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132 sats \ 4 replies \ @elvismercury 25 Nov 2023 \ on: Book Review | Bitcoin: A Game Theoretic Analysis | ⭐⭐⭐⭐/5 bitcoin
Thanks for bringing this up, this kind of shit is my heroin.
You mention a couple of things that you would have liked to see covered in more depth, but based on your summary I can't figure out what this book gets "a lot wrong." Can you expand on that criticism?
A lot of it was the framing of the scenario's as dire, without mitigations.
Details on how negative scenario's are achieved practically by attackers was also lacking in some cases. So in some cases you're hand waved into some of these negative scenarios, without any detail on how they were achieved in the first place, or the fact that lightning and layer 2 solutions may make such attacks moot.
So a lot is assumed up front, mainly that the Bitcoin ecosystem being static and non responsive to attacks. Which I don't agree with.
Here's one random quote that I disagree with for example "If Bitcoin has a security budget issue so serious that corporations are considering stepping up to protect the network, it would appear the incentives are broken"
I mean to me this statement seems self evidently contradictory.
Another opinion stated as fact by the author
"Thus the only way Bitcoin can function to preserve value is if the price goes up forever, which clearly it cannot do and does not do."
first i disagree with the framing that bitcoin need to keep going up forever for it to preserve value. second i disagree that it can't go up forever, nor do i think that its clear that it does not do this.
"if a persistent 51% attack on the network occurs, an economic predominance may find that the only acceptable solution is to defer to a leader or group of leaders...Bitcoin should be governed by some central authority. Once centralization becomes inevitable, more parties will be able to use it without fear of certain risks, and growth will continue..."
LMFAO ^ that pretty much showcases the mindset of the author is some respects, and it's not hard to guess that I totally disagree.
"...Centralization is by far the most bullish case and goes hand in hand with an up only general philosophy about Bitcoin"
Just no.
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Huh. We're getting very different readings from this.
LMFAO ^ that pretty much showcases the mindset of the author is some respects, and it's not hard to guess that I totally disagree.
Here's the last couple quotes you provided, with more context:
Bitcoin could become overtly centralized. There are many paths that could lead to this. [...] If a persistent 51 % attack on the network occurs, an economic predominance may find that the only acceptable solution is to defer to a leader or group of leaders. [...] Once this occurs, the network may discover most things continue to work well, and may begin to build a governance model around the leader. [...] Recalling that many parties may be indifferent to centralization, the threat of attack will not scare these parties out of Bitcoin. [... O]ver time the preponderance of economic activity could be undertaken by those who are indifferent to centralization. [...] this could snowball into an understanding held among the larger players that to continue to operate securely and with the widest participation, Bitcoin should be governed by some central authority. Once centralization becomes inevitable, more parties will be able to use it without fear of certain risks, and growth will continue. [...] Centralization is by far the most bullish case and goes hand-in-hand with an “up only” general philosophy about Bitcoin."
My summary:
- Different attacks could be mitigated with centralization.
This is almost tautologically true, as the attackers are likely to be nation-states themselves.
- Once centralized, the network may continue to "work well" for the use cases most people care about.
- Some hardcore bitcoiners will find this unsatisfactory and leave; others may remain, perhaps even most users.
In the scenario being entertained, btc has found broad use. As we already know today, most people in the world don't care about the same issues bitcoiners care about. A more centralized / censored version of the network may very well not upset the masses overmuch, especially given the opposition that might be brought to bear.
- Using the "sanitized" version of btc eliminates a host of risks and uncertainties, so many people might prefer it, adding a feedback loop to the network effect.
I find this a plausible scenario. Just because I don't want it to happen doesn't mean that the logic is unsound. From watching the talk, and skimming some parts of the book, I haven't detected anything about the author's mindset that I take issue with.
He puts it very well here:
[A]lmost the only thing certain about Bitcoin’s future is uncertainty. A continued “up only” trajectory will eventually lead to either speculative attack or attempts to capture or centralize the protocol. At this point the Schelling point provided by Nakamoto consensus could be challenged. How one feels Bitcoin will navigate this determines how one will treat Bitcoin leading up to this, and how people in aggregate feel Bitcoin will navigate this will determine the behavior of Bitcoin.
How people react to these forces that unfold will have everything to do with how btc evolves, whether it's the semi-centralized version described above, or something else. I don't get the author as advocating for any particular thing, just pointing out the possibilities.
I really like what I've read, I'm grateful to you for pointing it out. Definitely the most rigorous reasoning I've ever seen on these dynamics.
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It is a very challenging book, worthy of your time. And I don't disagree with you or the authors points here at face value.
But often he leans this way towards speculative thinking around centralization being a "good thing" for Bitcoin in terms of NGU/stability (these are besides the point of Bitcoin imo, but do help). To such a degree that it's hard to not take much of what he says as sub-textual advocation for such things .
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what a good question to answer over coffee. brb.
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