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What Is Cryptocurrency Game Theory: A Basic Introduction

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Re: What Is Cryptocurrency Game Theory: A Basic Introduction

#41

Post by SkyMarshal »

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.

This doesn't work when the attacker is a nation state, b/c the PoW change damages all miners equally but the nation state is not playing by the same economic rules, is politically motivated rather than financially, does not need to remain profitable to continue attacking, and is better able to absorb the loss and continue the attack with new hardware.

Re: What Is Cryptocurrency Game Theory: A Basic Introduction

#44

Post by eof »

zby wrote: post #40
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.

yes but if you mine a valid block around the same time someone else mines a random block you can't know until another block is mined (and even then, you might not know)

Re: What Is Cryptocurrency Game Theory: A Basic Introduction

#45

Post by dang »

Sorry all, but this site is banned on Hacker News for having used a spam service to buy fake upvotes.

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.

Re: What Is Cryptocurrency Game Theory: A Basic Introduction

#46

Post by michaelchisari »

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 may be the quickest solution, but do you think it would be anywhere near quick enough?

Re: What Is Cryptocurrency Game Theory: A Basic Introduction

#47

Post by zby »

eof wrote: post #44
zby wrote: post #40

Earlier quoted context omitted.

"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.

yes but if you mine a valid block around the same time someone else mines a random block you can't know until another block is mined (and even then, you might not know)

'yes but'? What you are saying is true - but it does not contradict my point in any way. The choice is between making an valid or invalid block - and the Schelling point is making a valid block. Another case is if you see a fork with a shorter and longer branch - then adding to the longer branch is also a Schelling point.

Re: What Is Cryptocurrency Game Theory: A Basic Introduction

#48

Post by phailhaus »

zby wrote: post #47
eof wrote: post #44

Earlier quoted context omitted.

yes but if you mine a valid block around the same time someone else mines a random block you can't know until another block is mined (and even then, you might not know)

'yes but'? What you are saying is true - but it does not contradict my point in any way. The choice is between making an valid or invalid block - and the Schelling point is making a valid block. Another case is if you see a fork with a shorter and longer branch - then adding to the longer branch is also a Schelling point.

Not really...you're not avoiding the invalid block because it's "familiar" to use valid blocks. You're avoiding the invalid block because anything built on it is also invalid so all of those transactions are ignored.

Re: What Is Cryptocurrency Game Theory: A Basic Introduction

#49

Post by zby »

phailhaus wrote: post #48
zby wrote: post #47

Earlier quoted context omitted.

'yes but'? What you are saying is true - but it does not contradict my point in any way. The choice is between making an valid or invalid block - and the Schelling point is making a valid block. Another case is if you see a fork with a shorter and longer branch - then adding to the longer branch is also a Schelling point.

Not really...you're not avoiding the invalid block because it's "familiar" to use valid blocks. You're avoiding the invalid block because anything built on it is also invalid so all of those transactions are ignored.

Those transactions are ignored because nobody will attach to that branch - and they don't attach to it because it is a Schelling point to attach to a valid branch.

Re: What Is Cryptocurrency Game Theory: A Basic Introduction

#50

Post by phailhaus »

zby wrote: post #47
eof wrote: post #44

Earlier quoted context omitted.

yes but if you mine a valid block around the same time someone else mines a random block you can't know until another block is mined (and even then, you might not know)

'yes but'? What you are saying is true - but it does not contradict my point in any way. The choice is between making an valid or invalid block - and the Schelling point is making a valid block. Another case is if you see a fork with a shorter and longer branch - then adding to the longer branch is also a Schelling point.

It's not a Schelling point to attach to a valid branch if the software itself rejects invalid blocks.
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