Yesterday, at the end of the article, I mentioned the theory of probability. I wrote a long time ago, "God is throwing a dice?" ——Decision art and practice is interested to find out. Today’s article goes deeper into discussion. The underlying technology of Bitcoin is blockchain, and the bottom layer of blockchain is number theory. We use probability in daily trading game. On the products under the cybernetic system.

## Brief history of probability theory

In fact, the history of probability theory is very long. In the 16th century, a famous encyclopedia scholar in the Italian Renaissance called Caldano, and he was also a gambler. He was particularly keen on gambling. His book "On Gambling Games" gave some probability and basic probability. theorem.

In the 17th century, the French court began to play the dice game, throwing the dice 4 times in a row. If there was a 6 o'clock, the dealer won, otherwise the player won. In order to win, everyone went to ask the mathematician Fei Ma. The horse used the probability method to calculate the market share of the dealer, and the winning face was 52%. It is the first record of mathematics and probability theory.

- Tesla plunges 20%, calling it "Bitcoin in the automotive sector"
- What is the mission of Bitcoin? Why did Coinbase start crazy online assets? The answer is here
- SheKnows 丨 If the economic crisis, what will the blockchain do?
- Bitcoin is halving, is it a chance to make a fortune, or a disaster
- Bridge Water Fund Ray Dalio talks about paradigm shift: Will gold or bitcoin be bought in the next decade?
- 85% of Bitcoin has been dug up, and it will take 100 years to dig all

It is Fermat who put forward the well-known Fermat's theorem, and the boring theory of number theory will not elaborate. As long as it is understood that Fermat's theorem greatly promotes the development of number theory.

However, before the 18th century, there was basically no probabilistic theory of formation. Human beings were unclear about the probability and were in a chaotic state. When the lottery was issued, how to pay for a specific combination was entirely based on experience, just as the retail market retailers relied entirely on their own. I feel that investing, winning money is the right direction, and losing money will pay for it.

This is the case, the French great thinker Voltaire found a loophole in the French lottery, and made a fortune. After all, the big thinker is also eating whole grains.

When the encryption market is in the bull market, there are a lot of brick-moving parties. It is the arbitrage of the difference between the platforms. It is a loophole that exploits the price difference. After all, the platforms are independent of each other, the price difference is inevitable, and some of the bricks earned a lot of money, so that I personally think that the current short-term USDT negative premium is a very good bargain-hunting opportunity, the negative premium will not always exist. , USDT is even more unlikely to be easily knocked down. I never believed in conspiracy theory, but the imagination of the rabble is too rich, so as long as the USDT gets rid of the effects of super-issue, it is only a matter of time before returning to the high premium.

Back to the topic, probability theory is famous. Thanks to the Russian mathematician Kolmo Glov, Kolmo Glov, like Newton, Gauss, Euler, etc., is a rare all-round mathematician in history, and the same It is a teenager.

Kolmogorov published his first paper in the field of probability theory at the age of 22 (1923). At the age of 30, he published the "Basic Probability Theory", which established probability theory on the basis of strict axioms. Probability theory becomes a strict branch of mathematics.

In 1931, Kolmo Glov published an epoch-making paper on the analysis of statistical and stochastic processes, "Analytical Methods in Probability Theory," which laid the theoretical foundation for the Markov process. Since then, the Markov process has become a powerful scientific tool for later information theory, artificial intelligence and machine learning. Without the mathematical foundation of Kolmogorov Moding, today's artificial intelligence and quantitative trading lack a theoretical basis.

## Cybernetics and information theory

In the face of uncertainty in the process of probability theory trading, cybernetics and information theory in scientific methods can provide a framework of thought guidance.

Cybernetics was formally proposed by the genius scientist Norbert Wiener in 1948, but many of his ideas were formed during World War II and even earlier as visiting professors at Tsinghua University in China.

In addition, the theory related to cybernetics can be traced back to the era of Laplace in the 18th century.

However, cybernetics becomes a complete theory thanks to Wiener's contribution – it was only a knowledge point. And then it is a complete body of knowledge.

Simply put, cybernetics studies how to maintain equilibrium in a dynamic system with many internal and external uncertainties. The core of its thinking is how to use the feedback of various input signals to control the system.

Information theory is a theory of information processing and communication. It was proposed by another genius scientist, Shannon, during the Second World War and published after the war, and published after the war. Shannon uses the concept of "entropy" in physics to quantify imaginary information. From then on, humans can accurately measure the amount of information and theoretically solve the problem of efficiency of data compression storage and transmission. Information theory is cryptography. And the theoretical basis of big data.

Like cybernetics, information theory is also a new methodology. It denies that mechanism sees everything as a deterministic way of thinking. It believes that both a system and a transmitted channel have both uncertainty and interference. It is the information that is needed to eliminate these uncertainties.

## Uncertain market

Uncertainty in the trading market can be said to be very common. Global policy influence of any country has a profound impact on the price fluctuation of Bitcoin. In 2012, the Bank of Cyprus did not prudently purchase Greek government bonds, when Greek government bonds were managed. At the time of default, the Cyprus banking system suffered heavy losses, surpassing 30% of the gross domestic product of the year, and the domestic debt crisis in the country.

In response to the crisis, the Serbian government issued a solution that was opposed by the people and was terrible: a levy of 6.75% and 9.9% of the deposits for 100,000 euros and more than 100,000 euros, respectively, to raise funds, after the veto in Congress Finally, the decision was made to sacrifice the benefits of uninsured depositors to obtain a bailout, and the deposits above 100,000 euros were frozen to solve the debt problem. These misconducts have caused great panic among the general public and the middle class, as well as strong doubts about the safety of banks. Many domestic and foreign depositors are eager to take out their deposits, and even angry locals are driving bulldozers to withdraw funds. It is the 2013 Bitcoin bull market that is the tipping point.

From the Greek default bond, the black swan incident in Cyprus, led to the arrival of the bitcoin bull market, the uncertainty spread throughout the investment market.

The impact of randomness on Bitcoin is far-reaching. As we all know, bitcoin mining is the use of computing power to hash the bitcoin to get a bitcoin key, thus possessing the ownership of bitcoin. It can be said that randomness is positive. Bitcoin is an innate gene. The bitcoin market is even more volatile. Every day, the amount of information is so large that the brain can't figure it out. However, too much information is useless information. Development basically has no meaning, just like a wave of fleeting moments.

In the face of uncertainty in the trading market, how can we be independent?

Less trading, more learning, and strive to penetrate the blockchain industry, not everyone is suitable for trading. Indulge in the fog of price, wait until the blood is gone, then suddenly wake up.

In the blockchain world, some people contribute code to promote the development of bitcoin, while others make a dedicated evangelist for bitcoin science. They have already come ashore, and understand that bitcoin prices are for a while, the value of the blockchain is eternal, and the day of rooting will always come.

(Author: Bitcoin Caesar)