nuclear synthesis.
|A typical supertanker today carries about 2 million bbl|
of crude oil, worth about 10 aspirational bitcoins.
|A typical thermal solar power plant.|
|The Local Group of galaxies, as the largest gravitationally-bound|
object of which we are a part, is the aspirational Bitcoin empire.
1 BTC can get you a duchy with a hundred thousand stars.
|The globular cluster M15 has about 100,000 stars, or about one 42-millionth the|
mass of the Local Group, so it might sell for about 1 Bitcoin someday.