Valery Chalidze (physicist and human rights defender) // with his book
Entropy Demystified: Potential Order, Life and Money (2000)
You must read this book to understand how Satoshi created Bitcoin by anchoring it in physics, with proof of work. Make copies of this book (PDF) if it is not possible to obtain it. This is the last source I know of. Download it and copy it.
It can only be found on Wayback Machine, I add a description of this book which can be found at the beginning of the book, written by Valery Chalidze himself, who died in 2018. (1938-
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Entire book - PDF // Entropy Demystified: Potential Order, Life and Money (2000)
https://web.archive.org/web/20221004134003/http://www.worksofvalerychalidze.com/uploads/1/0/2/8/102863812/entropy.pdf---
About This Book (Valery Chalidze // 2000)
Although the concept of entropy has been under discussion for one and a half centuries, its philosophical depth has still not been properly explored and it is still one of the most complicated and controversial concepts of science. Its application to the study of social processes has started only in recent decades and no doubt this trend will continue. The author’s first goal in this book is to provide those who are interested in social studies, but not familiar with physics, with a comprehensible explanation of the concept of entropy. The value of the knowledge of entropy for the social scientist is at least two-fold:
Entropy is characteristic of a level of disorder in any statistical system and for this reason can be successfully used for the description of the communication process, music or economic activity as well as the behavior of inanimate matter. In this use, one is dealing with the order and disorder of a system independently of physics: entropic characteristics can be used no matter what makes a system orderly or disorderly, be it the laws of mechanics or our manipulations with symbols, like the alphabet letters of musical notes. The example of the use of the entropy concept as a characteristic of any statistical system is the well known Shannon’s Theory of Information which found its application not only in the technology of communications but in biology, linguistics and other areas.
Whenever we are dealing with matter and energy be it heat machines, biology, economy or the use of natural resources, we must take into account the second law of thermodynamics, which states that the level of disorder (entropy) in an enclosed system can not decrease and that one has to spend energy to decrease disorder in any part of the system. The processes of life and social life are characterized by increasing local order, but are still subject to limitation as dictated by the second law of thermodynamics. This brought scientists to the development of the physics of open systems thanks to the ideas of Schrodinger, Prigogine and others. Now we understand that the world is a place where destructive tendencies coexist with creative forces.
For many decades the traditional topic for passionate debate among scientists and moralists has been whether we are masters of our behavior or whether and to what extent we follow biological prescription - instincts. In this book, the author tries to go one step deeper, to the following inquiry: what are the inevitable consequences of the fact that we are built from matter, and how much our willing - together with instinctive - behavior is defined and limited by the laws of physics? Limitations imposed on life, social life, economics and the use of environment by the second law of thermodynamics are particularly interesting.
After an extensive explanation of what entropy is as a measure of disorder, the author shows how entropy can be used as a bulk characteristic to measure order. He introduces the concept of potential order, which characterizes the ability of an open system to become orderly or to create order in another system. Potential order is a property of fields of subatomic particles and atoms which provide for the primary organization of matter. It is also a property of complex molecules within the living cell which provide for the organized behavior of living entities. Further, human will and economic enterprise possess potential order to increase order around us, be it material order or the creation of information.
The author is showing that the second law of thermodynamics is fundamental in putting limitations on certain automatic behavioral patterns of all living creatures - including humans - such as entropy lowering activity and self-isolation from the disorderly matter surrounding us.
The entropic approach permits the author to do further inquiry into the connection between physics and economics. It is well known that the ideas of classical mechanics provided the basis for the development of mathematical economics since the time it was established in the nineteenth century. In recent decades more economists started to realize the limitation of such an approach and started to connect economic thinking with a thermodynamic approach as well as with systems’ theory.
The concept of entropy in relation to economics and sociology was under discussion in the works of Faber, Georgesku-Roegen, and others. More authors started to see the deep analogy of economic development and the behavior of a thermodynamic system. After all, human activity, which is the subject of economic study, is a local entropy lowering process and it is exactly physics which can permit us to see the unavoidable limits of this activity.
The author shows that the low-entropic component of an economy, which is the order producing activity of people, should not be treated in theory the same way as the purely energetic component. On the basis of this, the author shows the limitations for the use of variational calculus in economics, discussing particularly the maximization of utility function.
In his analysis of the monetary measurement of order and potential order, the author shows that some important problems connected with the evaluation of goods produced by economy, inflation and monetary policy come from the fact that the same measuring device—money— is used for both—the purely energetic and low-entropic components of the economy.
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