Topic: John Nash created bitcoin - page 11. (Read 22259 times)

I think one is reading too much in what isn't there.  This is how people invent religions, by seeing purpose when there wasn't any.  In my idea, the whole concept was rather simple: Satoshi wanted a non-centralized token transmission system, and needed to solve a few technical, and a few economical problems.  There were already several elements lying on the table and he put them together (which is the merit he really has).

1) He needed to get rid of the "central bank".  The block chain concept, where instead of tokens to be materialized, TRANSACTIONS were the fundamental element, was a great insight.  In as much as it is impossible to prove that transmitted digital tokens aren't double-spent, if everyone has a list of past transactions, that solves the double spending problem.  So the idea was to get all participants to get the full list of all transactions at a point.

2) he then realized that he needed to solve a consensus problem, because of the finite propagation delays on the network: what if some participants received valid transaction A, and other participants received valid transaction B, and A and B are spending the same tokens ?  How to come to a consensus ?

=> he needed a kind of decision game so that at any moment, only one decider was going to decide upon the consensus, that is, the full list of accepted past valid transactions.  As he didn't want (at first) a central authority, he needed a LOTTERY BETWEEN PARTICIPANTS.  However, in order to avoid a sybil attack, he proposed to do the lottery with Proof Of CPU work.  --> a lottery every 10 minutes.

3) he needed also to create coins, and he realized that creating coins was going to give seigniorage which was going to undermine the belief system in the money.  So he (though he had) a brilliant insight:

"the CPU work spent in winning the lottery to determine consensus, is going to be rewarded with new coins ; that looks fair, because 1) a priori everyone gets the belief that they could have won the coins and 2) people doing something useful get rewarded".

That's more or less it.  I don't think Satoshi's insight went beyond that, but that was already quite something.

The rest consisted in:

1) working out the details
2) thinking about the consequences of choices made when working out the details.

One of the things Satoshi was religious about, visibly, was the fact that there should only be a finite amount of coins in circulation.  He must have been influenced by the Austrian school and gold bugs.  In fact, if he could have put them into circulation right away, most probably he would have preferred that, but as he now needed to emit them by people finding consensus, he HAD A SERIOUS PROBLEM: how to reward people in the future when all coins are emitted ?

In order to obtain a finite amount of coins at the end of the universe, he needed to diminish rewards ---> simple solution of block reward halvings.  In order to reward them in the long term, he needed transaction fees. 

In order to limit the coin emission, he needed the lottery to take place only once every 10 minutes, and because he didn't want to rely on real time (in the end, he did!) he invented the scheme of increasing difficulty.

The logical consequence of this was that the economic cost of the PoW at the 10 minute reward was going to rise to be about equal to the market value of the emitted coins.  This would lead to totally crazy amounts of PoW, the rise of specialized hardware, and the killing of the original idea of just "a lottery between participants to decide who was going to decide upon consensus next with Sybil mitigation".

Satoshi's idea of having most payments done with bitcoin led him to understand that the block chain as he designed it, would have to grow at 100 GB a day.

However, as is often the case with inventions, when one sees the consequences that were orthogonal to the original design ideas, the right way is to discard the invention because it fails in implementing what one had in mind ; but most often, one perseveres in modifying the initial design goals so that the invention in which one has a lot of emotional and intellectual investment, ends up suiting the goals.  I think bitcoin has been created exactly that way: when Satoshi realized (partially) that his invention wasn't exactly what he set out to do, but not being able to think of anything better at the moment, he considered that it should go ahead and modified his initial ideas so that they suited the thing he invented.

This is why bitcoin is the clunky thing we see it is, and not the thing Satoshi set out to design, but failed to do so: a digital peer-to-peer trustless, decentralized money and payment system for all to use.

One can of course always think that this clunky thing is what he intended to make, but this is like explaining why God, in his perfection, allows man to make war and allows him to suffer unfairness.  Simply because there wasn't any god, there wasn't any masterplan, but things just happened, and they weren't designed this way or another way.

Well if you see this only through the prism of economy this is right.

But if you think more generally in term of propagating "stananist agenda", law of the jungle, irrationnal risk taking for greed, etc, it can still have interest in that view.

And on a bigger perspective it's easy to see how that could benefit "elite" in the sense illuminati/satanists .

ftfy

You will eventually realize I am correct. Hopefully realize it before it is too late for you to escape the 666 totalitarianism coming.


All the $billionaires and $trillionaires will be doing their settlement in BTC.

It will be $500,000 per BTC.

That is obvious.

You don't seem to understand money very well. And I am not going to write a treatise here. It isn't my responsibility to fix your ignorance about money. I say this forcefully because it behooves you to do some learning so you stop spouting off incorrect judgments.


It isn't intended to be used by the masses. It is intended to be used by the $billionaires and they have the most wealth.


