A pseudo Japanese with a fall for mathematics creates an algorithm / equation in which there are a limited number of solutions, the former are relatively easy to calculate, and then become increasingly difficult to find (= bitcoin).
So far so good but who has the brilliant idea of turning this into currency? If it is limited the first ones to enter the game are the ones that gain the most.
+1 for theory like this  |
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And the more i think about it, the more i think bitcoin has all quality to be a good thing for trader and big investors, as in the end, all the market value is 100% determined by investors, and they all have the same interest to see the coin rising, and there is not really anything that can truly burst the bubble because there is nothing to index the 'real value' on, all the value is determined 100% by investors, without regulation, or independant expert who can say how much a bitcoin should be worth.
Well, most speculative assets need some "bootstrapping" value. Now, bitcoin is not entirely value-less, because it does have a (small) economic value, namely all the economic exchange it made possible or cheaper than could have been achieved with other means of payment (mainly fiat). But apart from remittance where you might win somewhat, trying to hide from taxes, and mainly, dark markets, I don't see where the economic value of bitcoin resides. Most of what you can do with bitcoin, you can just as well do it with fiat, and in those heralded cases where this would not be the case (say, in developing countries), bitcoin didn't really take off. I'm truly sorry about that, because when I learned about bitcoin, I *was* part of the useful idiots being enthusiastic about that. But as far as I can see, bitcoin has only a rather small niche application of true economic value, and its design errors/flaws make that this is exactly where it is now being hurt. So I wonder whether this small "true, economic value" is strong enough to bootstrap the huge speculative value of bitcoin. Moreover, I think that anonymous coins like monero are much, much better suited for this niche. To me it still seem fundementally different from the traditional trading thing where the speculative value is still more or less indexed to the utility value, maybe the utility value is over valuated, even largely, but the main value still come from the utility value, like google or facebook. Here anyone would be hard pressed to come with solid figure on the utility value of bitcoin, the adoption rate in developping country, how capable it is to improve on existing solution for certain market, and even more importantly, how the profits are made, and where they get at. If you look at the buisness model from different angle, taking all in account, there is not many way in which it looks really sound. And today i do'nt think you could say it's even that the utility value is over valuated, or that the speculative value is still really pegged to the utility value at all. And i think there are subtle difference with classical scheme even if they can look similar in some aspect like the greater fool game or classic ponzi, or speculative bubble based on over valued utility economy, it become of model of investment of its own, and as long as people keep buying it at the price, there is no reason for it to go down, and as long as you don't consisder it as investment in technology development, or based on utility value, or potential future utility value, but as a sort of poker game to keep the token price high that can be easily manipulated by brutal market force, without any kind of friction or anything that can prevent market value to be disconnected from actual speculative value, no problem of transport, or physicality of the asset, no third party or escrow for the value to change hand, still very low tracability , it has everything to be a very good profile for brutal sepculation, and not speculation based on technology developpment or future utility value. Maybe the volatlity is not that high, but i'd say it's still much higher than with most other trading market, in the global stock market even fluctuation of 1% are a big thing  |
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Awaiting the ICO take place, i started to work on a script engine to make it even easier to create blockchain and define node parameters to connect to other blockchain
let NODE_GFX_OBJECT configuration = `
{
"name":"purenode",
"seed_node" :
{
"host":"iadix.com",
"port" : 16714
},
"magic":0xD9BEFECA,
"version":60018,
"sign_mod":"ecdsa",
"pubKeyVersion":0x19,
"staking":
{
"targetspacing":64,
"targettimespan":960,
"stake reward":150000000,
"limit":0x1B00FFFF,
(NODE_MODULE_DEF) "pos_kernel" : {"file":"modz/stake_pos3.tpo"}
},
"mining":
{
"targetspacing":64,
"targettimespan":960,
"limit":0x1E0FFFFF,
"reward":10000000000000,
"last_pow_block":200,
"paytxfee":10000
},
"genesis":
{
"version" :1,
"time" :1466419085,
"bits" :0x1e0fffff,
"nonce" :579883,
"InitialStakeModifier":0,
"InitialStakeModifier2":0
}
}`
let NODE_BITCORE_NODE SelfNode = `
{
"user_agent" : "purenode",
"paytxfee" : 0,
(NODE_GFX_INT)"version" : 0,
(NODE_BITCORE_BLK_HDR) "lastPOSBlk":null,
(NODE_BITCORE_BLK_HDR) "lastPOWBlk":null,
(NODE_BITCORE_ADDR)"p2p_addr" :
{
"services": 0,
(NODE_NET_IPV)"addr" : "127.0.0.1",
(NODE_GFX_SHORT)"port" : 16819
},
