Twetch ·
I haven't written anything about economics for a while.
The fact is, we're past that point. Those who want to learn the economics side of things are a bit late, but the materials are out there.
Now it's about getting people building. That's my focus now.
Replies
Twetch ·
Talking of economics I'd be interested to get your take on this video that uses the movie Inception to examine crypto economics, and blockchain fundamentals:
https://www.youtube.com/watch?v=fJGuxcEvats&feature=youtu.be
Twetch ·
3/3 Adoption of Bitcoin solves every one of those "problems."
And, using a different PoW approach will always have trade offs that actually lead to more problems than it solves.
Twetch ·
1/ The use of Inception seems a bit forced, and while it may be a fair analysis of the film, it is a very different topic from the blockchain. The use of the film is a distraction from what could be said about blockchain without that reference.
Twetch ·
2/ As for the economics, Bitcoin actually incentivizes everything you says it doesn't incentivize. The issue is not the network structure, the PoW algorithm, etc. as you suggest, but the volume of real use, of real value the network is "carrying."
Twetch ·
Hey! Thanks for watching, and for feedback. Appreciate it. Can you expand on how more volume and more adoption solves things?
Twetch ·
Short version (I've had this conversation with saito.tech folks before, not interested in rehashing it in full...)
Look at what happens as the block subsidy goes away, and how block orphaning works, what leads to orphans. Also, how does mining work?
Twetch ·
Can you predict the next hash to pass the difficulty algorithm without brute-forcing it? No. Ergo, no free-rider problem.
And, elegant pruning is built into Bitcoin already. Ergo, no tragedy of the commons.
Twetch ·
As transaction volume increases, fees are what miners seek. It's exactly what saito claims to be building. Fees are a balance of hash and block size, block size being a function of investments in node software, transaction propagation, etc.
Twetch ·
Final point:
Because all of this is competition by design, decentralization is ensured. Economies of scale in one area of investment comes at the expense of another area of investment. But, only when there are pressures on that competition from demand.
Twetch ·
Thanks for taking the time. Sounds like you've dug into these things with Saito before. So don't want to push you into a long back and forth. I appreciate your explanation and thoughts as provided above.
Twetch ·
Final thought: PoW currently rewards mining. So miners are incentivised to invest in more mining. Not building out the network. Yes: when the block subsidy is gone then fees are all. Miners will freeride on shared TX, and hoard their own. Why share?
Twetch ·
Sure thing. I appreciate your not pushing. Others have not always been so respectful.
The gist of where saito goes wrong is in assuming the design of Bitcoin is flawed because of 2015-17. It's not the design, but the people who were flawed.
Twetch ·
Not expecting an answer to my last Twetch. Just wanted to put the thought out there. And did so before seeing your last message. Thanks for the dialogue. Nice to have engaged chat. Keep building!
Twetch ·
Unfortunately some people only learn in real time.
Twetch ·
What is mining?
Hashing is an input to mining. It is not mining.
And no, they won't free ride. They'll be a cost to others who won't bear that cost willingly.