In this paper we shall consistently third quantize modified gravity. Then weshall analyse certain aspects of virtual black holes in this third quantizedmodified gravity. We will see how a statistical mechanical origin for theBekenstein-Hawking entropy naturally arises in this model. Furthermore, in thismodel the area and thus the entropy of a real macroscopic black hole isquantized. Virtual black holes cause loss of quantum coherence and this givesan intrinsic entropy to all physical systems which can be used to define adirection of time and hence provide a solution to the problem of time.
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