(NODE_BITCORE_WALLET_ADDR_LIST) "addr scan list" : null,
(NODE_BITCORE_MSG_LIST) "send queue" : [],
(NODE_BITCORE_MSG_LIST) "emitted_queue" : [],
(NODE_BITCORE_TX_LIST) "tx mem pool" : null,
(NODE_BITCORE_BLK_HDR_LIST) "submitted blocks" : null
}`
let NODE_MODULE_DEF node_adx = `{"order":2, "file" : "modz/node_adx.tpo"}`
let NODE_MODULE_DEF protocol_adx = `{"order":0, "file" : "modz/protocol_adx.tpo"}`
let NODE_MODULE_DEF iadixcoin = `{"order":3, "file" : "modz/iadixcoin.tpo"}`
let NODE_MODULE_DEF block_adx = `{"order":1, "file" : "modz/block_adx.tpo"}`
let NODE_BITCORE_NODE_LIST peer_nodes = `[]`
let NODE_BITCORE_BLK_HDR genesis_blk = `{}`
let NODE_GFX_INT ping_nonce = `1`
handler on_verack(node,payload) = ` node_adx.queue_ping_message(node) `
handler on_ping(node,payload) = ` node_adx.queue_pong_message(node,payload.nonce) `
handler on_pong(node, payload) = ` set node.synching = 1; `
handler on_version(node,payload) = `
set node.p2p_addr = payload.their_addr;
set node.p2p_addr.services = payload.services;
set node.my_addr = payload.my_addr;
set node.user_agent = payload.user_agent;
set node.version = payload.proto_ver;
set node.block_height = payload.last_blk;
node_adx.node_log_version_infos(node)
node_adx.queue_verack_message(node)
`
handler on_inv(node, payload) = `
node_adx.queue_getdata_message(node, payload.hashes)
`
handler on_addr(node, payload) = `
foreach payload.addrs node_adx.node_log_addr_infos
`
proc init_node = `
protocol_adx.init_protocol (configuration)
block_adx.init_blocks (configuration)
set SelfNode.version = configuration.version;
node_adx.node_init_self (SelfNode)
node_adx.node_load_block_indexes ()
loadmod (configuration.staking.pos_kernel)
configuration.staking.pos_kernel.init_pos (configuration.staking)
block_adx.make_genesis_block (configuration.genesis, genesis_blk)
if (SelfNode.block_height = 1)
node_adx.node_set_last_block (genesis_blk)
configuration.staking.pos_kernel.store_blk_staking (genesis_blk)
endif
if (SelfNode.block_height > 1)
node_adx.node_load_last_blks()
configuration.staking.pos_kernel.load_last_pos_blk(SelfNode.lastPOSBlk) :
set SelfNode.lastPOSBlk = SelfNode.last_blk;
configuration.staking.pos_kernel.find_last_pos_block(SelfNode.lastPOSBlk)
configuration.staking.pos_kernel.store_last_pos_hash(SelfNode.lastPOSBlk)
configuration.staking.pos_kernel.compute_last_pos_diff(SelfNode.lastPOSBlk, SelfNode.current_pos_diff) :
set SelfNode.current_pos_diff = SelfNode.limit;
endor
endor
endif
sethandler SelfNode.emitted_queue{ "cmd=verack" } = on_verack;
sethandler SelfNode.emitted_queue{ "cmd=version" } = on_version;
sethandler SelfNode.emitted_queue{ "cmd=ping" } = on_ping;
sethandler SelfNode.emitted_queue{ "cmd=pong" } = on_pong;
sethandler SelfNode.emitted_queue{ "cmd=inv" } = on_inv;
sethandler SelfNode.emitted_queue{ "cmd=addr" } = on_addr;
node_adx.new_peer_node(configuration.seed_node, peer_nodes)
node_adx.queue_version_message(peer_nodes[0])
node_adx.queue_getaddr_message(peer_nodes[0])
`
For the moment it looks like this =) Then from C code : load_script ("script.cc", &script_vars);
resolve_script_var (&script_vars,PTR_NULL, "init_node" , NODE_SCRIPT_PROC,&init_node_proc);
execute_script_proc (&script_vars, &init_node_proc);
=>  In the next days i'll get into implementing the harder function with the script to check block headers and tx, but all the basics to manipulate event handlers based on network message is already there, and i already have all the code in C. Like this the code for high level definition of node and protocol can be much cleaner =) Next also is making a system to define the module associated with http services with the script with a definition like this let NODE_GFX_OBJECT http_services = `
{
"port":16820,
"cgi" : [{"block explorer":{"index" : "/api/" , (NODE_MODULE_DEF) "block_explorer" : {"file":"modz/block_explorer.tpo"}}}]
"rpc" : [{"walletRPC" :{"index" : "/wallet/", (NODE_MODULE_DEF) "rpc_wallet" : {"file":"modz/rpc_wallet.tpo"}}}],
}`
To have either cgi interface bound to http addresse like http://nodeip:port/api/method?param=value for the block explorer and the http/json/rpc api on http://nodeip:port/wallet/jsonrpcAnd next, to recode the block explorer and wallet modules with this script, to make it easier to read and easier to add new function in the api, without to even have to recompile anything. Those script can probably be easily compiled to assembler, and then to tpo module too, but for the moment it's simple interpreter I will write also more documentation for the API and how the script work in the next week. I guess tomorow or the day after the handler to deal with block validation should be ok. Then i'll see a bit more how to define the http interface binding to modules, and how to recode the modules with the script After this, i guess either the rest of the team is ready for the ICO, i'll probably launch a test coin because it's taking too much time |
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To make game theory with this, need to more present it this way :
Option A : his wife has 20% of dieing, but 70% chance of winning 1 million
Option B : his wife has 60% of dieing, but 80% chance of winning 10 million
Option C : his wife has 3% of dieing, but 95% chance of winning 10 000
And the nash equilibirum say the most likely option is C, because in the end, most people will choose the solution with the lowest risk, rather than high risk for high reward.
