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@ Bitcoin Infinity Media
2025-06-02 05:47:40This is a part of the Bitcoin Infinity Academy course on Knut Svanholm's book Bitcoin: Sovereignty Through Mathematics. For more information, check out our Geyser page!
A New Form of Life
It’s not easy to define the properties that would deem an entity a new form of life. There’s no consensus among scientists or nations regarding the definition of what a life form is. This is one of the main hurdles when it comes to defining artificial or synthetic life. How does one know when life has been created if there’s no clear definition of what life actually is? One popular definition of life is that a living organism is an open system that maintains homeostasis, is composed of cells, has a life cycle, undergoes metabolism, can grow, adapt to its environment, respond to stimuli, reproduce, and evolve. Could Bitcoin fit into this description? In order to find out, we need to dissect both this definition of life and the basic properties of the Bitcoin network.
Bitcoin is quite clearly an open system, but what does it mean for an organism to maintain homeostasis? Homeostasis is the tendency towards a relatively stable equilibrium between interdependent elements, especially (but not limited to) as maintained by physiological processes. The first part of that sentence perfectly describes what Bitcoin does. The equilibrium is the consensus between the nodes, which act as interdependent elements. One could even argue that they actually are maintained by physiological processes since each node’s decisions are ultimately made by human brains and not software, but for now, we’ll examine Bitcoin as a life form from a non-meta-argument perspective. The next part of the definition is that life is made up of cells, which the Bitcoin network also arguably is, especially if you count nodes as cells.
A life cycle is defined as a “series of changes in form that an organism undergoes, returning to the starting state,” according to Wikipedia. The life cycle of the Bitcoin network is still unclear, but it seems unlikely that it will ever return to its starting state. What is more likely is that while we have witnessed its birth, it is highly unlikely that any human alive today will outlive the network, so we won’t have any way of knowing. This is not unheard of in nature either however. A species of fungi called Armillaria Ostoyae, or the Humongous Fungus, in the Blue Mountains of Oregon, is one of the largest and oldest organisms ever known to man. This mushroom network is estimated to be between 2500 and 8500 years old based on its current growth rate. No one knows what its life cycle looks like in perfect detail.
The three main purposes of metabolism in a living body are the conversion of food to energy to run cellular processes, the conversion of food into bodily building blocks, and the elimination of nitrogenous wastes. Bitcoin’s metabolism works in a similar manner. Bitcoin feeds on electricity, and its cellular processes are its transactions. Its body has its own building blocks, literal blocks, that are added to its body, the blockchain, roughly every ten minutes. Malicious blocks are considered waste and are thus eliminated by the system. Bitcoin grows and adapts to its environment organically, exemplified lately by the development of the Lightning Network and other Layer 2 scaling solutions. It responds to external stimuli by showing a more and more ironclad resistance to change while still responding well to sufficiently clever improvement proposals. Like the Armillaria Ostoyae, Bitcoin grows rather than reproduces, and it evolves over time by adopting good ideas and rejecting bad ones.
The notion of Bitcoin as a life form may sound far-fetched and even a bit silly, even though a lot of its properties fit the bill. What we do know about it is that it is very unlikely to go away or stop functioning in the foreseeable future. Whether or not Bitcoin is alive is up for debate, but it can’t be killed, and that ought to mean something. We should study it carefully and try to be as unbiased and humble as possible when drawing conclusions about it.
Speaking of fungi, one of the most important aspects of money is its fungibility. Fungibility goes hand-in-hand with privacy and censorship resistance. If certain Bitcoin addresses were to end up on a government's blacklist, they’d end up becoming less valuable than their not yet blacklisted neighbors. Look at what happened to the Indian Rupee bills that were banned overnight by the Indian government in late 2017 in order to “fight corruption.” They’re still in use, but only worth about 70% of the value they held when they were considered “legal tender”. If Bitcoin transactions can’t be private, they won’t be fungible. This would reduce Bitcoin’s monetary capability. We’re at a point in history where Bitcoin transactions can be completely private, but only a select few people know how to ensure that they really are. This is arguably Bitcoin’s greatest flaw and a very real hurdle on the way to mainstream adoption.
So, how many privacy measures does the average user need to take? Just as when it comes to storage, it depends on the user’s knowledge level. Most users should probably be more careful than they are right now, but there’s little reason to be paranoid. It’s still very hard to prove that a specific transaction was made by a specific user. The whole ordeal is somewhat akin to the fight against the BitTorrent network ten years ago. The copyright lobby found different means of scaring off users in different parts of the world, banning websites, prosecuting providers, and so on, but the network itself is still thriving, and torrent files are as accessible as they ever were. A lot of heads will probably have to roll before Bitcoin is accepted everywhere, but just like they couldn’t fight filesharing, governments won’t be able to fight Bitcoin. Even the policymakers will understand the advantages of Bitcoin usage sooner or later. The word later is key here. If you want to be absolutely sure that what you do with your Bitcoin is legal, private, or worthwhile, just wait. Wait out the storm, and don’t use them until they’re fully acceptable everywhere. They’ll be worth a lot more, and you’ll have a lot more options in general. Remember, HODLing is using.
One of the greatest hidden perks of Bitcoin adoption is that it forces people to think for themselves. First, it forces the user to think about computer security. In order to store your Bitcoins safely, you have to know what you’re doing, what software and hardware you can trust, etc. It is virtually impossible to do anything online without trusting any third party. Every piece of hardware and software inside and in between each of the two computers communicating could potentially be corrupt. In Bitcoin, the cautious user will be rewarded, and the reckless user will be punished eventually. This is also true for Bitcoin’s on- and off-ramps, and the less cautious user is always more likely to end up in legal trouble. The coming tsunami that is hyperbitcoinization is scary, but a skilled surfer can expect the ride of his lifetime.
About the Bitcoin Infinity Academy
The Bitcoin Infinity Academy is an educational project built around Knut Svanholm’s books about Bitcoin and Austrian Economics. Each week, a whole chapter from one of the books is released for free on Highlighter, accompanied by a video in which Knut and Luke de Wolf discuss that chapter’s ideas. You can join the discussions by signing up for one of the courses on our Geyser page. Signed books, monthly calls, and lots of other benefits are also available.