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This article was originally published in April 2021 on WeChat. You can find the Chinese version here.
There are certain things in this world that, once you understand them, will give you an edge over others.
For instance, the concept of “dimensional thinking” from Liu Cixin’s The Three-Body Problem or the idea that “a good question is better than a good answer” so beloved by Zhihu users. Another example, which we’ll discuss later, is the concept of “horizon.”
Of course, the notion of an “infinite game” should also be on that list.
The concept of the infinite game predates Bitcoin by a long shot. It was introduced in 1986, a full 23 years before Bitcoin was born. The man behind this concept was an American named James P. Carse. Sadly, he passed away on September 25, 2020, becoming a figure of the past.
James P. Carse was a professor of the history and literature of religion at New York University. His main research areas were religion, metaphysics, and epistemology, but his most significant contribution lies in game theory and ontology.
The reason we say Carse’s major contribution is in game theory is because, in 1986, he wrote a book titled Finite and Infinite Games.
It might actually be better to translate the word “Games” in the title as “Game Theory” because Carse was talking about much more than just games in the usual sense. His discussion encompasses “the world, time, society, culture, power, language, sex, disease, death, war, nature, machines, religion, and myth.”
Obviously, this is a philosophy book — a philosophical work written by a historian, crossing disciplinary boundaries. But don’t underestimate it. Kevin Kelly, the first editor-in-chief of Wired and author of Out of Control, gave it high praise, saying: “It changed the way I think about life, the universe, and everything.”
Kevin Kelly, as you might know, was the first editor-in-chief of Wired magazine and the author of Out of Control (1992), a remarkable tome on human evolution. Wired, founded in 1993, is a highly insightful tech magazine.
Kevin Kelly’s glowing endorsement of this book is something we should take seriously. However, we shouldn’t blindly follow authority; we should read and evaluate the book for ourselves. But first, we need to understand: What exactly is an “infinite game”?
At this point, you might say, “Wait a minute, what does all this have to do with Bitcoin? And even if Bitcoin is an infinite game, what does that have to do with me?”
It’s actually quite significant.
If Bitcoin is an infinite game, it means there are no winners or losers in the world of Bitcoin. Bitcoin has a beginning but no end.
You’ll realize that there’s more to Bitcoin wealth than just “making a profit.” You’ll also find that your anxiety will diminish, giving you more time to do valuable and meaningful things.
In short, if Bitcoin is an infinite game, and you are an infinite game player, you will be happier.
So, to understand what an infinite game truly is, let’s take a closer look at that peculiar book from 1986.
This is indeed an unusual book. Because, trying to figure out “what is an infinite game” from the book itself is quite challenging.
Finite and Infinite Games is reminiscent of China’s The Analects. The entire book is full of statements like the following:
“There are at least two kinds of games. One could be called finite games, the other infinite games.”
“A finite game is played for the purpose of winning, an infinite game for the purpose of continuing the play.”
But why classify them this way? Why is a finite game aimed at winning? Why is an infinite game aimed at continuing? The book doesn’t explain.
Let’s take a look at the first passage of The Analects, and you’ll see what I mean:
The Master said, “Is it not a pleasure, having learned something, to try it out at due intervals? Is it not a joy to have friends come from afar? Is it not gentlemanly not to take offense when others fail to appreciate your abilities?”
See? It just jumps straight to “Is it not a pleasure?” without any explanation. In Confucius’s time, writing was difficult; carving characters onto bamboo strips was labor-intensive, so brevity was essential, and only the most important conclusions were recorded. In modern times, we can view Professor Carse’s approach as a stylistic choice.
Fortunately, Professor Carse did summarize six core points of the book, from which we might glean some clues.
The 6 Key Points of Finite and Infinite Games
A. There are at least two kinds of games: finite and infinite.
B. A finite game is played for the purpose of winning, an infinite game for the purpose of continuing the play.
C. Finite games are those instrumental activities — from sports to politics to wars — in which the participants obey rules, recognize boundaries, and announce winners and losers.
