The reason [James Clerk] Maxwell's Demon cannot exist is that it does take resources to perform an act of discrimination. We imagine computation is free, but it never is. The very act of choosing which particle is cold or hot itself becomes an energy drain and a source of waste heat. The principle is also known as "no free lunch." We do our best to implement Maxwell's Demon whenever we manipulate reality with our technologies, but we can never do so perfectly; we certainly can't get ahead of the game, which is known as entropy. All the air conditioners in a city emit heat that makes the city hotter overall. While you can implement what seems to be a Maxwell's Demon if you don't look too far or too closely, in the big picture you always lose more than you gain. Every bit in a computer is a wannabe Maxwell's Demon, separating the state of "one" from the state of "zero" for a while, at a cost. A computer on a network can also act like a wannabe demon if it tries to sort data from networked people into one or the other side of some imaginary door, while pretending there is no cost or risk involved. Jaron Lanier
About This Quote

"No free lunch" means that there is no such thing as a free lunch. You can get something for nothing, but you have to pay for it. "Maxwell's Demon" is a thought experiment based on the work of James Clerk Maxwell, who studied electricity and magnetism. Imagine that you have a magic box, called a demon, and inside the demon there is a tiny person.

This tiny person has two switches: one turns him on and the other turns him off. Every time this tiny person presses the "on" switch he gets one bit of information; every time he presses the "off" switch he gets another bit of information. But if he presses both switches at once he gets two bits of information! The demon finds out what state of mind this tiny person is in (1 or 0) and then gives him specific information accordingly.

This thought experiment has inspired computer scientists to create computers that can do things like sorting data from networked people into one or the other side of some imaginary door without having to pay any kind of cost or risk. However, scientists have also found that no matter how much power these machines consume, they still cannot beat Maxwell's Demon in producing useful information at a cost.

Source: Who Owns The Future?

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