So what's the deal with smart contracts?

[Come-from-Beyond]

That paper does not demonstrate any party is necessarily operating out of a Nash equilibrium. Selfish mining is detectable, so mining pools, being visible and identifiable entities, face reputational costs for engaging in it. That very plausibly makes it unprofitable. Also, some forms rely on network conditions that may not exist.

If there were some sort of undetectable or unattributable selfish mining known to be compatible with the current network conditions, and we could tell that weren't happening then you could correctly make the argument you did, but that is a contradiction.

I guess one time we might see a valid experiment would if a big pool does an exit scam. Under the reputational-cost theory, such a pool should selfish mine right before the exit, though it still might not be worth the trouble to actually implement for relatively modest gains.

We had Deepbit which got 51% of hashing power and noone detected an abuse attempt. We had GHash.io which got 51% of hashing power and an abuse attempt was detected.

What did keep Deepbit operator honest (they are Russians BTW, half of BTT thinks Russian = con-artist)?
How much reputation did that doublespending against a casino cost to GHash.io operator?

[smooth]

That paper does not demonstrate any party is necessarily operating out of a Nash equilibrium. Selfish mining is detectable, so mining pools, being visible and identifiable entities, face reputational costs for engaging in it. That very plausibly makes it unprofitable. Also, some forms rely on network conditions that may not exist.

If there were some sort of undetectable or unattributable selfish mining known to be compatible with the current network conditions, and we could tell that weren't happening then you could correctly make the argument you did, but that is a contradiction.

I guess one time we might see a valid experiment would if a big pool does an exit scam. Under the reputational-cost theory, such a pool should selfish mine right before the exit, though it still might not be worth the trouble to actually implement for relatively modest gains.

We had Deepbit which got 51% of hashing power and noone detected an abuse attempt. We had GHash.io which got 51% of hashing power and an abuse attempt was detected.

What did keep Deepbit operator honest (they are Russians BTW, half of BTT thinks Russian = con-artist)?
How much reputation did that doublespending against a casino cost to GHash.io operator?

r0ach = Half of BTT? Well maybe there are lot of sock puppets on here, lol. 

Anyway, I don't think you can easily answer "how much reputation" cost, but you can't say that failure to take short term advantage is not a Nash equilibrium when reputational costs exist, because that is an alternate consistent explanation.

[Come-from-Beyond]

r0ach = Half of BTT? Well maybe there are lot of sock puppets on here, lol.  

Anyway, I don't think you can easily answer "how much reputation" cost, but you can't say that failure to take short term advantage is not a Nash equilibrium when reputational costs exist, because that is an alternate consistent explanation.

Miners can be anonymous, they can collude, frankly saying, this "reputation" topic doesn't look as a solid counterargument against the claim that Bitcoin operates out of an equilibrium.

[smooth]

r0ach = Half of BTT? Well maybe there are lot of sock puppets on here, lol. 

Anyway, I don't think you can easily answer "how much reputation" cost, but you can't say that failure to take short term advantage is not a Nash equilibrium when reputational costs exist, because that is an alternate consistent explanation.

Miners can be anonymous, they can collude, frankly saying, this "reputation" topic doesn't look as a solid counterargument against the claim that Bitcoin operates out of an equilibrium.

Miners can not operate anonymously nor do anything useful with selfish mining or double spends as long as they are mining on pools, which the huge majority of the hash rate is currently doing. Only the pools themselves could do that, and they aren't anonymous.

If a large anonymous solo miners existed and had the opportunity to engage in selfish mining but didn't, your theory would be validated, but how could this ever be tested? I think it is impossible.

You could argue that a bunch of large miners would be better off on private pools or something, and by choosing to use public pools they are not in a Nash equilibrium, but the whole argument becomes complex, since pools benefit when other miners join them, so there is an incentive to be public, large visible actors such as Bitmain might be better off using a visible public pool since it isolates them from false accusations of misconduct, etc.

Also, the theory of selfish mining has some repeated game problems, since it assumes everyone else doesn't selfish mine. If others selfish mine, the defense is to selfish mine yourself, and if multiple large miners of equal size all selfish mine, then it is obvious none retains any advantage. If there are several large miners (or pools), they may be better off not bothering to start the conflict, especially given even small potential for reputational consequences.

[sockpuppet1]

Miners can not operate anonymously nor do anything useful with selfish mining or double spends as long as they are mining on pools, which the huge majority of the hash rate is currently doing.

Incorrect. Just by being on a large pool, they inherently are mining on the correct block more often than the minority of the hashrate, which instead have to wait for propagation delay.

Also a mining farm mining (or oligarchy of them) with 33% of the hashrate even if mining on a pool, can still do the selfish mining attack without informing the pool. Remember Bitcoin never implemented Meni Rosenfeld's oblivious mining shares fix to prevent share withholding attacks. This is assuming the pool supports getblocktemplate so the miner can set his own transaction block hash (however I guess most pools would do something to prevent a miner from pool hopping so I am not 100% sure about this).

Also miners could own the pool and pretend not to. They could obscure their selfish mining by hopping around to different pools they own. You can bet mining farms have looked into all these techniques. The Chinese are very clever.

[Come-from-Beyond]

Miners can not operate anonymously

Why? https://socrates1024.s3.amazonaws.com/consensus.pdf: "Abstract—We present a formal model of synchronous processes without distinct identifiers (i.e., anonymous processes) that communicate using one-way public broadcasts."

[smooth]

Miners can not operate anonymously

Why? https://socrates1024.s3.amazonaws.com/consensus.pdf: "Abstract—We present a formal model of synchronous processes without distinct identifiers (i.e., anonymous processes) that communicate using one-way public broadcasts."

I haven't read that paper but from the abstract it isn't obvious how this would relate to miners on a pool which is almost all Bitcoin mining right now.

[smooth]

Miners can not operate anonymously nor do anything useful with selfish mining or double spends as long as they are mining on pools, which the huge majority of the hash rate is currently doing.

Incorrect. Just by being on a large pool, they inherently are mining on the correct block more often than the minority of the hashrate, which instead have to wait for propagation delay.

That's not evidence of Bitcoin operating outside a Nash equilibrium, which was CfB's argument. Most of the hash rate 80%+ obviously mines on very large pools. The rest may do something else, and it might even be a bad decision on their part, but that little 20% doesn't really affect how Bitcoin operates.

Also a mining farm mining (or oligarchy of them) with 33% of the hashrate even if mining on a pool, can still do the selfish mining attack without informing the pool. Remember Bitcoin never implemented Meni Rosenfeld's oblivious mining shares fix to prevent share withholding attacks. This is assuming the pool supports getblocktemplate so the miner can set his own transaction block hash.

I don't know which pools support getblocktemplate, but there's no evidence of anyone using it (most if not all ASIC gear just connects directly to the pool and uses stratum). Seems like that concept mostly died when Luke-Jr lost the original argument with slush.

[sockpuppet1]

smooth I tend to agree they don't need to. They are already amassing massive profits and they just need to make sure they can control the block size to maximize their transaction fees.

I don't think they'd rock the boat with selfish mining, unless they were 100% sure they could do it undetected.

[Come-from-Beyond]

I haven't read that paper but from the abstract it isn't obvious how this would relate to miners on a pool which is almost all Bitcoin mining right now.

Well, if both our arguments are not obvious then let's wait while one of us writes a whitepaper. For now, the fact that people keep talking about 51% attack while the threshold can't be above 33%, shows how little they care about anything except speculation on BTC price.