Is Blockchain a Complex System, Subject to Chaotic Behaviour?
Renato Pires dos Santos
Founder & Lead Developer at academicum.ai | Building AI-Powered Tools to Enhance Academic Research and Learning
What is it about?
We are witnessing a surge of cryptocurrencies based on blockchain technologies. If Bitcoin/blockchain were a complex system, it could enter a Flash-Crash-type of chaotic regime, with catastrophic consequences for all financial systems based on it.
Why is it important?
While there is no concise definition of a complex system, I made use of Information Theory of Complex Systems to compute a quantitative measure of its complexity. A very low non-null value was obtained, and this suggests that blockchain is hardly a complex system and unlikely to display chaotic behaviour. The same cannot, unfortunately, be said of the Bitcoin market, which is apparently a complex system without a stable equilibrium, due to the non-linearity introduced by the presence of the capital gain seekers, which makes chaos likely to arise.
Perspectives
I must confess that writing this article was challenging and I worked hard to live up to the invitation from a friend whose brilliance and inventiveness I admire. Beyond mere academic curiosity, I hope these results help to make this new and still somewhat wild world of cryptocurrencies and ICO's safer for all the interested parties.
Is Blockchain a Complex System, Subject to Chaotic Behaviour?
Education Rebel Leading Social Impact Initiatives through Learning Sciences | Enabling Blockchain for Self-Directed Skills-Based Education | Founder at Edularity
7 年My first reaction: Blockchain might not be a complex system per se, as it is only the technology. Technology is just Technology, but, could it be that it is the technology which lead not only the descentralization of economy and, I hope, trigger many other complex systems to become self-organized?