Human psychology is very important. Blockchains are not just about cryptography. This is why you can't presume for example that Gregory Maxwell or Shen-noether are more important than someone (not referring to myself specifically) who is not a cryptographer or mathematician by training but is also
not an oblivious anti-social nerd (and note I didn't put Vitalik in the class of anti-social, and his strong math, vision, coupled with his charisma is why Ethereum is a $billion market cap).
The following is a very important concept to understand if you want to understand why my design works.
I want you to note the weaknesses of voting is because voting is a centralized event that everyone is assumed to participate in. You are going to note that my protocol doesn't have such a centralized event, yet I posit
my design does have altruistic prime and as well a Nash equilibrium.Voting is power vacuum with very low informational content:
Disaster has struck the Bitcoin community. For the first time, something un-ignoreable has been proposed: a protocol change (“hard fork”).
Ordinarily, the protocol’s network-effects would protect the community from “anyone capable of causing serious damage to Bitcoin”. However, today they make the blocksize conversation mandatory and dangerous. All users, regardless of intelligence or expertise or other virtue, will be forced to adopt whichever network they think everyone else is adopting.
This compulsion means that, for the first time, the opinion of the ignorant masses (if misled, or merely divided) can actually destroy Bitcoin.
My proposal is not about voting. Voting for "A" costs the same as voting for "B", and the expected benefit from casting a vote at all decreases as the number of voters increases. I want something where, if A is a bad idea, "voting" for A costs more and benefits less.
Some Iron Laws of Political EconomicsMoney and Politics
Votes are bought. Not directly (this would challenge the voter’s treasured self-delusions, and be a focal point for coordinated outrage), but indirectly through tax breaks, welfare, military action, subsidies, research grants, licenses, etc. Loudly, it is claimed that these all serve civic purposes (the reality is “some”), but the quieter subtext is: “a vote for Candidate X is good for your bottom line”. On top of that, there’s ad-spending and professional campaign management. Because election-competition is zero-sum, these activities cancel each other out and are net “wasted work” for society.
Is vote-buying a bad thing? Who really knows (considering the long-run coordination problems facing this species…)? For today’s post, who cares?
I’m not arguing that this is “good” or “bad”, I’m just arguing that it’s “true”.
Votes become easier to buy as the number of voters increases. Though it may seem innocuous to say “the more voters there are, the less each individual vote counts”, the statement is in fact a grave paradox. Eventually, the sheer quantity of voters guarantees that each individual voter is irrelevant – a balloon inflated to such a grand size, that the stretched plastic simply vanishes altogether. If 3 people vote, a single vote can swing a possible tie, but if 10,000,001 people vote, a tie probably won’t even occur (making each individual vote completely irrelevant). The voting process can be defeated entirely, by taking a small “critical mass of uninformed voters” and, to it, adding some self-fulfilling expectations of hopelessness.
If informed voting were cheap, these self-fulfilling expectations would be expensive to generate. Unfortunately, voting is
not cheap, voting
costs energy that
most people won’t spend. This small detail means that any politician who can quietly use public resources to finance their bribes will always have an overwhelming advantage.
What Paul Sztorc means by if voting were cheap (or free), then it wouldn't be possible to use resources to influence a critical mass if 100% were voting because they chose to on their own accord without influence. When voting isn't free, most don't vote on their own accord (they only vote if influenced by some ideology implanted in their minds by those who have resources). Vitalik Buterin also explained this:
Note that there is one argument for why it might not make sense for a user to vote on one fork in a proof-of-stake environment: “altruism-prime”. Altruism-prime is essentially the combination of actual altruism (on the part of users or software developers), expressed both as a direct concern for the welfare of others and the network and a psychological moral disincentive against doing something that is obviously evil (double-voting), as well as the “fake altruism” that occurs because holders of coins have a desire not to see the value of their coins go down.
Unfortunately, altruism-prime cannot be relied on exclusively, because the value of coins arising from protocol integrity is a public good and will thus be undersupplied (eg. if there are 1000 stakeholders, and each of their activity has a 1% chance of being “pivotal” in contributing to a successful attack that will knock coin value down to zero, then each stakeholder will accept a bribe equal to only 1% of their holdings). In the case of a distribution equivalent to the Ethereum genesis block, depending on how you estimate the probability of each user being pivotal, the required quantity of bribes would be equal to somewhere between 0.3% and 8.6% of total stake (or even less if an attack is nonfatal to the currency). However, altruism-prime is still an important concept that algorithm designers should keep in mind, so as to take maximal advantage of in case it works well.
Note afaics, Paul Sztorc has a math error in his explanation of his 2x2 prediction market:
A “pro-increase portfolio” (PIP), has states {1, 3, 4*} purchased in specific quantities: 1 of {1}, 1 of {3}, and enough of {4} to achieve a total investment outlay of 1 unit (1 BTC, 1 mBTC, etc).
- If the blocksize fails to increase…share {4} will be worthless, but {1} and {3} must together be worth 1 unit, producing the full refund.
That assertion will only be true if proportion of the holder's share of the winning square is greater than or equal the portion of his share of all the losing squares.
Btw, the centralization (i.e. it can be gamed) flaw in Paul Sztorc's idea to use prediction markets to gather information or consensus amongst possibilities, is per the concerns he mentions in his conclusion and also analogous to the flaw of the consensus-by-betting of Ethereum's research on Casper, is that the determination of the outcome either requires a centralized oracle to declare it or it is self-referential so thus it devolves and distills down to the essence of "might makes right" aka Byzantine agreement voting. This is why so far only Satoshi's PoW solved the self-referential aspect by referring to an external burned resource (electricity) but this resource is also subject to power-law aggregation of economies-of-scale.