Once again, that is not game theory, but is no-brainer theory. Might as well add few more options... Option D: his wife has 1% of dieing, but 99% chance of winning 10 00 Option E: his wife has 0.01% of dieing, but 99.99% chance of winning 100 Everyone will go all-in on option E. It's a no-brainer. Depends. If you don't like your wife, you'd go for option B, no ? The gentlemen code of conduct command that you should not play your wife on trading market or casino |
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The thing with code, after looking at many code, i had the big impression the bottom end of the algorithm is very simple, and it's just huge bloating and lack of good design, it's why i started to make my own client, it can do everything with 30Mo of ram, and with the script that is almost finished, i'm sure you can program full node with 200l of script, in the overall the bottom thing is not so complex, but the way the c++ code is made and the choice that has been made make it look super complex, and i can't see the purpose of doing it that other than maximizing deployment to end user with shortest/cheapest development time. Basically the development is not the priority. Even a thing that i always find weird and i don't see anyone really speaking about, is that originally in node there is supposed to be a system of account, and for someone who is used to also deal with server side software, even mysql is lighter and less complex than running a bitcoin node, they are huge ram sucker, and are the level above in term of ressource use than what you can find in common lamp configuration, or even with tomcat server, and the way it's made with node who have to know the private key and sign the transaction themselves, without system of accounting, it's still weird, and there is a remaining of system of acoutning in all the nodes and rpc interfaces, but it's always disabled, saying it's obsolete etc, and it's where you see it's really oriented toward having single user system like wallets, but in the same time, wallets are not extremely well polished, below the standard you would expect from a true commercial application that you pay for. But i know in the same time it's supposed to break a bit the client/server barrier with the way node are made, and symmetrical node who are in the same time client and server for the protocol, but in the same time it's still not what well though in either manner, no that practical to use on server side who manipulate several different account, neither on client side with application that are still not all that elaborated, and not that well made microsoft style with installer and all. The only thing that can be seen who has really be though of and developed and spent time on is the whole parameters related to the pow / reward / inflation rate/block emission time etc, this yes, it has been though of clearly to have a system that balance itself, and he also integrated other things from hashcash. For me it's not impossible someone with 40 year of wall street of sport bet or from high frequency trading world could come up with a good formula to emulate this kind of high stake poker game scenario to rise to the moon. And the more i think about it, the more i think bitcoin has all quality to be a good thing for trader and big investors, as in the end, all the market value is 100% determined by investors, and they all have the same interest to see the coin rising, and there is not really anything that can truly burst the bubble because there is nothing to index the 'real value' on, all the value is determined 100% by investors, without regulation, or independant expert who can say how much a bitcoin should be worth. And the mining / pow thing is plain game theory thing, maybe it's the system of hashcash and i can see the idea also from purely turning statistics into proof of work, but in the overall, i don't think that was really the main motivation for it, rather than to induce some kind of high stake, highly non deterministic scenario that is known to attract lot of money and resources. But maybe also he didn't plan that much anything and now it's completely out of control and completely not what he had in mind in the beginning  It's hard to say for sure =) |
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From the moment you can reduce a system to a sum of interest like this, it become easy to see how randomness tend to be eliminated from game theory. And system tend to equilibrate on consencus where risk is lower, and irrational behavior cancel each other out.
Irrational behavior is totally canceled out if the risk is as close to nil as possible (or zero, for optimum level) while the reward is as high as possible (or infinite, for optimum level). But life situation is not like that. You will generally see risk:reward that is 50:50, thus you end up having a situation that gives rise to maximum level of irrationality. Because if risk:reward is truly in favor of the participants, then the house/broker/middleman/etc will go out of business asap. It is much like playing roulette on whether black or white will turn up. The reward must match the probability of each turning up, i.e. 50%, minus some house edge so that the house will always make profit over the long term. Or else the house will go broke and there won't be anymore roulette to play. This wouldn't be game theory if you ask me. Game theory comes with randomness. And randomness comes with irrational behavior. Or maybe game theory is in fact really no-brainer theory, but nobody wants to use that term because they would appear to be dabbling in dumb art. Thus they name it "game" theory to sound sophisticated. It aint' no not sopistikated to Dorky.Edit: By the way, making the risk:reward (or probability) 40:60 or 60:40 does not make it more sophisticated or predictable, but merely to reduce the irrational behavior. And the extent of the reduction depends very much on the will and intent of the game master. One man's loss is another man's gain. The rest goes to the game master as tip/commission/fee/etc. It's certainly more useful for computer than to human most human with a brain can do this sort of math naturally, but computer dont have a brain, and they strut a lot with non determinism :p |
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To make game theory with this, need to more present it this way :
Option A : his wife has 20% of dieing, but 70% chance of winning 1 million
Option B : his wife has 60% of dieing, but 80% chance of winning 10 million
Option C : his wife has 3% of dieing, but 95% chance of winning 10 000
And the nash equilibirum say the most likely option is C, because in the end, most people will choose the solution with the lowest risk, rather than high risk for high reward.
Once again, that is not game theory, but is no-brainer theory. Might as well add few more options... Option D: his wife has 1% of dieing, but 99% chance of winning 10 00 Option E: his wife has 0.01% of dieing, but 99.99% chance of winning 100 Everyone will go all-in on option E. It's a no-brainer. From the moment you can reduce a system to a sum of interest like this, it become easy to see how randomness tend to be eliminated from game theory. And system tend to equilibrate on consencus where risk is lower, and irrational behavior cancel each other out. I take clear cut example to show this, the figure are taken on purpose to show easily how it works, but you could twist the figure to get to odds that are less obvious to resolve. To see which option is best is you can play max 5 times, with figure of proba that are less obvious to determine which is the more rewarding strategy at the end with the lowest risk. |
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With game theory it's not mainly about rationality, but how likely someone who want to get some reward from the game would act given this or that informations.
It works mostly for economic scenario, when there are interest engaged , and the only given is that the person want to make profits or "win the game" when all other actors are also willing to do the same.
It's a model to tell how likely a person is going to make this or that decision given this or that infos, and how the reward balance out the risk to decide on a strategy.
The higher the stake, the better it works, because it's very un likely someone would engage big stake without at least thinking twice to the potential benefits/loss.
Game theory are all about reaction to risk and unknown, it's not that much about rationality, but how a person can percieve his own interest, and the higher the stake, the better game theory will apply.