D. The infinite game — there is only one — includes any authentic interaction, from touching to culture, that changes rules, plays with boundaries, and exists solely for the purpose of continuing the game.
E. A finite player seeks power; the infinite one displays self-sufficient strength.
F. Finite games are theatrical, necessitating an audience; infinite ones are dramatic, involving participants…
The above seven sentences pretty much capture the essence of Finite and Infinite Games. Understanding these six points gives you 80% of the book’s content. Read them carefully several times. But if you want to truly grasp the concept, you’ll still need to look at some of the examples in the book.
The Shadows of Infinite Game Definitions
Professor Carse’s summary in point “D” offers us hope of finding out what the “infinite game” really is. Specifically, this part:
The infinite game — there is only one — includes any authentic interaction, from touching to culture, that changes rules, plays with boundaries, and exists solely for the purpose of continuing the game.
By comparing it with “finite games” ©, we can identify three important characteristics of an infinite game:
- Changing the rules;
- Playing with boundaries;
- Existing solely to continue the game.
With these three characteristics, we have a standard by which to evaluate whether Bitcoin is an infinite game.
Let’s start with the easiest: “Existing solely to continue the game.” This aligns with Bitcoin, as everyone hopes Bitcoin will continue to exist.
The Bitcoin system itself also has no endpoint. The only significant time marker is 2140, which is merely the year when all Bitcoin will be mined — not when Bitcoin ends. After that, miners will primarily rely on transaction fees. Whether those fees will be sufficient is another matter for another day.
Now, there are only two points left to verify: whether Bitcoin can “change the rules” and whether Bitcoin also “plays with boundaries.”
First, let’s examine whether Bitcoin’s rules can be changed.
Code is law.
For Bitcoin software, modifying the rules is akin to continuously optimizing and upgrading the software. The rules of Bitcoin have been modified continuously, without pause. As you can see from the chart below, the latest update to the Bitcoin core software occurred on January 14, 2021.
You might wonder, “Bitcoin’s total supply is capped at 21 million, and that’s written into the code. Can that be changed too?”
Yes, it can.
As long as the time is right and it ensures Bitcoin’s continued existence, any modification is possible. However, for any significant changes, there is a strict process in place — a system called “Bitcoin Improvement Proposals” (BIP).
In simple terms, the BIP process includes Draft, Proposed, Final/Active, and Obsolete stages. There’s even a BIP specifically about how to handle BIPs.
One of the more famous modifications is “Segregated Witness,” BIP number 91. It was intended to expand Bitcoin’s block size from 1MB to 4MB to accommodate more transaction data.
At the time, there was an even more aggressive proposal to increase the block size to 8MB. When the Bitcoin community didn’t agree, the proponents went their own way, leading to the creation of Bitcoin Cash (BCH).
Rules, at their core, are about interests. When opinions differ, a “split” becomes likely. Of course, this isn’t necessarily a bad thing. We’ll cover BIP voting in detail another time; the design is clever, and the process is fascinating.
So far, there have been 370 BIPs. However, only a few have been implemented because everyone is cautious, and reaching consensus is difficult in a decentralized system.
The key to whether a rule is modified lies in whether it has affected Bitcoin’s survival. Because, whether it’s for people, organizations, or Bitcoin, survival is paramount. This is beyond doubt.
Next, we only have one final question left: Is Bitcoin also “playing with boundaries”? If so, then Bitcoin can indeed be considered an “infinite game.”
But before that, let’s first clarify — what exactly is a boundary?
In physics, boundaries include time and space.
For games, we should also include “participants” or the element of “people.” To determine whether a game has boundaries, we need to consider:
- People: Are the participants’ numbers fixed?
- Time: Is there a start and end time?
- Space: Is there a defined space?
For example, in a debate competition, the participants, time, and space are all well-defined, so it’s a finite game. But in a conversation, the participants, time, and space can all be undefined, making it potentially an infinite game.
As you can see, I said, “a conversation ‘can’ be an infinite game,” implying that a conversation could also not be an infinite game. You can “kill” the conversation just by constantly using debate techniques to silence the other party, ending the discussion.
