For a long time, Bitcoin has been simply regarded as a cryptocurrency or a decentralized ledger based on blockchain technology. However, a deeper analysis of its architecture reveals that Bitcoin is not just a single blockchain technology, but a complex adaptive system composed of three different but interrelated formal systems. Understanding this essence helps us better appreciate Bitcoin’s uniqueness and reflect on design choices made in other cryptocurrencies.
Bitcoin’s core consists of the following three types of formal systems:
1. Ownership based on UTXO bound to keys and mapped 1:1 to human individuals (a distributed human-machine interactive formal system):
The value and ownership of Bitcoin exist in the form of unspent transaction outputs (UTXOs). Each UTXO represents a specific amount of Bitcoin and is bound to one or more public keys (addresses). These public keys are controlled by individuals who possess the corresponding private keys, forming a 1:1 mapping relationship between UTXOs and human individuals. This human-machine interactive formal system is distributed: each user’s wallet stores information about the UTXOs they own and uses private key signatures to authorize transactions, enabling peer-to-peer value transfer. Each UTXO can be seen as a micro formal system for human-machine interaction, recording the transfer of value and changes in ownership. The entire UTXO ledger state exists in a distributed manner across the wallets of network participants.
2. A time-series system of transaction sets composed of Block and Chain data structures (a centralized Blockchain validation structure):
In contrast to the distributed UTXO system, Bitcoin’s blockchain is a centralized overall structure composed of blocks containing transaction records, linked in chronological order. The core function of this blockchain is to validate the legitimacy of transactions, primarily by checking whether the UTXO signatures in transactions match the private key owners of those UTXOs. Thus, the blockchain validates the ownership transfer in the distributed human-machine interaction formal system. Additionally, the blockchain verifies the results of distributed miners’ proof-of-work. Each new block includes a Nonce that miners competitively compute to meet the current difficulty requirement. The entire network can easily verify this Nonce using simple hash calculations. Hence, the blockchain, as a unified and replicable overall structure, serves to validate both the ownership of the distributed UTXO system and the correctness of the distributed mining process.
3. A distributed NP-solving formal system (Miners):
The security of the Bitcoin network relies on a distributed NP-solving system—miners. These miners are independent agents who consume resources such as electricity to perform massive amounts of hash calculations, competing to find a Nonce that meets the current difficulty target. This process of finding the Nonce is essentially an NP-solving problem: it is difficult to find a solution quickly but easy to verify once found. When a miner successfully finds a Nonce and packages a new block, it broadcasts the block to the entire network, which other nodes then verify and append to the longest chain. Through this distributed competition and the longest chain consensus mechanism, Bitcoin achieves ledger security without centralized institutions. The distributed nature of miners means there is no single point of control, and the proof-of-work mechanism effectively prevents malicious attacks.
Bitcoin’s Complex Adaptivity:
The brilliance of Bitcoin lies in the interplay between these three formal systems. The distributed UTXO system gives users direct control over their assets and enables peer-to-peer transactions, leading to the emergence of electronic monetary value. The centralized blockchain provides a unified and trustworthy platform for verifying these distributed transactions and maintaining the system’s overall state. The distributed miner system, through its NP-solving process, ensures the continual updating and security of the blockchain. Each block in the blockchain is a consensus result emergent from nonlinear interactions among distributed miners, and this emergent property is a key source of Bitcoin’s security.
Ethereum’s Misunderstandings and Structural Issues:
In contrast to Bitcoin’s triadic structure, Ethereum and some other cryptocurrencies tend to unify these three formal systems into a single blockchain structure. For example, Ethereum centralizes its distributed account state into a unified world state tree, which exists in the blockchain rather than being distributed across individual users like Bitcoin’s UTXO model. Meanwhile, Ethereum’s BFT POS consensus mechanism is also directly integrated into the overall blockchain structure. This approach of consolidating all functions into a single blockchain formal system leads to problems such as “perceptual closure” and “structural centralization.” While Ethereum’s EVM is powerful, it is closed and cannot directly perceive or process external real-world information. Furthermore, centralizing the account system into a world state tree results in the ownership of the account system belonging to smart contract developers, rather than to individual users themselves.
The root of these structural choices lies in a misunderstanding of Bitcoin’s technology—viewing it merely as a non-Turing-complete blockchain. However, as the above analysis shows, Bitcoin is in fact a complex adaptive system ingeniously composed of three different formal systems.
Insights from the GEB Project:
Understanding Bitcoin’s triadic structure, and the choices and potential issues in formal system design in systems like Ethereum, is critical for building more advanced complex adaptive systems. The GEB project draws on these lessons and aims to construct a complex adaptive system capable of perceiving reality. In its design of formal systems, the GEB project places greater emphasis on balancing distributed and centralized structures, integrating multiple types of formal systems, and effectively incorporating external real-world information into system operations—thus breaking through the “perceptual closure” limitation of current blockchain technologies. In short, Bitcoin’s uniqueness lies in the fact that it is not a single blockchain, but a complex adaptive system composed of a distributed human-machine interactive UTXO system, a centralized blockchain validation structure, and a distributed NP-solving miner system. This sophisticated architectural design endows Bitcoin with tremendous vitality and security, and offers valuable insights for understanding and building future complex adaptive systems.
