it looks to me that mining would be best described as being in a Pure Strategy Nash Equilibrium - cypherdoc
Highlights are mine:" A pure strategy Nash equilibrium is a profile of strategies such that each player’s (miner's) strategy is a best response ((results in the highest available payoff (block reward)) against the equilibrium strategies of the other players (miners).
A pure strategy Nash equilibrium only requires that the action taken by each agent (miner) be best against the actual equilibrium actions taken by the other players (miners), and not necessarily against all possible actions of the other players (miners). In other words, it's expected for some miners to be malicious.
A Nash equilibrium has the nice property that it is stable: if each player expects 'a' to be the profile of actions played, then no player (miner) has any incentive to change his or her action (no incentive to start cheating). In other words, no player (miner) regrets having played the action that he or she played in a Nash equilibrium." http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1968579Nice. I hadn't looked at it that way but it makes perfect sense. Nash equilibrium works well in theory, the real world is a little more messy. Pre-mass adoption there are so many outside interests seeking bitcoin failure that there are other incentives at play. Once there is more distribution and buy in, the full effects of the Nash Equilibrium will be much stronger than they are today. the Nash equilibrium is a solution concept of a non-cooperative game; therefore, i think the Nash Equilibrium takes those hostile actors into account. the minimum # of participants required to apply the theory is 2 and doesn't depend on large #'s. what's also important for all actors to know and understand, and to know that the others know, is that the longest blockchain and the POW required to construct it is mathematically immutable. b/c we know that the hashrate of the Bitcoin Network is thousands of times larger than most of the supercomputers on Earth makes the strategical decision making of each individual actor clear; don't cheat. Understood, I'm more referring to the folks that are the non-participants in the game. Lest we forget these currently vastly outnumber the participants with respect to potential game resources available to them. Game-ending scenarios are often dismissed as impossible when in fact they are merely unlikely, as are the application of non-monetary/computing power factors. Threats to date have generally been within the game players, and Nash applies well. In general I not only agree but the also salute the application of the principle. Consider however the implications if one were to throw something like stuxnet into the works or a fab level exploit into each of the main chip makers, say by coercion or covertly, and subsequently activated? There are defenses certainly, but it would be disruptive and could be timed with other types of interference. Unlikely but possible. Thankfully, we are not under serious attack or opposition, but I'd still give a BTC =~ 0 a >0 p value, and Nash holds the rest in place. we're ALL part of a Nash Equilibrium. even the gubmints, banks, and skeptics. when i decided to mine in 2011, i was fully aware that a non-economic attacker like a gubmint or bank could potentially screw my investment in BTC and mining equipment. but after reading thread after thread about the theoretical basis of a 51% attack, i decided it was worth the risk and that any such attempt would fail. that was my assessment. all the other miners are fully aware of that potential as well, yet we all plow forward. why? the open source phenomenon that represents Bitcoin should shine enough light on any such potential attacker to prevent such an attack from happening. any such attack should be temporary and able to be dealt with. Gavin has already stated what could be done as a counter measure. i think the attacker could even be identified through various means. corruption and dishonest behavior likes to be hidden. crooks don't want to be identified. i think a gubmint or bank will make the assessment that it's too politically risky an endeavor to take on which would cost them millions (billions?) in losses, not only in dollars but in trust. see this interesting study: From 1961 to 1989, the Berlin Wall divided one nation into two distinct political regimes. We
exploited this natural experiment to investigate whether the socio-political context impacts
individual honesty. Using an abstract die-rolling task, we found evidence that East Germans
who were exposed to socialism cheat more than West Germans who were exposed to
capitalism. We also found that cheating was more likely to occur under circumstances of
plausible deniability. Subjects were more likely to cheat by mis-reporting the chosen side of
the die than by making up rolls altogether. These results indicate that most people are
motivated to hide their dishonesty – either from others (Hao and Houser, 2011) or from
themselves (Mazar et al., 2008).http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2457000 |
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note this comparison chart btwn the Russell (purple line) and oil. oil peaked first, followed slightly by the Russell. things aren't well:  |
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good find and assessment. it really is fascinating to watch all these major players come around. we're on our way. |
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U really think it would survive then? Power to the people! but in reality it woul dbe a big hit... but i think it would recover... just a big hit... probably signify a major top or something on the chart.
thing is, it will never happen. Gavin and all the other devs aren't stupid enough to make such a change. they're constantly monitoring the sentiment pulse of the community and they wouldn't even dare try to increase the 21M. this is the advantage of an open source system. it enforces rational, honest behavior. |
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nice. ghash down to 27%. the Nash Equilibrium in full display. Yeah, I should have screen capped it but Discus Fish had briefly surpassed them earlier today. who cares? all of them take turns being the leader w/o anything ever becoming of it. |
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i'm tellin' ya, you'd better look the hell out if you're short:  |
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nice. ghash down to 27%. the Nash Equilibrium in full display. |
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If they instead were one of the nationale who applied bitcoin... They would have had so much wealth. Sooner or later someone will take the plunge... but not until a few more zero's are added to the right... right now credability within the dev community must be addressed, if the dev community can be trusted to make proper decisions, maybe someone would be interested (and perhaps say we will do it if we have our own developers control the source or something?) but anyways thats the central weakness of the open source model we have with bitcoin, its controlled by a select few and we dont have control over what they do or are coerced to maybe do. this is where the mind twisting comes in. say Gavin is coerced into lifting the 21M limit, say to 100M. he submits a patch, yet theoretically no one will download or use it. we're all here because we've already bought into a system that will only ever print 21M. |
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Further increases in value would only reinforce this position for some of those folk, would it not?