It’s not just conversations; many infinite games can be ruined, turning them into finite games.
Now that we understand boundaries, the meaning of “playing with boundaries” becomes clear.
However, you might say, “Playing with boundaries? I’ve known that for a long time. Some people do it all the time, like athletes taking performance-enhancing drugs to win, businesses cutting corners to increase profits, or countries signing agreements but not honoring them.”
Indeed, that is also “playing with boundaries,” but here, the “boundary” refers to the “rules of the game,” not the game’s boundary, which confuses the concept.
Rules can be modified because all participants agree, not because of cheating. This is true for both finite and infinite games. Violating the rules is never acceptable in any game — that’s the baseline for being human and doing business.
Breaking the rules for an extended period, once discovered, will lead to no one wanting to “play” with that person anymore. The consequences are usually dire, and they end up as outcasts in the world.
Now you should understand that boundaries are external to the game, the dividing line between the game and the outside world, while rules are internal, the guidelines all participants agree to follow. They are not the same thing. So, playing with boundaries is not the same as playing with rules — it’s a more advanced form of play.
Playing with boundaries means that during the game, the boundaries change, manifesting as “an increasing number of participants,” “no defined end time,” and “expanding space.”
Let’s start with an example involving “time” — again, a conversation. Have you ever experienced “drinking with a kindred spirit, never having enough”? With the right person, you can talk for a long time. The reason you talk for so long is that your conversation either deepens or broadens as it progresses. Before you know it, time has flown by, and that boundary of time has been continually pushed. Suddenly, you realize it’s already the next morning.
Next, let’s look at an example involving “space.” Wang Xing, the founder of Meituan, said that Finite and Infinite Games greatly inspired him, especially this line: “Finite players play within boundaries; infinite players play with boundaries.”
Wang Xing started with group buying and continuously expanded his business landscape, transforming Meituan into a “super platform” spanning group buying, food delivery, movie tickets, hotel travel, in-store comprehensive services, transportation, and retail. There’s an article titled “Wang Xing’s Infinite Game” that specifically discusses how Wang Xing continuously broke through boundaries, which you might find interesting.
Finally, let’s consider an example involving “people.” This one comes from Professor Carse in his book Finite and Infinite Games. He said, “Culture has no boundaries; in a culture, everyone can become a participant, no matter the time or place.”
This makes sense. You can’t say we have culture while others don’t — that would be insulting. So, culture belongs to everyone. Culture has no boundaries; it’s an infinite game.
Professor Carse viewed these boundary-playing games as a very special type of game — infinite games. In such games, the boundaries are constantly changing, so the boundaries of an infinite game can no longer be called boundaries. For convenience, he borrowed a concept from physics — horizon.
The horizon is a concept that has been severely underestimated. We should set aside our utilitarian mindset and seriously study this concept, feeling the power of knowledge. Then, we can see how Bitcoin “plays with boundaries.”
Understanding the “horizon” is no less significant than understanding “dimensional thinking.”
The horizon comes from physics, specifically related to Einstein’s general theory of relativity. Wikipedia explains it this way: “A horizon is a boundary in spacetime satisfying prescribed conditions.”
Horizons can be further divided into various types, such as absolute horizons, event horizons, particle horizons, etc.
Since Professor Carse connected “horizon” with “Game,” the horizon is no longer a cold, physical term but has gained a more human touch.
The horizon becomes a boundary, which sounds magical, but this borrowing is nothing short of genius.
The horizon tells you that what you can’t see is your boundary. But as you move forward, what you couldn’t see before becomes visible, and the boundary is pushed further. Essentially, in an infinite game, there are no boundaries, so the horizon is a perfect example of using “something” (the horizon) to express “nothing” (no boundaries).
This is truly remarkable. Such a way of observing the world and understanding the model of the world is worth having. The above passage is worth reading twice.
