David Orrell argues that quantum mechanics, not Bitcoin, is the future of economics, and offers deeper insights into the financial system. Quantum economics surpasses classical theories by encompassing complexities and accurately predicting economic behavior. Orrell highlights the potential of quantum models in social sciences and decision making, challenging the assumptions of classical economics.
David Orrell, mathematician and acclaimed author, argues that the future of the economy does not lie in trendy cryptocurrencies like Bitcoin. Rather, it is the application of quantum mechanics.
Orrell, who earned his doctoral degree in mathematics from the University of Oxford, suggests that the same quantum models that can be useful in describing the physical processes of the very small are also useful in studying the flow of information in economics.
This innovative approach, known as quantum economics, promises a more precise and nuanced understanding of financial systems, overcoming the limitations of classical economic theories.
In a recent exclusive interview with The Quantum Insider, Orrell explained that classical economics, which is based on the same type of binary mathematics that underpins classical computers, does not offer enough depth to truly model the economy.
Classical computers use bits to perform calculations. Basically, these are on/off switches that can direct programs. However, in quantum computing, bits are replaced by qubits. While bits can be on or off, qubits can be on, off, both on and off at the same time, and neither on nor off at the same time.
Quantum Economy, Not Bitcoin
Classical economic theories have long been the basis of financial analysis and prediction, relying heavily on equilibrium models to forecast market behavior. These models, while fundamental, often fail to ignore the inherent complexities and uncertainties of real-world economic systems. Despite its innovative approach to decentralization and security, Bitcoin and similar cryptocurrencies still operate within these classic frameworks, thus inheriting their limitations.
Quantum economics, however, embraces these complexities and draws parallels with the wave-particle duality of quantum particles to model economic phenomena. Orrell emphasized that quantum economics leverages quantum models as mathematical tools to more effectively analyze and predict economic behavior. According to him, just as quantum probability is fundamental to understanding physical processes, it can also illuminate economics:
“I discovered that people were using quantum models in the social sciences for things like decision making; in other words, how to use a quantum model to inform decision making.
Just like in normal economics, instead of making completely rational decisions all the time, we find that other things are happening in the background that interfere with thought processes.”
Therefore, quantum models could account for non-rational behaviors that affect economic decisions. This approach offers a more complete framework for understanding the flow of money and information in the financial system. This challenges the traditionally rational assumptions of classical economics.
Mathematician: Bitcoin Victim of Market Fluctuations
He also reflected on an analogy between the binary nature of traditional computing and the capabilities of qubits in quantum computing. This paradigm shift, Orrell suggested, could revolutionize economic modeling and decision-making by embracing uncertainty and complexity:
“A qubit can be compared to a spectrum of colors, offering different shades and complexities. It’s not just zero or one. The qubits are entangled; They interact with each other, introducing uncertainty in the measurement. This difference is what sets it apart. And as I mentioned, the key point is to demonstrate that models based on this principle can be profitable and effective.”
While Bitcoin has revolutionized the concept of decentralized finance, it remains confined to the paradigms of classical economic theories. These often fail to capture the full spectrum of human behavior and market fluctuations.
Orrell believes that a greater understanding of quantum principles could lead to innovative economic models and strategies, benefiting the global financial system.
By Leonardo Perez