You can't exclude rationality from game theory analysis. A person is expected to be perfectly rational in game theory but that's never the case in real life. A lot of information can be given (and available) to a person but it is not necessary that he will always choose the most objective one. In most cases he will choose the one that is most gratifying to his sensual satisfaction and desire, never mind if his decision will screw him up hard later. Additionally, a person make decision not on the potential risk/reward because that would involve too much thinking for him, but on the most immediate risk/reward that he can receive within a short period of time, never mind if a delayed risk/reward will be much better unless he is 100% assured of it. In terms of getting 100% assurance, nobody in real life really has it. Everyone will have to make a decision based on lack of information. Game theory is just too simplistic, and it works only in simplistic situations. We can make as many fanciful equations to be associated with it but its just to make it appear fanciful as if it is relevant, because if equations are really relevant then we are just not including enough factors into the equations, and the factors involved are far more than we may realize we know. Thus if we are not including enough factors into the equation to make the right analysis, can we claim that game theory analysis is valid? It's like trying to compute what is e using the formula of mc instead of mc^2. Let's say you're in a "massive stake" situation. You are given 2 options to choose from: Option A: Be given $1 trillion dollar worth of assets of your own choosing (in cash, or in gold, or in bitcoin, or in stocks, or in bonds, or in real estate, or a mixture of any of them) right away. Option B: Your wife is killed right away. Dilemma: If you choose one of them, the other one will be lost, i.e. if you choose Option B, you will lose Option A, and vice versa. Which option will you choose? Game theory does not factor in how materialistic you are, does not factor in how affectionate you are to your wife, does not factor in how merciful you are, does not factor in your current economic situation, etc etc etc. But if game theory was to factor in all these factors of influence, the game theory would be much more complicated than it now is. Most probably even you would not be interested to dabble in it by then. Edit: Sorry for any confusion. The options are supposed to say if you choose option A (i.e. be filthy rich), you will lose your wife. And if you choose option B (i.e. spare your wife), you will lose $1 trillion worth of wealth. To make game theory with this, need to more present it this way : Option A : his wife has 20% of dieing, but 70% chance of winning 1 million Option B : his wife has 60% of dieing, but 80% chance of winning 10 million Option C : his wife has 3% of dieing, but 95% chance of winning 10 000 And the nash equilibirum say the most likely option is C, because in the end, most people will choose the solution with the lowest risk, rather than high risk for high reward. It's like this consensus is reached on the parameters that can increase risk for the two party, even if other choice can potentially lead to more reward with more risk. Miner are exposed constantly to this dilema And the more the rule give at least some reward with low risk, the more it is likely to be followed by the two party, because it lower the overall risk, and it's where equilibrium is reached. But in football, it's not the arbiter who is the highly paid, because their role is still deterministic, and if all the match would be decided between artbiters it would not attract high stake. It's in these conditions when there are part that are known, and part that are only statistically known, that game theory can give idea of how certain probabilistic factors will impact the likelyness of a decision or another. And it will always adjust on the known, because on the overall player who take in account the more information wins, and as game theory is still about winners, it's all about how likely a person is supposed to decide to win, and it says that it's always with the lowest risk approach that you win on the long term, and so sticking to known even if the potential reward is not the highest. |
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And all together your comment also show that you dont see my perpective, and why the thing you point doesnt matter, and what I meant with checkpoint is that you would only need real pow consencus on this checkpoint to "harden" The chain if you want to enforce a particular order on the tx/block, but that would just be about one packet saying this block height is this block hash, and having a pow once in a while on this checkpoint instead of every block.
I invented that already in collaboration with @jl777 for Komodo in 2016. It is named dPoW (delayed proof-of-work). CounterParty does something somewhat analogous as well. And really it isn't a secure and sound solution, but more of a gimick. Because the local consensus still have to decide what to submit for checkpoints because the PoW system isn't validating every thing and can't resolve conflicting double-spending orderings that occurred between checkpoints. I don't think you understand my discussion with dinofelis. My main point is more to show that the whole pow scheme make more sense if you take it from the perspective of trading / speculation side, than as a decentralized currency / public ledger. But in the same time, there are many point of bitcoin that are clumpsy. Even if dinofelis i think make the same mistake many person do, and i was doing this mistake before too, is too estimate one functionality of bitcoin to make it fit to usual engineering criteria of efficiency for a particular purpose, but without seeing the real purpose of it, and why some aspect my look clumpsy because they are on the low end of the trade off in favor of something else. And the thing it seem to does well is attracting high speculative value, and high stake of game theory on the pow side. As decentralized currency it has many flaw, especially currently, and is not either extremely efficient as a distributed public ledger. Only looking at the code it's clear it's very messy. Actually before i came to forum i already studied in depth code source from 3 core, bitcoin, bitmonero and blackcoin, from where i decided to rewrite my own client from scratch because the code is too messy. Coming here i though there would be people who really understand the code and the theory and choice behind, but in reality i don't think anyone on this board as a real clue. Only the fact that nobody can really understand it, or easily extend on it, not even talking about the protocol, but about all the various bugs and clumpsyness, either it's in the wallet, database indexing/managment, threading, and many bugs, or things that could be improved as long as all the mythical wish of the creator with a gran plan for the world is put aside On the overall i don' think anyone will disagree that the code is poorly designed, regarding all the OO, all the way the thing is made, it's very monolithic, against all good practice you would find in programming school book, and very hard to extend or encapsulate, and the rpc interface can only do that much, and is not that easy to really use from the perspective of making more complex web app/Dapp. But in the same time, once you integrate all the game theory and math model for speculation and all this, it's easier to see where the code make more sense, and which base variable are actually more carefully designed in their definition and access, and where the care is put on, and it's not especially on the efficiency as a distributed ledger to solve double spend, or having easily distributed application wallet/shops/explorer "out of the box". That's mainly my point here. But maybe if i keep focused on this goal, i'm sure i can put up a testnet with experimental blockchain like without pow and reward, based on XThin block / bloom filter kind of things, and blockchain reordering , like in the idea the DAG thing, but without DAG, but real time re computation of block header chain when new valid tx are received, and still consensus on the same one chain, without needing pow or reward to validate blocks, with the idea i explained in the discussion with dinofelis And in this idea, the checkpoint is mostly optional, but just to sort out the few % of error margin and to solve quicker some consencus problem on the long term. I'm pretty sure with the script engine stuff like this will be made easily ( and please don't cherry pick one sentence out of context and copy paste it in 3 threads to show how smart you are, it's not very nice  ) |
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To me, game theory is simplistic.