The expansion of boundaries (the horizon) is continuous and almost imperceptible. The most amazing part is that it all seems to happen automatically. There are descriptions of this in ancient poetry, for example, “After passing through mountains and rivers, I thought there was no way out; suddenly, I found myself in a village shaded by willows and bright flowers,” which describes the surprise after breaking through a boundary. However, back then, we didn’t know about the “horizon.”
Now, let’s take another look at Bitcoin. Does it also have no boundaries, only horizons?
From the perspectives of participants, time, and space, Bitcoin meets the criteria. From the participants’ perspective, anyone can play Bitcoin; there are no restrictions. As for time, Bitcoin has a starting point, but no one knows where the end will be. Space is even more impressive — Bitcoin can be bought globally, and it’s impossible to ban it.
It seems that Bitcoin is horizon-based. At this point, we’ve proven that Bitcoin is an infinite game. But does that mean Bitcoin will live forever? Not necessarily.
“In an infinite game, recognizing that all things will eventually end, knowing that death is inevitable, the attitude you bring to the game is infinite, and you realize that deadlines don’t matter.” Professor Carse provides a clear explanation of the end of games in his book.
All things have a beginning and an end, and Bitcoin is no exception. Embracing life while acknowledging death is the only way forward. Only by doing so can we attain a sense of inner infinity.
So, what does “stop fussing around” in the article’s title mean?
Let me explain with a story about Chinese aunties and Bitcoin.
From stocks to gold to Bitcoin, the investment world has never lacked the presence of Chinese aunties.
Chinese aunties are daring investors, and some have made a lot of money from Bitcoin. However, even those who have made big profits on Bitcoin might still feel frustrated.
Take “Sister Li” from Wenzhou, who is in her 50s. She bought Bitcoin for 2 million yuan in August 2013 when the price was just over $600. She held on to it until it reached $6,800, making a substantial profit.
Then there’s Auntie Xu Lin from Beijing, who bought 40,000 yuan worth of Bitcoin in 2017. She later sold it when it had increased 18 times to 720,000 yuan. Her reasoning was, “You shouldn’t be too greedy when investing.”
Today, Bitcoin’s price has increased by far more than just 10 times or 18 times, so “Sister Li” and Auntie Xu Lin still feel a twinge of regret. After all, recognizing an opportunity and seizing it is rare, but their sense of missed opportunity is even stronger compared to those who never had the chance at all.
It’s a bit abstract, so let’s look at the chart below showing Bitcoin’s price. The red arrow indicates Sister Li’s trading time, and the green arrow points to Auntie Xu Lin’s trading time. Now, compare those two points with the current price. Does it feel more tangible now?
The reason for missing out on even greater opportunities is simple: these two aunties treated Bitcoin as a “finite game.” Their goal in buying was to sell, which predetermined the outcome from the start.
If you know that stocks are not just securities but also represent part ownership of a company, then you should also know that, like stocks, Bitcoin is not just a cryptocurrency but part ownership of a payment system.
As for the value of the Bitcoin system, a recent (March 11, 2021) paper titled Investigating the Adoption Factors of Cryptocurrencies — A Case of Bitcoin: Empirical Evidence From China describes it as follows:
Cryptocurrencies, as an innovative method of exchange without any physical form, boast several potential benefits such as speedy transactions, cross-border usage, low transaction fee, transparency, high security, anonymity, and privacy, and thus are expected to bring huge revolution in the future economic system.
However, unlike stocks, Bitcoin’s value growth is not realized through dividends but through its price appreciation.
In short, Bitcoin is an infinite game, and time is the only variable for Bitcoin. You should view it through the lens of value investing.
More importantly — Bitcoin is worthy of value investing.
And here’s the key point. The original quote is from Werner Heisenberg, the German physicist, Nobel laureate in 1932, and one of the founders of quantum mechanics.
I’ll borrow his words, replacing “nature” with “Bitcoin”:
We must remember that what we observe is not Bitcoin itself, but Bitcoin exposed to our method of questioning.
By borrowing this quote, I want to tell you that I might not be right.
So, stay calm and don’t act rashly.
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