Jon Gulson
2 min readJul 7, 2021

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If we consider bitcoin in the genealogy of what inflation is and means, we can be well served by looking at the game theory of John F Nash Jr., and the similarity between Nash's work in bargaining to bitcoin design axioms.

For example, the symmetry in bitcoin is provided by the pseudonymity of its network, in that first person identities are not required - nodes can join and leave at will, trusting the state of affairs in their absence - where there is no need to "hassle" (or "score" on a credit privileged basis) for information about these identities in possessing permission to participate.

This links to Nash's work in "Agencies" where Nash thought of a cooperative method for coalition formation, where "verbal complications" are removed from the contracts on which these coalitions are based, so that an electoral procedure was calculated which resulted in a "grand coalition" becoming available between the players and agents involved, for where the "agency" of such players was simply accepted.

If we then look at Nash's Ideal Money, which was defined as intrinsically free of "inflationary decadence" and which recognised central bank "targeting" (of inflation) works to an insufficient axiom set (in that it is arbitrary), so that this "ideal money" could be used as the contractual money unit for complete contractual performance, then it becomes implied the game theoretical function of inflation is utilised in the adjustment from non-cooperative games to cooperative games where contracts form the basis of a committed and enforceable strategy and which are indexed by a money form with some sort of unique inflationary characteristic - in the case of bitcoin, a "steady and constant" supply, so that rational expectations can form in probability on what bitcoin might do next.

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Jon Gulson
Jon Gulson

Written by Jon Gulson

Ideas in games, language, and trust.

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