It may be alien-tech advanced AI analytics to some, but not to me.
Game theory is fanciful and sounds sophisticated to some, but not to me.
Sorry.
It's simplistic but it works well to model situation with reward and risk estimation and how likely a person is going to choose to win. But im not super fan of it either, but still the pow scheme of bitcoin is plain game theory. Reward vs risk estimation. Risk = mining difficulty. And it's not so easy to exclude for me that there could be a mathematical model behind it, intentional or not. |
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For example, let's take world cup final of football, there is high stake , and good players on both sides. You think players are going to just be following their emotion in their corner, of course not, they have strategy, plans, information on the other, because it's like this you win. It's same with poker and with trading. From the moment there are interest engaged, it make in sort understanding of the game rule and making strategy to gain advantage out of the game will increase the likelylness of winning. And people who play emotionally or without plan will loose their stake to better player, and in any case are not really a huge variable factor to consider in the final outcome. The highly volatile proba are on world cup final with good player who have experience and strategy, it's where the probabilities are very sharp , and the stake high , because the risk is higher and the outcome is less predictible. The thing with huge pow & high speculative value drive to this sort of model of un stability on this surface match, but the behavior induced by the stake to follow the rule will prevail, and in any case you know there is money to be made in any case through the constant that emerge like people will still buy seat to see the match, and it's how smart game theory works http://www.thehardtackle.com/2012/penalty-in-football-follows-nash-equilibrium/ A penalty in football is the epitome of unpredictability – one which affects both teams on the field. After being introduced by William McCrum in 1891, penalty kicks have been analyzed and dissected by almost anyone who has played or watched football. The sense of unpredictability also attracts bookies, and it is common to place a bet on any penalty kick almost anywhere, legal or otherwise.
Penalties have often decided World Cups, European Cups and even heated derby matches. From Roberto Baggio in 1994 to John Terry in 2008, penalties have gotten the better of the bravest minds. Should he shoot left, or right? Or should he shoot straight? On the face of it, it appears as a totally unpredictable course of action. However, as we will see, even such an unpredictable action follows the laws of Equilibrium, more specifically the Nash Equilibrium.
Penalties in football can be thought of as a zero-sum game. That means, for one to win, the other has to lose. If we think of this in terms of the Probability Theory, assigning arbitrary values like 1 for victory and -1 for defeat, we can easily see how this is a zero-sum game. Penalty taking, in essence follows a Mixed Strategy Nash Equilibrium. That means, even if a player knows in which direction the keeper will jump, he will not change the direction of his shot. Whether that action leads to a goal or a save is irrelevant to this article as here we are trying to understand the dynamics of the underlying equilibrium. |
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"Likely" is a form of probability.
Unless it is deterministic, in which it won't be called "game theory".
Bitcoin is not deterministic |
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You see , you use proba term "very often" and you make game theory based on how likely, or how often a person would do this or that And neurology can very well show how "irrational choice" also have their functiun with physiology and all, even if they are "unconscious", aka we are not conscious of them, but it doesnt mean their reaction to certain situation is completely random and unpredictible. Animal dont have reason, their behavior is only more predictible. Skynet always trick human with their émotions, they are much easier to predict than reasoned strategy But game theory works when there is clear manner for players to see how likely this decision will be rewarding vs another, taking in account the likelylness of the outcome. |
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From my deep study of the range of plausible designs for a blockchain consensus system (and I studied much deeper than in than what is contained in that linked thread), I conclude that it is impossible to have a fungible token on a blockchain in which the consensus doesn't become centralized iff the presumption is that the users of the system gain the most value from the system due to its monetary function. However, I was able to outsmart the global elite, because I realized that if the users of the system gained more value from the system for its non-monetary function and iff that value can't be financed (i.e. its value can be leeched off by control of fungible money), and if I provided a way for the users to provide the Byzantine fault DETECTION as a check-and-balance against the power of the whales and if I provided this in a way that is not democracy and is a crab bucket mentality Nash equilibrium, then I would have defeated the problems with the concept of fungible money. The elite simply weren't aware of these concepts, because I invented them. Nash didn't know this. And that is what I intend to launch with BitNet. Quoting, because this post is too valuable More on that... You could just remove the reward, any one can mine new block out of the mem pool, if two blocks or tx are in common, a determinstic algorithm could be used to select between the two.
I agree with you. The error in most crypto is the reward, which gives rise to strategies that do not necessarily induce the desired properties. I also think that the only viable kind of crypto currency is where the validation/consensus decision is taken on a voluntary basis, the "reward" being that the system in which you are invested, keeps running correctly. However, you still need a kind of deterministic decision *that is hard to game* (because you can do "proof of work" like calculations to get the deterministic solution in your advantage). This is why a kind of PoS signature scheme is necessary in my opinion. @dinofelis, how many times do I have to repeat to you that voting is not free. Ethereum's Casper shit is more of the same proof-of-stake (nothing-at-stake or centralization by economic weight, e.g. DPoS) nonsense. The betting stuff enables what Vitalik refers to as "dark uncles" or "dunkles", which Vitalik incorrectly thinks will solve the nothing-at-stake problem. Also Casper has the problem that all deterministic finality PoS and Byzatine agreement systems have, which is a 33% liveness threshold which if that many validators balk or stop processing, then the chain can't move forward without a hard fork. The only way to replace PoW is with an Inverse Commons consensus protocol, which is my new invention.