no. we've seen perception and buying pressure rise several times during the run ups over the last several years. ppl get MORE bullish with the price rises. it's a feedback loop like justus was saying. and it doesn't just exist in Bitcoin. it's true for all markets. Yes, but if that were the only factor, than none of the previous price bubbles should have ended before completely collapsing the USD. Certainly of that (let's call it) 55% group, some of them will change their mind in a bull market, but at the same time, when there are rapid gains there is an increase in previously bullish folk changing tunes, under the pretense that we've gone too high to sustain. So an equivalent negative feedback loop? correct, it isn't the only factor. markets move in cycles or waves; none ever move in a straight up. this is why i believe there is some validity to technical analysis and i employ it routinesly. but i also rely on the fundamentals. there are always periods of bullishness and bearishness which we will continue to see. and then there's trend and the trend in Bitcoin has clearly been up. So this might be a personal question, but seeing as how you're interested in TA of interim price action, does that mean that you actively buy and sell bitcoin? I was smart enough to see where this was headed a long time ago, and that insight has served me well over time. However, I have 0 faith in my ability to predict how and when we get there, so the best plan has always been hold (for me). Perhaps the only reason I come here everyday is to see if we've arrived yet and be amused by all the people charting our course to destinations that must be unknown to them... i just buy dips. |
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Further increases in value would only reinforce this position for some of those folk, would it not?
no. we've seen perception and buying pressure rise several times during the run ups over the last several years. ppl get MORE bullish with the price rises. it's a feedback loop like justus was saying. and it doesn't just exist in Bitcoin. it's true for all markets. Yes, but if that were the only factor, than none of the previous price bubbles should have ended before completely collapsing the USD. Certainly of that (let's call it) 55% group, some of them will change their mind in a bull market, but at the same time, when there are rapid gains there is an increase in previously bullish folk changing tunes, under the pretense that we've gone too high to sustain. So an equivalent negative feedback loop? correct, it isn't the only factor. markets move in cycles or waves; none ever move in a straight line up. this is why i believe there is some validity to technical analysis and i employ it routinely. but i also rely on the fundamentals. there are always periods of bullishness and bearishness which we will continue to see. and then there's trend and the trend in Bitcoin has clearly been up. |
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Further increases in value would only reinforce this position for some of those folk, would it not?
no. we've seen perception and buying pressure rise several times during the run ups over the last several years. ppl get MORE bullish with the price rises. it's a feedback loop like justus was saying. and it doesn't just exist in Bitcoin. it's true for all markets. |
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Sorry for not speaking your language and forgive my noobishness, but if that reddit post is true I might want to reconsider selling Bitcoin for fiat anytime soon?
definitely |
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It's already a no-brainer to borrow long term in USD and buy and hold BTC.
What we're waiting for to see hyperbitcoinization is for that knowledge to rapidly spread through the pool of potential borrowers.
you keep talking like that and it's sure to happen sooner than later... btw, this withdrawal of liquidity by the Fed tapering back QE is going to leave a lot of risk assets hanging out to dry. the charts are lining up nicely for the next pump in Bitcoin. |
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I read that some time ago, and assumed this is what the fed research modeling might look like. When it becomes a no lose scenario to borrow USD to buy bitcoin, then the whole thing will implode at the speed of banking. i've drawn attention to this mechanism for a while now; short USD to go long Bitcoin. |
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we should be bottoming soon.
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There's some question about the authenticity of that posts, but assuming it's true, I can see one thing I bet his analysis missed: Our best case scenarios are modeled upon current bitcoin adoption rates which have simulated a tipping point for the year 2026 (worst case 2021); this time frame projects the Fed (via the dollar) to lose its dominant global monetary policy maker status - instead everything will superceded by bitcoin. The mere existence of this kind of knowledge sets up a positive feedback loop. When the insiders know the game will be over between 2021 and 2026, some of them will start moving for the exits with a goal of being out by that time. The actions of insiders to exit from a collapsing system by nature accelerate the process of collapse. The insiders will notice the acceleration, and everyone who is preparing their exit will accordingly accelerate their plans. This causes further acceleration of the collapse... If that Reddit post is true, then the tipping point will arrive much sooner than 2021. i tend to believe the post. i also think you're correct about acceleration based on the projected timeframe btwn 2021 & 2026. but that is consistent with what many of us have given as our own time horizon for the Bitcoin phenomenon. my outer bound has always been 2020. |
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