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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

#51

Post by zby »

phailhaus wrote: post #50
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.

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

Then it is a Schelling point to use the standard software.

Re: What Is Cryptocurrency Game Theory: A Basic Introduction

#52

Post by phailhaus »

zby wrote: post #51
phailhaus wrote: post #50

Earlier quoted context omitted.

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

Then it is a Schelling point to use the standard software.

No, they don't just use the software because it "feels familiar". Everyone is acting in their best interests, nobody is going to sit in a sub-optimal position just because they can't be bothered. If you use non-standard software, then everyone else will reject your proposed blocks.

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.

Re: What Is Cryptocurrency Game Theory: A Basic Introduction

#53

Post by zby »

phailhaus wrote: post #52
zby wrote: post #51

Earlier quoted context omitted.

Then it is a Schelling point to use the standard software.

No, they don't just use the software because it "feels familiar". Everyone is acting in their best interests, nobody is going to sit in a sub-optimal position just because they can't be bothered. If you use non-standard software, then everyone else will reject your proposed blocks. 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 slig…

When people choose to meet at Central Station it is also in their interest - this is the same mechanism. It is a case where it is beneficial for people to choose the same thing - and people choose something because they believe others will choose it as well.

Re: What Is Cryptocurrency Game Theory: A Basic Introduction

#54

Post by solotronics »

fiatjaf wrote: post #15
solotronics wrote: post #3

Earlier quoted context omitted.

its entirely game theory because the only way to secure these distributed systems is if the participants all benefit most by enforcing the code and not deviating

All protocols of the world were thought with "game theory" in mind. They just didn't call it by that fancy name.

In a way but I believe it is less direct in other examples. TCP was not built in a way with game theory in mind to give reward to the participants. I believe BTC will thrive because the users and miners are incentivized to strengthen and enforce the system instead of attack it, this was an important and purposeful part of the design.

Re: What Is Cryptocurrency Game Theory: A Basic Introduction

#55

Post by phailhaus »

zby wrote: post #53
phailhaus wrote: post #52

Earlier quoted context omitted.

No, they don't just use the software because it "feels familiar". Everyone is acting in their best interests, nobody is going to sit in a sub-optimal position just because they can't be bothered. If you use non-standard software, then everyone else will reject your proposed blocks. 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 slig…

When people choose to meet at Central Station it is also in their interest - this is the same mechanism. It is a case where it is beneficial for people to choose the same thing - and people choose something because they believe others will choose it as well.

Yes, that makes sense when you're talking about why a person would choose to transact with Bitcoin. It's not "invalid" to choose Litecoin, it's just more familiar and easier to use Bitcoin. Schelling point is about social familiarity.

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.

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