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Hi, Author of the referenced blog post [2] here (and one of Felten's grad students). Let me lay out the argument from our post in a more technical way: the big

Hi, Author of the referenced blog post [2] here (and one of Felten's grad students). Let me lay out the argument from our post in a more technical way: the biggest problem with the Eyal/Sirer paper is that they don't think about the problem as an equilibrium problem, but rather argue about what's best from the perspective of a particular player. This leads them to propose a strategy which is not even optimal for any player (we prefer to think of Bitcoin as a kind of consensus game, in the game theoretic sense. See our earlier paper on the topic [1]). They argue that Bitcoin is not incentive-compatible by virtue of the strategy they demonstrate. I think this question needs to be the crux of any Bitcoin research paper. I'll define "incentive compatible" to mean one of two things (1) (weakly incentive compatible) If people follow their incentives, rather than the rules of Bitcoin as written down and understood by the community, then there exists an equilibrium in which all players follow the rules. (2) (strongly incentive compatible) The above equilibrium is the only equilibrium in Bitcoin. The question of whether the current Bitcoin ruleset is incentive compatible strikes me as the most important Bitcoin research question: it answers whether Bitcoin, as a system, will continue to be stable over the long term. A secondary question is to ask "what rule sets could exist which would be incentive compatible?" Obviously, if the answer to the first question is "no" then the second question is more important. [1] https://news.ycombinator.com/item?id=5874786 https://news.ycombinator.com/item?id=5874786 [2] https://news.ycombinator.com/item?id=6689254 https://news.ycombinator.com/item?id=6689254

cs702 13y ago
Gavin's post is not innuendo; he's just trying to be diplomatic in my view. However, I could not agree more with deepblueocean: figuring out if and under which conditions the Bitcoin network will tend toward an equilibrium in which all players follow the rules should be a priority for researchers. It's the biggest question mark hanging over Bitcoin's future. I also agree that the Eyal/Sirer paper seems naive about markets. -- PS. This thread should be at the top of this page. (Currently, another thread I started is at the top; I hope this thread shoots up past it.)
- stcredzero 13y ago
  The question of whether the current Bitcoin ruleset is incentive compatible strikes me as the most important Bitcoin research question: it answers whether Bitcoin, as a system, will continue to be stable over the long term. Is a Democratic Republic incentive compatible over the long term?
- tptacek 13y ago
  If you'd like to cast Andresen's innuendo in the best possible light, I won't object. But my assessment of his post is descriptive, not normative. When you respond to a detailed technical report by criticizing the way it was presented to the press, then suggest technical flaws without actually explaining what those flaws are, that is innuendo. Maybe you feel innuendo is warranted. Whether the mining game in Bitcoin is or isn't tenable over the long term doesn't much matter to me, because I'm one of those people who feel Bitcoin has no intrinsic value, and has a spot price today that represents in part irrational excitement about Bitcoin and in part a cynical scalping of that excitement by speculators. Bitcoin could be the most solid imaginable distributed cryptosystem and I'd still have problems with it. I was motivated to comment about Andresen's post because I was also struck by his Reddit comment on the ES paper, where it seemed that random laypeople on Reddit were better prepared to discuss the technical implications of the paper than he was.
  - cs702 13y ago
    I see your point, but still doubt that Gavin intended his post as innuendo. My assessment is that he's not yet ready to respond to the paper with carefully written, fully-thought-out, detailed technical counter-arguments, but wanted to assuage the Bitcoin community and address all those "sensationalistic headlines" put forth by "reporters on deadline" with an 'official response' as soon as possible.
sigil 13y ago
Thanks for your analysis. Even if this new equilibrium claimed by Eyal/Sirer doesn't hold up under scrutiny, haven't they at least succeeded in lowering the controlling percentage an individual would need to "cheat" the system in some way from 51% to 33%? In the ES paper, and in your responses, the assumption is a colluding group of miners. I find myself agreeing with you there; it looks like the colluders have more incentive to break ranks. But suppose a single individual controlled 33%. Couldn't they use this same strategy to benefit more than we previously thought they could?
- deepblueocean 13y ago
  > In the ES paper, and in your responses, the assumption is a colluding group of miners. I find myself agreeing with you there; it looks like the colluders have more incentive to break ranks. But suppose a single individual controlled 33%. Couldn't they use this same strategy to benefit more than we previously thought they could? Yes, I think they could. I'm currently trying to model what happens in mining pools where the pool master attempts to keep the pool's state a secret from the pool members to deter the kind of hopping behavior necessary for fair weather mining.

cs702 13y ago

Gavin's post is not innuendo; he's just trying to be diplomatic in my view. However, I could not agree more with deepblueocean: figuring out if and under which conditions the Bitcoin network will tend toward an equilibrium in which all players follow the rules should be a priority for researchers. It's the biggest question mark hanging over Bitcoin's future. I also agree that the Eyal/Sirer paper seems naive about markets. -- PS. This thread should be at the top of this page. (Currently, another thread I started is at the top; I hope this thread shoots up past it.)

stcredzero 13y ago
The question of whether the current Bitcoin ruleset is incentive compatible strikes me as the most important Bitcoin research question: it answers whether Bitcoin, as a system, will continue to be stable over the long term. Is a Democratic Republic incentive compatible over the long term?
tptacek 13y ago
If you'd like to cast Andresen's innuendo in the best possible light, I won't object. But my assessment of his post is descriptive, not normative. When you respond to a detailed technical report by criticizing the way it was presented to the press, then suggest technical flaws without actually explaining what those flaws are, that is innuendo. Maybe you feel innuendo is warranted. Whether the mining game in Bitcoin is or isn't tenable over the long term doesn't much matter to me, because I'm one of those people who feel Bitcoin has no intrinsic value, and has a spot price today that represents in part irrational excitement about Bitcoin and in part a cynical scalping of that excitement by speculators. Bitcoin could be the most solid imaginable distributed cryptosystem and I'd still have problems with it. I was motivated to comment about Andresen's post because I was also struck by his Reddit comment on the ES paper, where it seemed that random laypeople on Reddit were better prepared to discuss the technical implications of the paper than he was.
- cs702 13y ago
  I see your point, but still doubt that Gavin intended his post as innuendo. My assessment is that he's not yet ready to respond to the paper with carefully written, fully-thought-out, detailed technical counter-arguments, but wanted to assuage the Bitcoin community and address all those "sensationalistic headlines" put forth by "reporters on deadline" with an 'official response' as soon as possible.

sigil 13y ago

Thanks for your analysis. Even if this new equilibrium claimed by Eyal/Sirer doesn't hold up under scrutiny, haven't they at least succeeded in lowering the controlling percentage an individual would need to "cheat" the system in some way from 51% to 33%? In the ES paper, and in your responses, the assumption is a colluding group of miners. I find myself agreeing with you there; it looks like the colluders have more incentive to break ranks. But suppose a single individual controlled 33%. Couldn't they use this same strategy to benefit more than we previously thought they could?

deepblueocean 13y ago
> In the ES paper, and in your responses, the assumption is a colluding group of miners. I find myself agreeing with you there; it looks like the colluders have more incentive to break ranks. But suppose a single individual controlled 33%. Couldn't they use this same strategy to benefit more than we previously thought they could? Yes, I think they could. I'm currently trying to model what happens in mining pools where the pool master attempts to keep the pool's state a secret from the pool members to deter the kind of hopping behavior necessary for fair weather mining.