“The Law”

Fixing meanings to evolving new concepts, theories, ideas (like Bitcoin) takes time and experience to comprehend and assimilate — by which descriptions and names are co-opted to social scale; in short, stabilising through assuming common perspective.

A previous writing addresses the relevance of Nietzsche in this regard and the semantic agency exerted on Bitcoin — where interplay of objects are in continual transition — given that games continually move through time:

The Creation and Stabilisation of Nash Equilibrium

The non-cooperative game exists where participants can’t enter into coalitions — for example, through a contract — because of communication difficulties.

Nash equilibrium embodies the idea agents in a such a game are rational, simultaneously acting to maximise their utility.

It’s unnecessary, however, to assume participants have full knowledge of the total structure of the game: there’s an implicit assumption repetition [of a game] allows participants to accumulate empirical information as they go, adjusting strategies appropriately.

Once at equilibrium, no player has incentive to then unilaterally deviate from their action path.

Interestingly, Nash observed non-cooperative equilibria best applies to long or infinitely lived players such as corporations or nation states, rather than players of short horizons and limited calculating ability.

The Emperor’s New Clothes: Facebook Launch Libra

Facebook’s proposal to create its own cryptocurrency is based on a de facto spot contract of varying sovereign fiats, involving third party oversight, with the overall objective of stability, combined with transaction efficiencies which are believed to limit Bitcoin.

The proposal has been met with varying responses:

Including the problem with currencies holding pegs in the guise of stability:

More pointedly, how Bitcoin is affecting the etymology:

Wittgenstein, Language Games & The Law

Ludwig Wittgenstein had one book published during his life — Tractatus — a series of self declarative statements designed not to advance insights too quickly; and a posthumous publication Philosophical Investigations, considered one of the best philosophical works of the 20th century, introducing the notion of language games.

Wittgenstein (1889–1951)

For Wittgenstein, the harmony between thought and reality is to be found in the “grammar” of the language; the rules of which are arbitrary, as they are in any game: they can be made differently, but then it’s a different game.

In this way, grammar regulates the conventions and customs in which language games work — mediating reality [and language] as a result.

And in a similar fashion to how Nash equilibrium doesn’t assume participants possessing full knowledge of the game framework — learning by doing, instead — language games are acquired by observation, practice, application, trial, error, induction and repetition:

Like the non-cooperative game, the language game is played because we have to play it: we don’t wish to be excluded or lose — and language is used accordingly, for example by not embarrassing or ostracising ourselves from peers.

For Wittgenstein, philosophy was a battle against the bewitchment of our intelligence by means of language: philosophy couldn’t solve puzzles or answer questions, other than clarify our use [of language] to see the connections between words and their usage afresh — establishing the difference between sense and nonsense.

This approach also discounted the idea of abstracts or transcendence — there are just language games.

In respect of the law, the enterprise of legal theorising was an optional practice for Wittgenstein because it attempted to resolve illusory problems created from confused use of language — law is made by language along with providing for authoritative dispute resolution — and had to account for the possibility for disagreements over meaning.

Indeed, if there were perfect determinism in language, courts wouldn’t be required at all. A parallel to be drawn with Central Banks and their use of language games in inflation targeting:

Principles and Principals

Wittgenstein observed that following a rule or legal principle is analogous to following an order, whereas following a grammatical practice or obeying a linguistic rule is almost unconscious — more of a casual intuition.

A further parallel can be drawn with John Nash in respect of an agencies method for modelling coalitions and cooperation in games: Nash came to think one player could simply accept the “agency” of another player or existing coalition of players — to take them at their word, rather than be wary and “hassle” for more information than otherwise needed in participation?

Nash also noted in the same modelling, “attorney agents” acted strategically, rather than cooperatively: principals can set the conditions of the game, and in the setting of a law court, arguments made persuading the trusted entity to the cooperation in legal consensus — ie, attorneys play their own game.

In this regard — and with Bitcoin — at the computational base settlement, there aren’t any principals: it’s without a mediating party between players.

There isn’t a market maker setting out a “language game” in the conventional way and it appears Satoshi Nakamoto created a self declarative principle in the Tractatus sense — for which he didn’t have time to explain, as Wittgenstein couldn’t explain what a language game actually was — where hashing recursions brutishly move it toward equilibrium:

Nietzsche’s diachrony toward Wittgenstein’s synchrony and a virtual market for dispute resolution without the middleman on a global standing where exists the possibility of a dramatic language evolution.

And this is how the dollar is now pricing stability: as a de facto litigation standard.