Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

What Is Cryptocurrency Game Theory: A Basic Introduction

blockgeeks.com

Post reply on HN
Print view View original

31–40 of 55 posts

Re: What Is Cryptocurrency Game Theory: A Basic Introduction

#31

Post by ganwar »

legohead wrote: post #30

What if a country, like Russia, decided it wanted to destroy bitcoin because of a threat to its currency? They have the resources to build up huge mining power and attack the chain for majority, and cause havoc. Is there any kind of protection for this scenario? Would all the other miners just decide to ignore these new jerky miners?

The quickest solution in such a case would be a POW change that can put Russian miners at a significant disadvantage. Significant could be a factor of 10 or larger.

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.

Re: What Is Cryptocurrency Game Theory: A Basic Introduction

#32

Post by Spellman »

vit05 wrote: post #26

There is a great class of Game Theory for free on Youtube. It is from YaleCourses with the professor Ben Polak. http://oyc.yale.edu/economics/econ-159/lecture-1 https://www.youtube.com/watch?v=nM3rTU927io&list=PL6EF60E102...

Probably my favorite Yale Course to date!

Re: What Is Cryptocurrency Game Theory: A Basic Introduction

#33

Post by PretzelPirate »

kanzure wrote: post #29
phailhaus wrote: post #21

Ooh, he was doing so well but his explanation for why users use the main chain instead of a forked chain betrays a fundamental misunderstanding of the blockchain. 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…

> 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.

You often get two valid blocks at the same time, and whichever one gets the most blocks built on top of it wins.

Re: What Is Cryptocurrency Game Theory: A Basic Introduction

#34

Post by maxerickson »

saurik wrote: post #11
joosters wrote: post #9

Earlier quoted context omitted.

All proof-of-work algorithms can be accelerated by specific hardware of some kind or another. Bitcoin is perhaps the extreme example, with ASIC miners. But coins using other algorithms are mined by using top-end graphics cards, which is still a form of specialized hardware. There's no algorithm that can't improve upon a standard computer. Other forms of proof-of-work have been mooted, e.g. algorithms that require lot…

A top-end graphics card has other uses and other value, and is something a large number of people (myself included) already own; and most importantly: they can always be used to mine a different coin, which entirely removes them from contention as "specialized" as used in this article (as the entire argument was based around how the hardware would not be useful for a different coin). As for "all things can be acceler…

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 imagine there is much danger here of thinking oneself smarter than any attackers.

Re: What Is Cryptocurrency Game Theory: A Basic Introduction

#35

Post by phailhaus »

kanzure wrote: post #29
phailhaus wrote: post #21

Ooh, he was doing so well but his explanation for why users use the main chain instead of a forked chain betrays a fundamental misunderstanding of the blockchain. 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…

> 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.

True, but I'm referring to valid blocks.

Re: What Is Cryptocurrency Game Theory: A Basic Introduction

#36

Post by saosebastiao »

legohead wrote: post #30

What if a country, like Russia, decided it wanted to destroy bitcoin because of a threat to its currency? They have the resources to build up huge mining power and attack the chain for majority, and cause havoc. Is there any kind of protection for this scenario? Would all the other miners just decide to ignore these new jerky miners?

Control stratification is a legitimate threat to bitcoin, but I think your fears of threats to a national currency are overblown. There are significant advantages to floating currencies, and there isn't much a cryptocurrency can do to attack it. Russia has magnitudes more control over the Ruble's future than any competing currency ever could.

Re: What Is Cryptocurrency Game Theory: A Basic Introduction

#37

Post by tveita »

ganwar wrote: post #31
legohead wrote: post #30

What if a country, like Russia, decided it wanted to destroy bitcoin because of a threat to its currency? They have the resources to build up huge mining power and attack the chain for majority, and cause havoc. Is there any kind of protection for this scenario? Would all the other miners just decide to ignore these new jerky miners?

The quickest solution in such a case would be a POW change that can put Russian miners at a significant disadvantage. Significant could be a factor of 10 or larger. 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.

> The quickest solution in such a case would be a POW change that can put Russian miners at a significant disadvantage.

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. :)

Re: What Is Cryptocurrency Game Theory: A Basic Introduction

#38

Post by DSMan195276 »

kanzure wrote: post #29
phailhaus wrote: post #21

Ooh, he was doing so well but his explanation for why users use the main chain instead of a forked chain betrays a fundamental misunderstanding of the blockchain. 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…

> 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.

He's not talking about a hard fork, where blocks from the new fork are invalid on the old fork. He's just talking about two miners finding a new block at approximately the same time. They're both valid, but only one can become part of the 'main' chain, the other will eventually be lost as nobody continues to mine on top of it.

Re: What Is Cryptocurrency Game Theory: A Basic Introduction

#39

Post by ojr »

paulgb wrote: post #8

Good overview and I agree with most of it, but I think the power of the grim trigger is overrated here. In the monarchy metaphor, the threat of defection is death. In the crypto example, it's crypto collapsing. As long as the defectors can cash out to fiat before the collapse they are better for it. This is roughly the dynamic that seems to have played out with BCH. Every exchange would be better off (according to th…

I think a better grim trigger analogy is the market cap of Ethereum surpassing Bitcoin, it proves the digital scarcity of Bitcoin doesn't matter and that opens the possibility of many kings/protocols to be dominant

Re: What Is Cryptocurrency Game Theory: A Basic Introduction

#40

Post by zby »

phailhaus wrote: post #21

Ooh, he was doing so well but his explanation for why users use the main chain instead of a forked chain betrays a fundamental misunderstanding of the blockchain. 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…

"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." - if you mine an invalid block you can tell that it will not be part of the main chain. In this sense mining a valid block is a Schelling point - because it is what you expect others expect.
Post reply on HN