Glossary

This glossary provides brief definitions of key terms used throughout this book. For deeper treatment, see the relevant chapters.

Affordance — A possibility for action that an environment offers to an organism, directly perceived rather than inferred. Introduced by psychologist James Gibson. In this book, Bitcoin’s affordances include auditability, verifiable scarcity, permissionless access, and externalized trust.

Alliesthesia — The phenomenon by which the same external stimulus produces different hedonic responses depending on the organism’s internal state. A cold drink is pleasant when hot, unpleasant when cold. Coined by physiologist Michel Cabanac in 1971. In this book, alliesthesia provides the physiological grounding for variable valuation.

Allostasis — Anticipatory physiological regulation—preparing for predicted future demands rather than merely correcting current deviations. Contrasted with homeostasis (reactive error-correction). Most economic transactions are allostatic: purchasing groceries before hunger, insurance before catastrophe, savings before retirement.

Chain Tip — The most recent block in the Bitcoin blockchain; the current state of the ledger. Functions as a “reflective surface” showing the aggregate result of all prior transactions.

Constructed Value — The central framework of this book. Value is not an intrinsic property of objects, nor a subjective state in minds, but is enacted through transactions between embodied organisms and their environments. Value is constructed at the moment of transaction and leaves traces in physical substrate.

Enaction — A theory of cognition developed by Varela, Thompson, and others. Cognition is not internal information processing but active engagement of an embodied organism with its environment. Applied to economics: economic agents are not abstract preference-functions but perceiving, acting organisms whose valuations emerge through interaction.

Friction — The resistance encountered when organisms attempt to transact. Includes transaction friction (fees, costs), temporal friction (delay), cognitive friction (complexity), regulatory friction (institutional barriers), access friction (barriers to participation), and liquidity friction (difficulty of conversion). In this book, friction is proposed as the central variable of economic analysis.

Homeostasis — The tendency of biological systems to maintain stable internal conditions by correcting deviations from equilibrium. Economic behavior can be understood as homeostatic: organisms transact to resolve internal deficits. Contrasted with allostasis (anticipatory regulation).

Interoception — The sensing of internal bodily states: hunger, thirst, fatigue, temperature, pain, arousal. The upstream cause of valuation in the constructed value framework—organisms act because they sense internal states that require resolution.

Ledger — A record of transactions. In Bitcoin, the ledger is distributed across thousands of nodes, cryptographically secured, and practically immutable. Functions as a “scaffold” for economic activity.

Liking — The hedonic pleasure experienced upon consumption of a reward. Neurally distinct from wanting; mediated by opioid and endocannabinoid systems. Transactions do not directly reveal liking—only subsequent behavior (satisfaction, repeat purchase, complaints) captures the hedonic outcome.

Proof-of-Work — Bitcoin’s consensus mechanism. Miners expend computational energy to produce valid blocks; the difficulty of this work makes the ledger resistant to manipulation. The “friction” that provides security.

Scaffold — In cognitive science, an external structure that supports and extends cognitive processes (a notebook scaffolds memory; a calculator scaffolds arithmetic). In this book, Bitcoin functions as a scaffold for trust—externalizing verification, record-keeping, and rule enforcement into physical substrate.

Stratigraphy — The layered structure of accumulated deposits, borrowed from geology. In Bitcoin, each block is deposited atop the previous, creating a stratigraphic history. Deeper layers are more settled and harder to disturb. The current state is the surface; the history is the depth beneath.

Sufficient Statistic — A statistical concept: a quantity that contains all the relevant information for inference about a parameter. In this book, the transaction is a “sufficient statistic” for valuation—it compresses all the upstream causation (internal states, motivations, meanings) into an observable trace.

Timechain — An alternative term for blockchain, emphasizing the temporal structure: blocks are ordered in time, each cryptographically linked to its predecessor, creating an immutable sequence. Preferred by some Bitcoiners to emphasize that the chain is fundamentally a time-ordering mechanism.

Trace — The mark left by a transaction. In traditional systems, traces are fragile (memory fades, records conflict). In Bitcoin, traces are electromagnetic states persisting across thousands of nodes, secured by accumulated thermodynamic work.

UTXO (Unspent Transaction Output) — Bitcoin’s accounting model. Rather than maintaining account balances, Bitcoin tracks individual transaction outputs that have not yet been spent. Each transaction consumes UTXOs and creates new ones.

Wanting — The motivational pull toward a stimulus; incentive salience. Neurally distinct from liking; mediated by dopamine systems. Transactions reveal wanting—the organism was motivated enough to overcome friction. Wanting can be sensitized (as in addiction) even when liking diminishes.