Because you don't understand money and what time it is. You don't even understand that your own EU is collapsing into abject totalitarianism.

You are far too smug and overconfident. A well fattened cow ready for the slaughter.

You have a high IQ but you aren't motivated to use it. Because you are too comfortable. The cows don't try to escape, because they have plenty of grass to eat and fields to roam. Yet they do get slaughtered one day.


Correct. But entirely irrelevant to what we are discussing. That you don't realize it is irrelevant is indicative of why you are blind to the reality of what is going on.


You don't care much because you are smug and comfortable. Lots of grass to eat.


You've been refuted upthread but you continue to repeat your errors instead of studying what I taught you and contemplating more deeply on the permutations of what I taught you.


I refuted that a few moments earlier upthread. You have so many errors.


You have entirely ignored everything. Amazing. It is like you have selective reading comprehension. You are clearly in a massive state of cognitive dissonance.


Look over the forest, not just at the bark on the trees.


No man. Most BTC is hodling. MAJOR MISTAKE IN ANALYSIS!!

You are way off. Only a very small % of BTC supply is traded on exchanges. The same coins traded over and over again.


OMG you are really blind.

I don't believe in that "monetary reset".  There will be financial crises, as there always have been.  No big deal.  Crypto won't help.


I use deflation simply in terms of "monetary unit acquires value".  

From wiki:

When a monetary unit acquires value, there is deflation of that monetary unit.


You can't have it both ways.  You can't require the ideal money unit to keep a stable value (with respect to a large basket) and have its debasement *numerically* specified in advance.  What you can do, is to have strict target rules for debasement to act to reach an inflation target.  In as much as these rules are immutable, they are non-manipulable.

This is why Nash thought of the Euro as close to an asymptotic ideal money:

(from the wiki on ideal money).

So, the "schedule of debasement" as a non-manipulable rule to reach the inflation target, yes.  A pre-programmed, blind, debasement scheme: obviously not, because otherwise, the introduced inelasticity cannot guarantee price stability or price inflation stability, which is the defining characteristic of ideal money.  

It is why gold is not a possible ideal money:

exactly because one cannot apply a debasement (or destruction) to keep its value constant.

This is the other reason why I don't think it was Nash that created bitcoin: the economic model of ideal money of his hand, would never go for a collectible with DIMINISHING emission.  At best, Nash would have built in an emission curve that would follow predicted adoption (which is essentially impossible in advance): few emission in the beginning, and issuing MORE AND MORE bitcoins as time advances, so as to keep the price of bitcoin constant with growing adoption.

In fact, there would have been a way to do so: instead of increasing difficulty to have constant (and 4-year stepwise decreasing) emission rate, have constant difficulty, compensated by Moore's law.  As such, the price of a bitcoin would more or less remain constant, and equal the cost of the work spent on making them.  You would accept bitcoins against value if it would cost you more to make them, and you would make bitcoins if it would cost you less making them than buying them.

PoW at constant work cost, was a way to implement something much closer to ideal money, than bitcoin's sound money doctrine.

Im quite in line with this idea

In fact my initial idea in seeing blockchain only as distributed ledger lead me to think the whole interest of pow is very limited in this context, and the same result could be achieved in way that are much simpler and less expansive risk, like "fault checking " even if the real pb is not exactly fault checking, but selecting one between two valid version , but even this could be achieved without pow. And the base cost / risk to operate distributed database is not that high.

Maybe there is something im missing.

But it could look as the whole pow thing was just inserted to put some game theory in it, and give it more speculative value or for purely economic reason  ( in the sense market economy) than to really be the most efficient way to keep à decentralized ledger consistent.

Satoshi designed it that way BY ERROR (or by cheating and lying).  I simply don't think that bitcoin is going to fly so high.  It will find its niche, namely an unregulated reserve currency for big sleazy business, and as a highly speculative toy for gamblers/traders, and that's it.  Bitcoin, nor any other block chain type crypto, will be "the future of money" for most people, simply because it is too clunky, authorities won't let it happen, and in the end, people are material beings.

So, yes, I agree with you that the design of bitcoin is such that it will remain immutable, and that most of the current characteristics of bitcoin are understandable by game-theoretical arguments.

Where I don't agree with you is to think that bitcoin will become world-important - it will remain in a niche.  Like all crypto.  People will never pay their groceries with crypto.  Forget that.  Fiat systems will remain in place as long as humanity is still in command and states exist.

Where I sort of don't agree with you, but I don't care much, is that I have good reasons to think that bitcoin's design has too many clunky crypto design features to be the product of a mind like Nash.  But it could be ; but as, moreover, Bitcoin's monetary philosophy is ALSO not in agreement with Nash ideal money, I tend to reject the hypothesis that Satoshi was Nash.  I tend to think it was a guy with some bright ideas, and some limited crypto and math understanding, and some limited economic understanding, that made bitcoin in his basement.  But I could be wrong.   The "design features" that I find clunky in bitcoin, don't break it, but they are simply clunky.  There's nothing "brilliant" about them.