And all together your comment also show that you dont see my perpective, and why the thing you point doesnt matter, and what I meant with checkpoint is that you would only need real pow consencus on this checkpoint to "harden" The chain if you want to enforce a particular order on the tx/block, but that would just be about one packet saying this block height is this block hash, and having a pow once in a while on this checkpoint instead of every block.
I invented that already in collaboration with @jl777 for Komodo in 2016. It is named dPoW (delayed proof-of-work). CounterParty does something somewhat analogous as well. And really it isn't a secure and sound solution, but more of a gimick. Because the local consensus still have to decide what to submit for checkpoints because the PoW system isn't validating every thing and can't resolve conflicting double-spending orderings that occurred between checkpoints. Yes they still have to check validity in between, the checkpoint is just to rule out the 0.01% proba that could happen with collision or when nodes could think they are on the same chain but are not because of a weird low probability thing, it's just to push this probability few zero down. But the core of the idea is not dPoW or only this, this is just additional measure to push probability of erroneous consensus few zero down I still think you miss the gist of the idea lol |
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With game theory it's not mainly about rationality, but how likely someone who want to get some reward from the game would act given this or that informations.
It works mostly for economic scenario, when there are interest engaged , and the only given is that the person want to make profits or "win the game" when all other actors are also willing to do the same.
It's a model to tell how likely a person is going to make this or that decision given this or that infos, and how the reward balance out the risk to decide on a strategy.
The higher the stake, the better it works, because it's very un likely someone would engage big stake without at least thinking twice to the potential benefits/loss.
Game theory are all about reaction to risk and unknown, it's not that much about rationality, but how a person can percieve his own interest, and the higher the stake, the better game theory will apply.
You can't exclude rationality from game theory analysis. A person is expected to be perfectly rational in game theory but that's never the case in real life. A lot of information can be given (and available) to a person but it is not necessary that he will always choose the most objective one. In most cases he will choose the one that is most gratifying to his sensual satisfaction and desire, never mind if his decision will screw him up hard later. Additionally, a person make decision not on the potential risk/reward because that would involve too much thinking for him, but on the most immediate risk/reward that he can receive within a short period of time, never mind if a delayed risk/reward will be much better unless he is 100% assured of it. In terms of getting 100% assurance, nobody in real life really has it. Everyone will have to make a decision based on lack of information. Game theory is just too simplistic, and it works only in simplistic situations. We can make as many fanciful equations to be associated with it but its just to make it appear fanciful as if it is relevant, because if equations are really relevant then we are just not including enough factors into the equations, and the factors involved are far more than we may realize we know. Thus if we are not including enough factors into the equation to make the right analysis, can we claim that game theory analysis is valid? It's like trying to compute what is e using the formula of mc instead of mc^2. Let's say you're in a "massive stake" situation. You are given 2 options to choose from: Option A: Be given $1 trillion dollar worth of assets of your own choosing (in cash, or in gold, or in bitcoin, or in stocks, or in bonds, or in real estate, or a mixture of any of them) right away. Option B: Your wife is killed right away. Dilemma: If you choose one of them, the other one will be lost, i.e. if you choose Option B, you will lose Option A, and vice versa. Which option will you choose? Game theory does not factor in how materialistic you are, does not factor in how affectionate you are to your wife, does not factor in how merciful you are, does not factor in your current economic situation, etc etc etc. But if game theory was to factor in all these factors of influence, the game theory would be much more complicated than it now is. Most probably even you would not be interested to dabble in inxt by then. Edit: Sorry for any confusion. The options are supposed to say if you choose option A (i.e. be filthy rich), you will lose your wife. And if you choose option B (i.e. spare your wife), you will lose $1 trillion worth of wealth. Im not sure what definition of rational you use But people following emotion of what ever is included in game theory The case where game theory are move obvious is when there is high reward for low risk, let say you press A you gain 1m, you press B you get a kick in the but, how likely people will press A When potential gain and reward are easy to see it works well. And it's made to deal mostly with economic interest, where is no quantifiable interest and risk it's useless, but btc is full of quantifiable interest and risk Proba are used everyday in many area like insurance and there is lot $$ with it. Same for casino. And it's not based on assumption of belief or "rationality". But playing rationnelly with good info is more likely to win. |
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do you ever get tired of listening to yourself talk, i wonder?
dinofelis = iamnotback = trainscarwreck
That's because of Satoshi's evil genius, that rendered me/us totally schizophrenic. Just like Nash, BTW Nobody will say im someone else because of my infalsifiable grammar Did you ever wondered if you could be everyone else you talk to on the internet like fight club  |
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This is why Casper tries to punish those that do not follow the rule ; but then this can be gamed too and you get a hopelessly complicated game-theoretical bungle.
How can the punishment mechanism be gamed? Can you describe an attack scenario against it? If there's nothing at stake (in both senses) with staking, your only stake is that the system works well. If the random deterministic choice of who can stake, is random enough, then it is also essentially impossible to BRIBE you into staking, because in order to find out WHOM to bribe, you'd need to spend a lot of "proof of work" and chances are you'll find one necessary staker who doesn't accept the bribe.
