The Unspoken Stable Bargain
The Pandora’s box of relating Bitcoin to ‘stability’ — where price movements on an inter relational sovereign exchange basis mean its utility as a money or currency aren’t considered stable, or normal, by conventional standards — appear the prime gauge of the event.
It’s probably universally agreeable to comment Bitcoin isn’t usual by any degree: as an unmediated money (trustless), Bitcoin created an equilibrium with the trusted mediated sovereign fiat equivalent, where central banks are the lender of the last resort:
In this theory, Nash equilibria is applied to macroeconomics, instead of more familiar microeconomic or atomised gaming scenarios such as the poker table:
So Long Sucker
Nash himself mitigated such a view by regarding experimental games as the optimal route to reality in human interactions — but also understanding in practice, players can be institutions.
Indeed, when at Princeton in the 1950s, Nash devised a game called So Long Sucker. There is an anecdote suggesting such a game was played so viciously, it made one wonder for the future of the species!
Race to the Bottom
There exists scepticism over application of Nash equilibria in Bitcoin. This is attributed by some to central banks being conspiratorial — with their monies operating in unipolar coordination — rather than in competition against each other:
This view diverges from the ongoing global situation, which is trending for weaker currencies. With the US dollar, there is the added responsibility of being the world reserve:
It’s conjectured sovereign central bank operations are limited by their lack of multilateral agency. This appears self-evident in their understanding of a multilateral money — Bitcoin — whose origins are still unclear on a co-opted stage and why Bitcoin is prone to volatility because it can’t be normalised by central bank forward guidance.
This is almost certainly why Satoshi used a pseudonym: so his real world identity wouldn’t have to explain, justify, apologise or be held in account for Bitcoin in the absence of shared understanding.
If Nash equilibria is indeed stabilised in monetary macroeconomics, then the point at which players can’t unilaterally gain from deviating from the position of singular coalition, is the point at which an unspoken stable bargain is attained.
