Bitcoin Parallel Control Contract Adjustment and John Nash’s ICPI
In August 1954, and at 26 years of age, John Nash published a futuristic paper of decentralised computer processing units making for a parallel control machine, comprising a number of — at that time at least — subliminal ideas on a possible high speed digital system capable of directing simultaneous operations and interrelating them when appropriate.
Such a machine, Nash wrote, would not be intensive on the mathematical or programming labour required in solving a problem, having value for a wide range of applicability from high order and considerable interpretative capacity where the interpretation program would only need be represented once in handling several problems simultaneously.
Nash says this of the design:
“the mathematician should have to do little more than state the problem and general method of computation in almost ordinary mathematical style”
In October 1997, Nash started giving lectures on the “Ideal Money”, which evolved for more than a decade thereafter. These first ideas, according to Nash, arose from the possibility for comparison in money quality in the performance of contractual obligations.
A key proposal in the Ideal Money was an International (or Industrial) Consumer Price Index: a non-political value standard employed as the basis for currency standardisation.
The International Consumer Price Index
In natural comparisons of money value, Nash makes a series of observations, one of which is that in most advanced economies, domestic authorities publish statistics — which in the United States, go back to when the dollar was on the gold standard — where the CPI has come to be used and interpreted as the most realistic and practical measure of the actual rate of inflation.
As the Ideal Money evolved, so comes Nash’s introduction of an “Asymptotically Ideal Money” and how the ICPI might be useful going beyond the territory of a singular state: Nash remarks the “asymptotic” behavior of a value under comparison can be different from an earlier apparent pattern, differentiating also between the applicability of a world empire context in the Ideal Money and the Asymptotically Ideal Money.
While having reasonable likely expectation of the Asymptotically Ideal Money, Nash expresses doubts in 2002 as to the “Ideal Money” being accepted into the world empire:
“One cannot logically feel confident of the adoption internationally of an ideal system of currency or currencies in an achievement analogous to the achievement of the metric system or of “the euro”.
By 2011, Nash admits his first ideas on the ICPI — an index calculated from world market prices — did not have specific proposals, like commodities or electric energy prices to suggest for the index, although he had observed on a “miracle energy source” and a regularly readjusted moving average which wouldn’t need be so good as to last into eternity.
In returning to ideas on contracts, in 2010, Nash again remarks how the medium of exchange in which a contract is written affects the level of certainty in contractual terms.
Contract law seeks to protect agreeing parties from being mis-led so obligations are freely assumed. Other rules regulate the modification of ongoing contractual relations with a view to preventing a party with considerable bargaining power from unfairly imposing changes.
Contracts can adjust or escalate to agreed price levels at pre-defined points, with the law also allowing for where contracts have been thrown out of balance due to unforeseen circumstances. However where such adjustments are required as a result of catastrophic events, the law also recognises it becomes almost impossibly complicated to re-stand or mediate on the original contractual condition.
Just as the old gold clause was used for contracts to hedge currency fluctuations, Satoshi Nakamoto similarly speaks on bitcoin supporting a tremendous variety of transaction types designed years ago including escrow transactions and bonded contracts.
Satoshi speaks on escrow software, and from this the possibility arises for contracts to be expressed in a currency term (bitcoin) as an interrelationship between one currency indexed to another, which adjusts to an apolitical comparison, and against bargaining corrosion, so that an asymptotic ideal forms irrespective of which sovereign medium of exchange the contract is expressed — currency variations are kept in range comparable to each other.
The Grammar of Trust
If the mathematician should have to do little more than state the problem and general method of computation in almost ordinary mathematical style, the contract writer should have to do little more than state the problem and general method of contract in almost ordinary grammar.
Nash notes contracts are intrinsically verbal and also observes it in the nature of Man that religion, language, laws, and customs being naturally variable, so that while no alliance of such couldn’t be reduced to an absurdity by becoming too inclusive, a global money standard could have a similar value to that of the standard metric system in the realm of contract indexation irrespective of its specific application or purpose.
In Nash’s encouraging the writing of longer term contracts as beneficial for economic and monetary environments, and in Satoshi’s assertion of the problem bitcoin resolves of determining representation in majority decision making, it remains a proof of work in progress as to whether the bitcoin is illustrative of John Nash’s ICPI or its final destination.