Organic Crypto Money vs Debt Zombie’s Fiat: Biomimetic Lessons


Money is a mystery.

Some people claim that money is a human invention. But has man ever really invented something original, something that did not previously exist in nature? Technology at its most basic level is an imitation of nature.

The more we learn about nature, the more we are struck by the dazzling complexity hidden under the silhouette of the macrocosm. We look at a cell and we find a factory. We look at the DNA and we find a database. We study the metabolism and we find an economy. We investigate the brain and we discover a computer.

Like a zoom on a fractal, each scientific discovery reveals another world that strangely reflects our own. Money, as Dostoyevsky said, is an invented freedom. But money is also slavery.

The future of humanity is inextricably linked with the future of money. To understand money, we must first understand biology.

Machine learning trained in biology

Let’s illustrate the link between monetary and biological realities by looking at Numer.ai, a hedge fund founded by mathematician Richard Craib that uses machine learning algorithms for stock prediction. Every week, Numer.ai publishes an encrypted dataset that masks the origin of the data but preserves the relevant structure.

Data scientists participating in Numer.ai then participate in a tournament to find out which algorithms will make the most accurate predictions extrapolated from the dataset. The programmers behind the victorious algorithms are rewarded with Bitcoin.

From the most accurate prediction algorithms, a meta-model is built which is designed to cover the entire stock market. The selected algorithms will be deployed in the niches of the stock market where they have proven to be effective. Taken together, the meta-model amounts to a super-intelligence for anticipating stock market trends.

Guess who spawned the most successful algorithms. Financial Times reports:

“The current leader of the Numerai tournament board is a user called ‘NCVSAI’, who works in genomics and biostatistics, according to Mr. Craib. He has earned $ 5,563 since he started submitting predictions. earlier this year, but as the hedge fund grows, Numerai intends to increase the rewards. “

The winner is: Someone whose pattern recognition skills have been honed by doing computational biology! It seems that the pioneering algorithms in the modeling of living systems are best suited for financial forecasting. This, in turn, means that the financial system itself is alive.

Biological money

Recently, Numer.ai released its own cryptocurrency called Numeraire in order to refine the competition-based crowdsourcing mechanism that underpins its strategy of investing in a more cooperative business. The cash, issued exclusively to data scientists already registered with Numer.ai, will increase in value corresponding to the overall success of the hedge fund.

By influencing the behavior of its holders, cash is intended to be a “programmable currency”. Money, in this sense, has an innate potential to encourage groups of human beings. Conventional fiat money has proven woefully inadequate as an underlying behavioral program for humanity.

Digital cryptocurrency, paradoxically, is much more organic. Literally.

While fiat has turned the economy into an undead debt zombie, cryptocurrency is here to resurrect it. This vital property of cryptocurrency stems from its kinship with the energy currency of the biological cell – ATP.

Inside the bacteria and cells of higher organisms there is a relentless rush of activity and transformation processes. Although many biochemical details of how organisms produce and consume energy are still the subject of debate among scientists, major components of cellular metabolism have been identified.

Surprisingly, the frenetic events inside a cell can be compared to the functioning of an economy – beyond the figurative sense. Economists are constantly discussing how certain economic phenomena and indicators can be interpreted and what can be done to induce desirable macroeconomic development such as an increase in GDP or a higher employment rate.

But few economists will say that money – as a universally accepted medium of exchange – is the attractor that holds everything together. In school, we learn that economics is about allocating scarce resources.

Philosopher, economist and systems theorist Kenneth Boulding has offered another definition. For him, economics is the study of exchange.

Thus framed, the events inside a biological cell are the subject of an economic analysis. Biochemical reactions become transactions and metabolism becomes a network of transactions. It has been suggested that a transaction network has three main components: a currency, a settlement layer with a degree of finality, and a general ledger to record transfers of ownership. Let’s see if we find these things in biological systems.

Going digital is going back to nature

ATP is the cell’s universal “energy currency”. Let’s see how ATP is synthesized in a cell in a very simplified way. First, we eat a diet made up of molecules that contain energy stored in their chemical bonds, for example carbohydrates or proteins. Food is digested and broken down into smaller parts via a very complex cascade of biochemical reactions.

All of this happens inside specialized compartments of our cells, the mitochondria. During this process, energy is released which is used to “make” the cell’s energy currency, ATP molecules. The ingenious solution found by nature allows this currency to be used to pay for virtually any biochemical reaction, catalyzing or accelerating the production of desired cell parts, ranging from new strands of DNA to the structural proteins that provide the scaffolding. for our cells. Like capital, ATP accumulates where it is needed.

Without going into the details of enzyme kinetics, it suffices for our purposes to assume that at the cellular level a sedimentation layer is provided in the form of specialized enzymes capable of catalyzing a single specific reaction.

If you pay a particular enzyme for ATP to build a certain molecule, you have to pay another enzyme to break down that molecule once you no longer need it. Building an atomic submarine costs a lot of money, but decommissioning it doesn’t come cheap either. In either case, workers with specialized skills must be paid or they go on strike.

All cellular transactions paid for by gigantic amounts of ATP (between 50 and 75 kg per day, you produce about as much ATP as your own body weight) are recorded in what is called the epigenome.

The epigenome is a large decentralized network that consists of real-time genetic and metabolic regulatory information. Ignoring the molecular details of this system, it’s always safe to say that the epigenome can store orders of magnitude more information than your DNA.

It tracks and maintains your ATP account balance so that you produce just the right amount and spend in just the right places to keep your system running in everyday life. Of course, the balance of an Olympic athlete is different from that of an office worker. But, ideally, it keeps them both able to do their jobs.

So there you have it: your body is a web of transactions. Vice versa, the economy is alive. With the arrival of Bitcoin and the Blockchain, we finally have a remedy for the ailments of a chronically unbalanced techno-biological ecosystem.

As Nick Ayton pointed out, the concept of debt is alien to cryptocurrency. Like most reactions catalyzed by ATP, Bitcoin transactions are irreversible.

Cryptocurrency, as a programmable currency, will cause within society the same collaborative behavior already exhibited by the subunits of a complex biological system.

In the fractal structure of our reality, repairing the economy goes hand in hand with deepening our understanding of what it means to be human. “Crypto” means hidden. In truth, it is a revelation.

Claudio Flores, M. Sc., And Danilo Flores are the founders of Kybernesia, a laboratory for thought experiments and biomimetics based in Hamburg, Germany. They take a non-reductionist approach to technology and nature.