What Is Cryptocurrency Game Theory: A Basic Introduction(blockgeeks.com) |
What Is Cryptocurrency Game Theory: A Basic Introduction(blockgeeks.com) |
Normally we err on the side of forgiveness, but this abuse is so outrageous that until we get a proper accounting for it, we're going to keep posting what happened at the top of the threads. I'm pretty sure there's no issue on which HN users feel more strongly, and I agree with them.
Users vouched for the current post, which is fine, but I'm going to write software to prevent that from working on sites that are banned for such a reason.
There is no "blue chain" or "red chain", there are just blocks that point to other blocks. Branches happen all the time, and sometimes those branches become the main chain. So actually, if the red chain was grown faster than the blue chain, it would become "the main chain". But then the miner's transaction in the blue chain would be ignored!
The main chain is chain with the greatest computational value, it's the chain that takes the greatest amount of CPU power to compromise (and therefore it's the most trustable). It has nothing to do with Schelling point or bounded rationality, because that suggests you can tell that a block is a "forked block" the moment it's created, but you can't.
Invalid blocks are invalid, that's one way to tell. Run the bitcoin protocol rules and you'll get the same results as everyone else.
http://oyc.yale.edu/economics/econ-159/lecture-1
https://www.youtube.com/watch?v=nM3rTU927io&list=PL6EF60E102...
Other forms of proof-of-work have been mooted, e.g. algorithms that require lots of memory, or lots of storage, but again, specialized equipment will accelerate this too, it's just that the coins aren't worth enough for people to invest in designing the hardware so far.
As for "all things can be accelerated", the question here is more "how unique is the thing being accelerated?" (and so I would agree the wording in my comment was slightly off), as this argument about the grim trigger holds up if and only if the specialized hardware being used is not valuable for other uses (including other coins).
As an example of what you can conclude with this thought process: if you are a small "startup coin" you should seriously considering a proof-of-work scheme that is weirdly unique in that it forces people to not be able to reuse hardware they have from another (particularly if more valuable) coin.
I would rather we see some more code written and less talking about game theory and other concepts.
Good article though.
Also, any attempt to kill one decentralized value system would prove to be a wasteful process in the long run since the cost to create another such system is disproportionately smaller than the cost to attack/destroy them.
As in changing the POW algorithm? That puts everyone at the same disadvantage - the attacker just has to keep outspending the legitimate miners, who will also have lost their mining power. If the miners make new ASICs, the attacker can do so as well, at presumably the same or lesser cost.
> the cost to create another such system is disproportionately smaller than the cost to attack/destroy them.
I think it's the opposite. The defenders have to keep mining power up all the time, and may have trouble coordinating on one system - the attacker only has to spend their power while they are attacking, and they can wait until any system gets popular until they mount the attack.
And if the attacker shows they're motivated and capable of outspending the defenders, they don't have to actually attack. The defenders will see that any attempt at mining is futile and never try. At least in game theory, in practice things aren't resolved that easily. :)
This is roughly the dynamic that seems to have played out with BCH. Every exchange would be better off (according to the grim trigger argument) if Bitcoin never forked, but individually they can profit from being a place to exchange BCH. The fewer exchanges "defect", the more profitable it is to defect. So BCH is now #4 by market cap.
In the very different case of Bitcoin Cash, what you saw were miners perceiving segwit as a protocol fork which would devalue the future potential of their investment in specialized mining equipment, as it changes the proof-of-work parts of Bitcoin into a form of contract verification for payment channels rather than as the one true way a transaction can be performed, so we would have expected them to revolt to maintain the rules they had invested assuming (and in fact once they were already dealing with a fork, they went ahead and made their own rule changes to benefit them: larger blocks).
BCH is still so thinly traded that this is a meaningless number.
"If they both confess, then the payoff matrix says that the outcome is (4,4)."
Is actually talking about the scenario where neither Rob nor Ben confess.
That may be the quickest solution, but do you think it would be anywhere near quick enough?
Your thought process leads to another interesting game theory puzzle: There's a benefit in creating a coin that has a unique proof of work, but as you say, there's also value in letting miners easily switch their existing rigs to mine your coin. I wonder which is actually the best choice?
The argument being that because ASICs are worthless for anything but mining that one coin, you can really accurately gauge and maintain a hashrate across the whole network. It would be crazy expensive to hoard a bunch of ASICs for a specific algorithm but not run them in hopes to launch a secret 51% attack.
With GPUs that's not really an option. Because GPUs can be used for so much more, it would be easy to see where you could suddenly have a flood of GPU power hit your chain which could be massively over 51% quite easily.
And they could be gone again just as quickly, leaving the remaining users with an impossibly high difficulty and killing off the chain (without a hard-fork to fix it).
It's a fascinating read which actually flipped my opinions on ASICs in favor of them now, I highly recommend it [0].
[0] https://blog.sia.tech/choosing-asics-for-sia-b318505b5b51
I imagine there is much danger here of thinking oneself smarter than any attackers.
The only way you can use the concept of Schelling point is to explain why so many people use Bitcoin rather than Litecoin or another slightly-tweaked variant. Much like the example in the article, if you ask anyone to pick a cryptocurrency to pay with, they are likely to say Bitcoin because it is familiar.
The reason people avoid invalid blocks is because they would have to convince every other node out there to accept it. It's a coordination issue.