I'm not sure if I understand your reasoning. Anyone could be bribed to do whatever action (i.e. only build upon certain blocks, censor some kind of transactions/blocks etc.) and without block rewards the bribees would lose nothing (except maybe suffering from a loss of value of their stake due to the attack as such) As long as all tx in the blocks are the same it doesnt matter, if tx are plain invalid, it doesnt need the whole pow consencus for a node to detect it, same for spam, nodes just need to know they are on the same chain of valid tx, and only rules out the double spent, and they can already know if a tx is valid or not given a certain chain without requiring POW consensus. |
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The only way I can see that the fees won't rise egregiously on BTC on chain (with $trillionaire/$billionaire whales free riding on the rest of us) is if something can compete with Bitcoin such that the whales feel they are losing control of the blockchain (and eventually global) economy, and/or if fungible money can be removed as important from civilization.
You want people to point out your error. However, I think whales will end up demanding a kickback from miners for their transaction fees, so that miners can jack up fees on non-whales. Whales can make this demand because they can refuse to send their transactions to miners which won't deal. Yet non-whales can't make a credible threat, because miners who generally offered lower fees would end up losing hashrate relative to those miners who didn't defect from the fee market. Thus I think you will probably see miners colluding to extract the maximum fees that gouge non-whales.
If the whole thesis of a fee that gets too high for average joe to use bitcoin is based on whales colluding, then here are my arguments. 1. That scenario of whales ($billionaires, elites, etc) colluding will NEVER happen. 2. Humans (whales, $billionaires, $millionaires, elites, etc) are never rational. Forget about game theory. It works only on simplistic binary situation. Humans are scientifically documented to be far more irrational than rational in decision-making. 3. The whales ($billionaires, power brokers, shadow elites, etc) would be owning over 50% of all bitcoin ever mined. If miners give way to their "colludion" (pardon my English it's not my fault that English is a stupid language) by making the non-whales pay up, that is economical nonsense. 1st, the miners are the gatekeepers. If the whales refuse to pay the fees, they can get the hell out from using bitcoin. 2nd, if all non-whales are pushed into alts, leaving only the whales, then the whales will pay the fee. "Colludion" makes no difference. The pareto effect of 80:20. -> 20% whales own 80% of bitcoin. (whales pay 80% of total fee) (non-whales pay 20% of total fee) -> The whales collude not to pay fee and push out non-whales. -> If miners comply, they will force the 20% non-whales to make up for the 80% difference. This is economically impractical. The miners are not advantaged by complying. -> If miners don't comply, they will still earn the fee as usual. The whales have no choice but to continue using bitcoin and pay their share of the fee. The miners are not disadvantaged by not complying. Your reasoning/logic based on game theory is flawed/incomplete. Note: Businesses make their profit from servicing the rich (those who can afford the price), not from the poor (those who cannot afford the price). This is valid throughout all economic activities. A dialogue... Whale: I am not going to send you transaction if you charge me fee. Miner A: Where will you send your transaction? Whale: To miner B. Miner B: So you want me to NOT charge you any fee? Whale: Yes. Miner B: And if I refuse? Whale: I will take my business to miner C. Miner C: What now? Whale: Okay, I pay my fee to you. Miner A & Miner B: Get lost! Whale: Well, at least I still pay. Miner A & Miner B: Bluffer! The next whale (whale #2) shows up... Whale 2: Hi! I am here to make a deal. Miner A: Fuck off and die if it's about free transaction. Whale 2: Urmmmm...... no. I pay. Miner A: Good. With game theory it's not mainly about rationality, but how likely someone who want to get some reward from the game would act given this or that informations. It works mostly for economic scenario, when there are interest engaged , and the only given is that the person want to make profits or "win the game" when all other actors are also willing to do the same. It's a model to tell how likely a person is going to make this or that decision given this or that infos, and how the reward balance out the risk to decide on a strategy. The higher the stake, the better it works, because it's very un likely someone would engage big stake without at least thinking twice to the potential benefits/loss. Game theory are all about reaction to risk and unknown, it's not that much about rationality, but how a person can percieve his own interest, and the higher the stake, the better game theory will apply. In this dialog btw you show very well the two interwinded games for whales & miners To put in math term it would end with two equations one that define the speculative value of the coin, what make the coin attractive to trader according to any strategy they choose, and what influence trader choice and what make the coin looking profitable for a trader/investor and the other related to mining profitability, and what risk a miner is willing to engage for the reward One third interest is user who wants to rely on the system to make a tx but he has zero power. and putting then those two equation in relation you would see they share a certain number of variable with their own matrixes of probability that would push some of the lowest probability variable ( less likely behavior) to some constant in favor of the more important criteria on the variables they share, to maximizes the likelylness of the following of the protocol for mutual interest of the big speculative forces engaged. Well just quick shot to lay put the idea on the big lines lol And im pretty sure it's not even that hard core to model with game theories. But it also incorporate other constant like inflation rate and maybe other factors that are not purely speculative value and mining reward/risk. |
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Bitcoin is where it is today not because it was relentlessly being promoted globally by a group of independent people with shared passion in bitcoin.
Humans in general has a sort of burn rate in whatever they do, i.e. they do not have the strong determination to carry out their plan locally, much less globally as we see from the forces behind bitcoin.
Humans in general have no interest nor passion in promoting the works of other people, i.e. they rather steal other people's idea, modify it into a different version, and claim their own brand.
Humans in general are weary of unsubstantiated promises by other people, i.e. no matter how good is an invention or innovation, most are unwilling to have full faith put into it especially when its future is still vague.
In bitcoin, we see the total opposite of the behaviors above, i.e. we see people relentlessly promoting bitcoin/blockchain globally, we see people giving praises to a guy name satoshi, we see people developing miners, investing millions, running exchanges to facilitate this invention called bitcoin.
