Looking at the Crypto Ponzi Dilemma from the Perspective of Physical Dissipative Systems

Author: NingNing

At a time when "questioning Ponzi" is considered naive and "understanding Ponzi and becoming Ponzi" is the mainstream idea in the current industry, this new work by Mr. Loki is like a beam of light shining into the "Plato's Cave", reminding the crypto industry deep in the cave that it needs to collectively turn back to face the real world and solve real problems.

No matter how prosperous disk studies are, I don't believe that Ponzi will be the endgame of encryption. No matter how sophisticated the design of the Ponzi disk is, it is essentially a physical dissipative system that requires continuous input of energy or matter from the outside to maintain its structure and function.

Observing the Ponzi disk from the perspective of physical dissipative systems:

• "Low entropy" energy = funds of new investors

• "Ordered structure" of the system = pyramid stratification of investors

• "High entropy" waste = loss of funds and loss of trust

• Reduced energy quality = More and more new funds are needed to maintain the same rate of return

• Limited external resources = The potential investor pool is limited

• Entropy accumulation = Overall decline in market trust

• Increasing costs of structural maintenance = Increasing costs of attracting new investors

Just as any dissipative system will eventually collapse due to the inability to obtain enough "low entropy" energy, the Ponzi scam will inevitably collapse due to the depletion of new funds. This is not accidental, but the inevitable result of the law of increasing entropy.

The crypto industry has come to this day, inseparable from the early Bitcoin OG preaching and the subsequent top VCs such as A16Z and Pentera constantly creating new narratives and building new primitives. From the perspective of disk science, they are creating disks on the one hand, attracting new investor funds on the other hand, and then exiting in the bull market cycle. But this "business model" has been involuted to this day, and it may have approached the upper limit of this dissipative system. For example, the penetration rate of cryptocurrency in the US market has exceeded 20%.

The path to break the deadlock lies in the old-fashioned construction of projects that continuously innovate, improve efficiency, and create real value. This is because continuous innovation, efficiency improvement and value creation can keep the system in a state of "far from equilibrium", in which the system may produce new and unexpected structures and functions, further enhancing its sustainability.

Therefore, the crypto industry urgently needs its own "ChatGPT" moment. The recently popular new tracks such as PayFi, Consumer Chain, AI Agent with Crypto Wallet, and chain abstraction are all new solutions born under such environmental pressure.

Of course, when evaluating the value of these projects, we need to reflect on the popular inherent thinking such as technological determinism, background determinism, and Infra worship, and return to products and growth.