For any nonnegative integer $n$, let $\mu(n)$ be $1$ if the binary expression of $n$ contains even number of ones; and $-1$ if the binary expression of $n$ contains odd number of ones. For example, $\mu(5)=1$, since $5=101$ in binary.
I want to show $$\sum_{n = 0}^\infty \mu(n)x^n = \prod_{n = 0}^\infty \left(1-x^{2^n}\right) \tag{1}$$ by showing that $$\prod_{n = 0}^{k} \left(1-x^{2^n}\right) = \sum_{n = 0}^{2^{k+1}-1} \mu(n)x^n, \tag{2}$$ for all nonnegative integer $k$ using induction on $k$.
For $k=0$, we have $$\prod_{n=0}^0 (1-x^{2^n}) = 1-x = \mu(0)+\mu(1)x = \sum_{n=0}^{2^{0+1}-1} \mu(n)x^n.$$ Hence, the base case is done. Now, assume that $(1)$ holds for $k=m$. I want to show that $(1)$ holds for $k=m+1$. Notice that \begin{align*} \prod_{n=0}^{m+1}(1-x^{2^n}) &= (1-x)(1-x^2)\ldots(1-x^{2^m})(1-x^{2^{m+1}}) \\ &= (\mu(0)+\mu(1)x+\mu(2)x^2+\cdots+\mu(2^{m+1}-1)x^{2^{m+1}-1})(1-x^{2^{m+1}}) \\ &= \mu(0)+\mu(1)x+\mu(2)x^2+\cdots+\mu(2^{m+1}-1)x^{2^{m+1}-1}+\mu(2^{m+1})x^{2^{m+1}}+\mu(2^{m+1}+1)x^{2^{m+1}+1} \\ & \quad + \cdots + \mu(2^{m+2}-1)x^{2^{m+2}-1} \end{align*} holds if and only if $$-\mu(i)=\mu(2^{m+1}+i) \tag{3}$$ for all $i \in \{0,1,2,\ldots,2^{m+1}-1\}$. To show $(3)$, I use the relation (which is not proved yet) $$\mu(2^{m+1}+i)=\mu(2^{m+1})\mu(i) \tag{4}$$ for all $i \in \{0,1,2,\ldots,2^{m+1}-1\}$. This is because if $(4)$ holds, then Equation $(3)$ becomes $$-\mu(i)=\mu(2^{m+1})\mu(i) \implies \mu(2^{m+1})=-1,$$ which is true for any nonnegative integer $m$.
On the other hand, I have a relation $$\mu(n)=(-1)^{\sum_{j=0}^{\lfloor \log_2 (n+1) \rfloor} \lfloor \frac{n}{2^j} \rfloor} \qquad \tag{5}$$ for any nonnegative integer $n$. But also, I have no idea to prove this mathematically.
So here, my question is, how to show that the Equation $(4)$ hold? Also, how to show the relation $(5)$ mathematically? I have no idea to prove it till now. Any idea please? Many thanks in advanced for the helps.
Hint:
In (4) it's not nocessary to provide more details as its correctness is obvious. You could add some information with respect to binary representation if you like.
In (5) it is sufficient to state that the right hand side counts the number of ones in binary notation which is just the definition of $\mu$.
Using a somewhat more compact notation we can write the proof by induction as follows:
The base step $k=0$ has already been shown.
Induction hypothesis: $k=m$ We assume \begin{align*} \prod_{n=0}^{m}\left(1-x^{2^{n}}\right)=\sum_{n=0}^{2^{m+1}-1}\mu(n) x^n\tag{1} \end{align*}
Comment:
In (2.1) we apply the induction hypothesis twice. Note, the left-hand sum of (2.1) contains as exponents of $x$ all non-negative numbers less than $2^{m+1}$, whereas the right-hand sum contains the same numbers as exponents each increased by $2^{m+1}$. This means in binary notation that each summand has precisely one bit additionally set, namely the most significant bit at position $m+2$ (counting starts from zero).
In (2.2) we shift the index of the right-hand sum to start with $n=2^{m+1}$. We adopt the exponent of $x$ accordingly. We can still write $\mu(n)$ since we respect the additional power $2^{m+1}$ by merging the minus sign into it. The relationship between $\mu(n)$ in (2.1) and (2.2) is \begin{align*} \mu(n)=-\mu(n+2^{m+1})\qquad\qquad 0\leq n\leq 2^{m+1}-1 \end{align*} Taking $m=1$ for instance we have \begin{align*} \mu(0)=-\mu(0+2^2)=-\mu(4)\\ \mu(1)=-\mu(1+2^2)=-\mu(5)\\ \mu(2)=-\mu(2+2^2)=-\mu(6)\\ \mu(3)=-\mu(3+2^2)=-\mu(7)\\ \end{align*} which gives in binary notation \begin{align*} \mu(0_2)&=-\mu(0_2+100_2)=-\mu(100_2)\\ \mu(1_2)&=-\mu(1_2+100_2)=-\mu(101_2)\\ \mu(10_2)&=-\mu(10_2+100_2)=-\mu(110_2)\\ \mu(11_2)&=-\mu(11_2+100_2)=-\mu(111_2)\\ \end{align*}