A Look At The Game Theory Of Bitcoin – Bitcoin Magazine

What is game theory? Simply put, if you are playing any game of strategy, like chess, any move you make in the game will have to be countered by your opponent. The strategic decisions that you and your opponent make will ultimately determine who wins and who loses the game.

So how does this relate to Bitcoin? Bitcoin is the greatest invention since the Gutenberg press. The Gutenberg press affected the game theory of how the Church and State worked and how information was shared with the world. When Johannes Gutenberg invented his press, he was essentially moving his chess piece to checkmate the Church. For the most part, up until the invention of the Gutenberg press, the Church and people in positions of power or education could read, write and spread whatever information they wanted. Before the printing press, there were limited copies of important writings such as the Bible. Any knowledge about the world mostly came from whatever your local town had available for a literate figurehead to read in church or school. Most people were not able to read or write, so they had to depend on others to gain their knowledge of the world. People were told what to learn, believe and how to live their lives by the Church. As long as the State and the Church controlled what the people were taught they could control the people's ideologies.

Bitcoin has the same game theoretics as the Gutenberg press, but it is working toward separating the State from Money. Now lets envision a chessboard where the "worlds most powerful players" (WMPPs) that is, banks, governments, special interest groups are playing on one side of the chess board and Bitcoin is on the other side. This chess game between Bitcoin and the WMPPs has been the longest chess game to have ever been played because it has been going on for 12 years. In the game of chess, there are two possible outcomes, stalemate or checkmate. There is no chance that Bitcoin will face a stalemate in its game against the WMPPs, because a stalemate means that neither player wins or loses. A stalemate results when neither player can make a move that would result in the game progressing any further.

Alternatively, when Bitcoin checkmates the WMPPs king and wins the game of chess, Bitcoin will have become a store of value and medium of exchange for the whole world. The WMPPs cannot checkmate Bitcoin because, at most, if it were possible for the entire world to ban Bitcoin, as far-fetched as that sounds, Bitcoin would just go underground and be used like the Tor network, aka dark web.

This year, the WMPPs have made the following chess moves against Bitcoin along with "Bitcoins game theoretic countermoves" (BGTC):

WMPPs Move #1: China banned all bitcoin miners from their country. China represented approximately 65% of the computing power that runs the Bitcoin network.

BGTC: Bitcoin miners moved to the U.S. and other bitcoin miner-friendly countries. The resilience of the Bitcoin network was greatly tested by this huge move by the second most powerful country in the world. The Honey Badger does not care about China or any other powerful countrys decision about it. Bitcoin has the mindset of the little engine that could and will soon become a steamroller that all countries will have to get out of the way of or get steamrolled" by.

WMPPs Move #2: The United States snuck in a cryptocurrency provision within its Infrastructure bill so as to get $28 billion worth of taxes to fund the $1 trillion infrastructure bill. The cryptocurrency provision was horribly worded by people in D.C. that did not have any clue as to what bitcoin or cryptocurrencies were.

BGTC: Bitcoiners called all their senators and fought for the cryptocurrency provision to be reworded and less harsh on the Bitcoin industry. This Bitcoin movement sent shockwaves among the halls of Congress and even though the "provision" did not change in favor of cryptocurrencies, the shockwaves that were caused by Bitcoiners will forever be felt. Bitcoin, the protocol, did not care about the bill nor the opinions of man and kept running to the tune tick tock next block.

WMPPs Move #3: The Environmental, Social and Governance (ESG) movement puppeteered Elon Musk to come to the "realization" of Bitcoins immense amount of energy usage and the need to make Bitcoin greener.

BGTC: The Bitcoin Mining Council was created by Michael Saylor and after compiling an immense amount of energy usage data from 23 miners (62% of the mining industry) that freely joined the council, it was found that Bitcoin currently generates more than 50% of its usage from renewable energy. Bitcoin crashed to $29,000 after the Musk and China FUD in a span of a few months. Bitcoins price is now close to $50,000. The Honey Badger doesn't care about Musk or the ESG, but the Bitcoin Mining Council is serving as a great way to educate the masses about Bitcoin's energy usage.

WMPPs Move #4: The International Monetary Fund (IMF) tried to strong-arm El Salvador into not passing a law that would allow bitcoin to become legal tender in the country, by threatening that they would not support El Salvador.

BGTC: The President of El Salvador took things into his own hands and did what he thought was best for his people in passing a bill over a span of one day to allow bitcoin to become legal tender in El Salvador. El Salvador started using bitcoin as legal tender on September 7, 2021, which is like Bitcoin moving its pawn to the end of the chessboard and all avid chess players know what happens to a pawn when it reaches the end of a chess board. Pawns become queens, and the queen is the most powerful piece in the game of chess. This game theoretic move by Bitcoin will start a chain reaction among other countries to adopt bitcoin, help bank the unbanked, and protect the purchasing power of those who adopt it from the rampant printing of fiat by all Nation States.

In conclusion, the Bitcoin network will continue to operate no matter what the WMPPs say, do or think. Some of the greatest, most powerful entities like the IMF, China, United States and ESG movement have tried to attack Bitcoin, but it will continue to move its chess pieces on the world's chessboard to counter every move because it is a beautifully engineered protocol. You might even argue that Bitcoin is artificial intelligence considering how it has countered the WMPPs every move for 12 years but that will be for a different article.

This is a guest post by Jeremy Garcia. Opinions expressed are entirely their own and do not necessarily reflect those of BTC, Inc. or Bitcoin Magazine.

Go here to see the original:
A Look At The Game Theory Of Bitcoin - Bitcoin Magazine