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Bitcoin Tech Talk #511

Interesting Stuff

The problem with extremes is that the middle, which is most likely to happen, rarely gets explored.

The weirdest game theory incentive for BIP110 is that the more people want to dump BIP110 coins, the more transactions they'll add to the BIP110-chain which presumably will have much lower hash rate. Eventually, the large backlog of transactions will cause higher fees and with it, more incentive for miners to mine that chain. Depending on the price ratio, this still requires a huge amount of fees to motivate miners to switch. For example, if the price ratio is 10:1, then fees will have to take up 28.125 BTC (28.125 + 3.125~31.25) on the BIP110 chain for similar profits. Which is 28125 sats/vbyte average for the block, which is really, really high, but that's what it'll cost to dump coins at that ratio. Higher ratios require even more fees and lower ratios require less. tl;dr The more people dump BIP110 coins the more miners are incentivized to mine the BIP110 chain.

I honestly wonder how exchanges will handle things come BIP110. I suspect most of them will do nothing, but there's a non-zero chance of some serious headaches in that case.

Waiting is hard, especially when there are lots of people shouting at how important it is to act now. That's basically what holding is like and it's not so easy.

Here's a pathological scenario: Let's call the BIP110 enforcing chain Coin A and the non-enforcing chain, which very well may be longer, Coin B The two chains split. Coin A trades at 100:1 Coin B. Miner buys 1000 Coin A for 10 Coin B and then starts mining on the BIP110-enforcing chain afterwards. Coin B chain get wiped out when enough miners do this and the BIP110-enforcing chain gets longer than the non-enforcing chain. Not only did the miner gain 1000 BTC on the now single chain, the 10 BTC that was spent is returned because it's no longer a valid tx on the now-single chain! Game-theory wise, this is extremely profitable, depending on the price ratio. For me, this will be a test of how optimized for game theory miners are.

Don't trust, verify is easy to say, hard to practice.

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Bitcoin Tech Talk #510

Interesting Stuff

They need to have more games like that 3rd place game. Maybe the offsides rule should be only be about the feet or something.

If people can bully you into a position, that position isn't really yours is it?

Gambling is fun and games until someone decides to cheat. Fun requires some level of trust.

There is no freedom without virtue.

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Bitcoin Tech Talk #509

Interesting Stuff

Fights have a way of tiring people out. It's not all bad.

Argument from authority ceases to work where there is no trust of that authority.

Exposure to Bitcoin isn't Bitcoin. We're not going into a bull market until this lesson is learned. Sorry, I don't make the rules.

The deeper the belief, the longer you stay engaged. Good thing the Bitcoin rabbit hole is deep.

Ultimately, the circular economy will emerge to get around fiat chokepoints.

People secretly like centralization because it gives them someone to blame if things go wrong. Girardian scapegoats are preferred to taking responsibility.

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Bitcoin Tech Talk #508

Interesting Stuff