Where I don't agree with you is that bitcoin is designed by the "global elite" because apart from a gambler's token, it is not going to go anywhere that can interest the "global elite".  The sleazy business it is profiting is not the global elite, but second-hand maffioso.  And if it were, against all odds, designed by the global elite, it is a failure in any case.  Don't stare yourself blind on the "market cap" of bitcoin: that's nothing else but one big huge speculative bubble, driven by greater-fool games.  The economic value of bitcoin (the value creation it allows over its competition: fiat, in economic activity) is most probably 100 times smaller, and dominated by dark web markets, its main economic utility for the moment.  Bitcoin's economic value must at most be a few hundreds of millions of $$ worth ; that is, the value creation it helped create which wouldn't have been possible with fiat because of legal or other obstacles.  The 20 billions are nothing else but greater fool speculators waiting for still greater fools.  If they don't find greater fools after 10 years or 15 years, that bubble will collapse.  But there are still a lot of greater fools to be taken, so as long as the black tulips rise in price, you will find speculators flowing in.  But that is not economic value.  

You are mistaken. By the time Bitcoin reaches its intended use case phase after the global monetary reset 2024ish, Bitcoin's debasement will be winding down.

Also you are causing confusion with your incorrect use of the term deflation. Deflation is an economy-wide phenomenon so would only apply if Bitcoin was the unit-of-account widely employed in the economy. Although it is true that in a few more years, Bitcoin will be causing massive global deflation.

Also Nash specifically wrote that debasement was compatible with his ideal money, as long as the schedule of debasement was non-manipulable (which is the case for Bitcoin).

Eventually the speculative value of Bitcoin will become nil as it becomes the home of $billionaires-only (which btw is mathematically why all the speculative value in the economy will leech off into BTC), then the miners will not longer be able to do these manipulations of the speculative exchange price as they are currently doing with for example Litecoin.

Welcome aboard. You have a lot of reading to do. You would be well advised to read my entire archive.

He lied by not mentioning that isn't his intended use case. He was just responding to a question about if Bitcoin could scale from a bandwidth consideration alone. You can find other cases where he lied by not pointing out how impractical something would be, such as how he claimed some nodes would still be willing to process a transaction for free:


So why can't you add 2+2?

He knows it will become centralized yet some how he thinks hobbyist nodes will still process for free. Satoshi was a liar.

Btw, John Nash was a prankster and deviant.

I was listening to him in an interview and he said he isn't concerned about helping the poor, because he said they are adjusted to their poverty.


Now you are starting to understand.

So why can't you add 2+2?


Yup. So why can't you admit the evil genius of Satoshi?


Btw, I think it was necessary to murder John Nash before the blockchain scaling debate reached its boiling point. Because by now even people such as yourself are starting to realize something smells funny.

The movie contained many lies and misrepresentations of the facts. Read the biography book instead.

Bitcoin is basically two part, one of them is game theory, the other is decentralized transactional database.

Game theory is all about reward vs risk. Bitcoin pow is exactly this. Into maintaining a constant with the risk/reward thing for miner. The risk is the difficulty ( 1/rateof(good nonce)), and reward is the block reward associated with taking the risk associated with finding the good nonce.

The whole mining for reward thing totally fit within game theories.

The other aspect is speculative value, which is something Nash also studied.

Not saying it's Nash who made it, but the model could fit.

Depend on what you call "elite"

Originally elite is the same root than "elected" and are supposed to emerge as responsible to handle certain things for the other people better than what they would do themselves. Shadow elite in itself is bit an oxymoron.

But if you are talking about money worshiping,  if you study occidental philodophy, it's really classic. It's even the stuff in the first star war trilogy with the federation of trade against jedi council . Well just to say it's very classic abc of philosophy since the beginning and plato wrote many about this.

It's not really about elite, but psychology of the mass and pyramidal nature of society. With gauss curve etc you know very small fraction of person really study math or philosophy or care about law , justice, truth, good & all.

It's really a central question in occidental philosophy since the beginning.

And the idea is always the same that money worshiping or greed, materialism , doesnt lead to wisedom, or idealism. Actually materialism is the enmy of rationality and moral for plato. But majority of people are materialistic, and plato was very aware of this.

And it's just where you get Nash theories with proba and game theory who are made to model this "low end of the pyramid" psychology, and model it as a coherent whole with higher purpose even by taking in account all the economic game theory that animate trader and speculators.

And im not sure the whole demarch would be so coherent coming from plain dumb money worshiping greedy person. Those people just run mining hardware and play on bitrex. They dont design whole system like this in the shadow.