Does it ever pop up in your mind, that all these are so unlike normal human behavior and have a feeling of strong suspicion to it?
How come it never come to your mind that the forces behind bitcoin may very well be the rothschilds and their agents?
Come to think of this, bitcoin is not the only great invention in our lifetime that has the power to totally disrupt the status quo.
Inventions like "free energy" existed too and have full power to disrupt the status quo but they all die out eventually because nobody (that is 3rd-party) promotes it and the media never talk about it in good light.
Bitcoin, on the other hand, has businesses opening up to develop miners to mine it, has exchanges opening up to facilitate its price-making, has education institutions giving grants to study it, has companies injecting millions into mining farms, has huge corporations adopting it as a form of payment, has governments recognizing it as legal currency, has politicians promoting it, etc etc, and yet all these never cross your mind that there could be something unknown behind it?
Yeah, bitcoin is great. And it's probably the one and only invention that you know of that can disrupt the status quo because every other equally great and disruptive inventions are not as widely promoted.
The kind of promoting I see behind bitcoin is very well organized, relentless, and organized, completely unlike the kind of force that you would see from a group people operating independently on his own.
And every day I keep seeing people talking about satoshi being a genius and bitcoin being a wonderful invention, I can't stop but think to myself, "Are these people really that stupid? Are these people just think based on what they are shown and told? Aren't they intelligent enough to question that there is something different with the force behind bitcoin? Can't they actually think outside of the box, independently?"
It's like humans have a very naive sense of how wonderful is the world, how bright and hopeful is the future, how promising will the future be with bitcoin, that everyone is good and honest, that there is no bad evil guys on earth, that everyone is good hearted and is out there to help and save.
And I would go like, "What???". It's like the current generations of humans on earth were descended from heaven where everyone is good and never bad/evil.
And if they were told there could be dishonest force behind every get-rich-quick scheme, that there could be sinister force behind bitcoin, etc, they will say I am crazy.
Simply wow.
But then if they were shown another great and disruptive invention that could save the world, these same people wouldn't lay an eye on the invention even for 10 seconds, much less spread good words around it.
And so I am led to believe people admire bitcoin is not because it is a great disruptive invention, but because everyone else is doing it so they are just following along with the herds.
And all the talks about how genius is satoshi and how disruptive and breakthrough is bitcoin, are all mere excuses.
Bitcoin, if it was really an independent invention, would die out within the first year of its existence.
Who is the persistent force behind bitcoin that elevate bitcoin from being a worthless piece of digital token to where it is today?
I can bet if I were to develop a much more powerful version of bitcoin and release it into the wild and just let the world work it out for me, it would die within a year.
But why is bitcoin different?
I am going to expect lots of dumb answers.
In the same time this state of things is not new and it's not impossible to think someone could see one step ahead of this and integrate this behavior in game theory model bound to something else. |
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You could just remove the reward, any one can mine new block out of the mem pool, if two blocks or tx are in common, a determinstic algorithm could be used to select between the two.
I agree with you. The error in most crypto is the reward, which gives rise to strategies that do not necessarily induce the desired properties. I also think that the only viable kind of crypto currency is where the validation/consensus decision is taken on a voluntary basis, the "reward" being that the system in which you are invested, keeps running correctly. However, you still need a kind of deterministic decision *that is hard to game* (because you can do "proof of work" like calculations to get the deterministic solution in your advantage). This is why a kind of PoS signature scheme is necessary in my opinion. @dinofelis, how many times do I have to repeat to you that voting is not free. This is not about voting. PoS is not about voting, it is about acknowledging your set of received transactions, according to an agreed-upon (protocol) deterministic rule. The problem with PoS, namely "nothing at stake" only comes because of the reward. If there is no reward in PoS, there's no incentive to stake on multiple chains: you don't care. You stick to a rule, an arbitrary but deterministic rule, to stake on one chain, and not on another, because by not staking on the other chain, you don't lose a reward. As such, there is a normal solution to the "nothing at stake" problem: you apply the rules, because if you're not part of the cheaters that gain something by re-organizing the chain, you can only WIN by wanting the system to come to a consensus, no matter which one ; there's total indifference to what consensus and to whether you stake or not, if there's no reward. Your only stake is that there's a consensus that is reached, or the system in which you are a stake holder, crashes down. In PoS, it is not difficult to define a rule that you only stake on one of the possible chains (deterministic rule). If you follow that rule, no "nothing at stake" problem occurs ; the only thing is that there's no incentive for you to follow that rule if there's a block reward ! This is why Casper tries to punish those that do not follow the rule ; but then this can be gamed too and you get a hopelessly complicated game-theoretical bungle. If there's nothing at stake (in both senses) with staking, your only stake is that the system works well. If the random deterministic choice of who can stake, is random enough, then it is also essentially impossible to BRIBE you into staking, because in order to find out WHOM to bribe, you'd need to spend a lot of "proof of work" and chances are you'll find one necessary staker who doesn't accept the bribe. Of course, with sufficiently corrupt players, you can game the system ; and that's OK. The system shouldn't be too secure, and the real risk that the system will one day break down, protects it from too much hot air speculation. Only its real usage as a currency would determine most of the market cap, as it should, and no-one would dream to use it for a very long term hodling idiocy. Exactly my thinking Maybe you see now why I think the pow is not only about byzantine consensus on double spent and there is something else in the equation that is more important than mere consensus on the double spent hence thinking there is still a kind of more or less secret plan on game theories and speculation aimed at trader and miners to make in sort the coin can reach and sustain high market cap and high mining difficulty, basically based on almost nithing, in relatively short time, and still nobody can really decide anything  |
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