X, Bitcoin, Decentralised Information

Abstract

Some people don’t see how decentralisation could possibly “work”, in the sense of solving important problems such as resource allocation. Whether the economic system as a whole or a single business enterprise, they favour a system of centralisation and control. On the other side are those who have glimpsed the information-transmission function of markets and the burden of computation, incentivisation, and communication that would be required by any mechanism designed to replicate it. These two groups engaged in one of the great debates of 20th century economics. All the main players would have been awed by the decentralisation of Bitcoin and the information-communication flowing through X. Is it any surprise that some people want to abolish Bitcoin and control information on X while another group holds the exact contrasting position? For those familiar with the mechanism design debate, these battlegrounds have an air of inevitability. Each step of the way, more and more intellectual and technological firepower was brought to bear. Economic argument in prose. In mathematics. In more sophisticated math. Computer science. Information theory (i.e., Shannon). Information economics. Decision theory. Game theory. And now the themes resurface in the context of a digital commodity and a social media platform. Let us put it all into perspective.

Keywords: Bitcoin, X, Elon Musk, mechanism design, decentralised information, information

JEL Classification: D03, D81, D82, G11, G12, G02, G3, G32