Measuring the Complexity of Bitcoin

I looked at the distribution of transactions of 1 hour of the block chain (269609 to 269618). I parsed the blockchain into two sets of transactions: originating and receiving addresses. I examined both sets independently and together, attempting to fit the three different trials to Gamma distributions. The receiving addresses proved to have the easiest to interpret set of data, and did not follow a Gamma distribution. Instead, the receiving transactions followed a Log-Normal distribution. Figure 1 shows the results of the data and the resulting fit. The data in figure 1 was parsed into blocks that are 2dB wide (every decade of transactions size is 5 bins, the first bin is 10^{-6}BTC, 1BTC is the 30th bin)

Figure 1, Receiving address distribution of bitcoin transactions blocks 269609 to 269618 with Log-Normal fit

Figure 1, Receiving address distribution of bitcoin transactions blocks 269609 to 269618 with Log-Normal fit

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Theft at the Grandest Scale

Theft is a strong word. It requires two things, desire and a lack of consent. One party desires something from another and takes it without their consent. Simple. My current project is developing an understanding of macroeconomics based on a formal aggregation of microeconomics. I did not anticipate the understanding that I found. This last weekend I worked on understanding claims against wealth inequality. I began by looking at the distribution of income derived form the Average Wage Index (AWI) from 1990-2012. Plotted on a Log-Log scale the distribution appeared to follow a canonical distribution Figure 1.

Figure 1 distribution of wealth (# people/$ v. income) in United States (2012)

Figure 1 distribution of wealth (# people/$ v. income) in United States (2012)

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Liberty as a Consequence of Human Action

I came to being a libertarian because of the math. I started with the idea that if we start with microeconomics, game theory, and then formally aggregate a group of individuals we can come to macro economics. I did this by mirroring Gibbs approach to deriving statistical mechanics. Translated into econo-jargon, a society is just a bunch of people added together. Thus statistical economics was born. When I explored the consequences of this framework in environmental ethics, I saw I had no choice other than to accept libertarian principles. There is more that needs to be done, and so here we go. Continue reading

Critique of A Theory of Justice (Part 1)

I am in the process of reading John Rawls’ A Theory of Justice. What strikes me is his assumption of the world being fixed. That individuals do not change with time as they grow and experience more. His distribution of wealth is similarly fixed in time and is bequeathed by random chance. The purpose of his conception of justice is to nullify “the accidents of natural endowment.”

In a statistical economic framework, individuals maximize their entropy-freedom, based upon the constraints that they are given.  When we look at the society from a wider veil of ignorance, one where we as the framers of the society are unable to uniquely identify the individual members, we treat those individuals the same. They have different knowledge, characteristics, and allotment of resources. They act with their full knowledge, the sort that Hayek calls practical knowledge. What is uniform is our ignorance of their specific and uniquely identifiable features.  This is very different from Rawls. He assumed that we ignored our ability. We are here allowing it, not denying it.  This has some fundamental impacts on the outcome. Continue reading

Regulatory Applications for Bitcoin: Environmental and Spectrum Allocation

I recently wrote a post about using property rights to avoid the tragedy of the commons.  Jesse Jenkins, of The Energy Collective, responded to my draft post that he thought my idea of allocating property rights based off of land use was too complex. I assured him that it was not and gave a logical and concise rebuttal. However, his challenge to me left me thinking about how to simplify the regulatory approach. This post is my effort to sketch out such a simplified approach. Continue reading

What Level of Government Is Necessary?

What Level of Government Is Necessary?

The short answer is, it depends. But on what? The purpose of this post is to etch out how we can estimate what level of government we need.  The recent actions of my government (United States) restricting our civil liberties in the name of security got me thinking about the subject.  I ranged from reflecting back on my socialistic youth to contemplating the consequences of anarcho-libertarianism.  The answer came contemplating Hayek’s notion of emergent social order and trying to understand why and where that social emergence comes from. Continue reading