
Coordination, Good and Bad - dayve
https://vitalik.ca/general/2020/09/11/coordination.html
======
seibelj
Vitalik is the creator of Ethereum. Ethereum is a platform for permission-
less, programmable money and code that moves money and digital assets. Over
$100 billion in assets are now operating on Ethereum. Here is a link to an
explorer for USDC, a digital asset that is backed by dollars that has about $2
billion custodied by Coinbase and Circle
[https://etherscan.io/token/0xa0b86991c6218b36c1d19d4a2e9eb0c...](https://etherscan.io/token/0xa0b86991c6218b36c1d19d4a2e9eb0ce3606eb48)

I guarantee you that nearly every digital asset breaks numerous laws in every
developed country. Bitcoin and Ethereum help violate money laundering laws
every hour as many $10k+ transactions execute without proper forms filed with
government agencies. Whereas it takes a shitload of money to obtain money
transmitter licenses in the USA to operate in every state, it’s trivial to
accept huge amounts of money across state and international borders once you
create a cryptocurrency wallet.

I’m saying this because the technology has surpassed the laws. As Uber and
Airbnb became so successful that governments bent, so too is cryptocurrency
powered by blockchain technology forcing the government’s hands. A paradigm
shift is occurring under everyone’s noses!

If you choose to ignore blockchain, don’t be surprised when it becomes a very
crucial technology. It is upending centuries of financial customs, rules,
laws, and institutions.

~~~
XMPPwocky
"A very crucial technology" to whom? For what purpose?

~~~
seibelj
To build a financial system completely separate from the state. To avoid fiat
currency, if you desire. To conduct commerce without government interference
whatsoever.

This is not a pipe dream. This happens every day in increasing numbers. I’m
sorry if you don’t like this.

~~~
CharlesW
> _This happens every day in increasing numbers._

Nope. Bitcoin trading volume (for example) has plummeted to a miniscule
fraction of its late-2016 hype height.

~~~
seibelj
It doesn’t seem you are familiar with this space, given that Ethereum
transaction gas fees have hit sustained all time highs. Bitcoin and Monero
transaction counts are extremely high despite the price of the assets being
well beneath their height, signaling organic adoption and utility beyond
speculation.

It’s difficult for people outside of this space to see, as you only notice
when news hits the front page. I work at a major crypto exchange (Poloniex)
and all of our metrics are very bullish. I don’t think your 2017 opinion is
relevant anymore.

~~~
roland-s
Does high tx count and low price really mean utility? Seems it could also mean
market is unsure of the asset's intrinsic worth and speculations are
constantly in flux. Or could mean lots of speculative alts being built on top
of main chain, things like Omni?

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singron
> there are mathematical proofs that at least one stable Nash equilibrium must
> exist in any game

That's actually not true. E.g. the game "you get the amount of money you ask
for" has no equilibrium because you can always ask for a larger number. The
proof on wikipedia doesn't apply to this game because the strategy space isn't
compact. In real life, this doesn't come up much because usually your strategy
is bounded somehow (e.g. you are limited by available cash+credit). I'm not as
familiar with the other conditions listed and how they might relate to game
strategies, but it would be interesting to hear an example game for each.

~~~
tomrod
Does your example classify as a game? Who are you playing against? Usually
nature isn't consider a "player" per say, but rather just defines an
environment. Otherwise, a game consists of three structures[0]:

• a collection of participants, or players.

• Each player has a set of choices, or strategies, for how to play/behave.

• Combined behavior results in payoffs (satisfaction level) for each player

Macroeconomic theory handwaves and says assets are generally bounded above by
some non-binding constraint to rule out this behavior you've pointed out, for
the record.

[0] Lazy google search result scribbed liberally from
[https://www.cs.cmu.edu/~avrim/598/lect0504GameTheory.pdf](https://www.cs.cmu.edu/~avrim/598/lect0504GameTheory.pdf)

------
webmaven
Hmm. In the context of cryptocurrencies, I wonder what incentivizing defection
would look like? eg. if several entities are colluding on a 51% attack, what
mechanism would benefit a defector controlling 20% while screwing over the
other colluding 31%, thus warning the non-colluding 49% of the collusion?

------
zuhayeer
Interestingly, in a somewhat related notion, I’ve been noticing that there’s
been a recent push in society towards individuality (over collectivism). In
the way people view right or wrong, many have started to believe in their own
preferences as ideals. While it’s good to have differences, it’s interesting
to see the downstream effects of an overcorrection for the self. For example,
doctors are now being accused of immorally attacking someone for being obese
(seen as a personality trait), when in reality they’re just trying to help
patients be aware of their unhealthy habits so they can improve their
condition.

Because we tie how we view the world to our individuality, we also adopt our
own flaws as part of our objective compass. And things get interesting when
people with that same frame of mind run into each other.

------
cryptica
I've always felt that 'moral barriers' were the main forces which have allowed
capitalism to operate relatively smoothly in the past (at least in some
countries). That's why I've always been against Milton Friedman's philosophy
that each person should only be motivated by-self interest.

In many ways, this philosophy is the reason why we ended up where we are
today; with a deep and growing class divide fueled by colluding self-
interests, moral depravity and hypocrisy.

This is because self-interest and cooperation are not mutually exclusive; it's
the opposite; they are mutually reliant.

But cooperation born out of self-interest does not yield the same results as
cooperation born out of altruism and a sense of moral justice or collective
pride.

------
koonsolo
> price for some product between $5 and $10; the differences within the range
> reflect difficult-to-see factors such as the seller's internal costs, their
> own willingness to work at different wages, supply-chain issues and the
> like.

No! Why is it so difficult for people to understand that price is set by
supply and demand? Cost has absolutely no influence on how much the customer
is willing to pay.

~~~
tuesdayrain
>Cost has absolutely no influence on how much the customer is willing to pay.

Giffen goods are an example of where that isn't true. I have personally
experienced it myself when I became more tempted to buy BTC as the price
started rising.

~~~
koonsolo
It still has nothing to do with cost though.

The only things influencing price is always the product and the consumer. How
much it cost to make the product has nothing to do with that price, even for
giffen goods.

~~~
tuesdayrain
You're right, I had an incorrect definition of "cost".

------
sova
I never thought of "unstable games" before and that is quite revelatory when
thinking about money, but I do wonder about cooperation because maybe not in
Ethereum-land is there much joint minting of money, but there are subtle
systems forces in place in the physical world that do mint money cooperatively
and that might skew some of these perfect mathematical results, for example.

------
trevelyan
Vitalik is spinning a false dichotomy. Saito
([http://saito.io/arcade](http://saito.io/arcade)) has already solved the 51
percent attack.

The mechanism used (using fee collection as work) eliminates the profitability
of collusion while still rewarding cooperation.

------
mudlus
Still tons of misunderstanding in this space.

The financial system is supposed to have regulations that protect everyone in
an economy. But, what they've ended up doing over the years is only applying
to small players and retail (everyday) investors.

Trump and his friends front ran the market crash. Then, after a records
stimulus was passed, profited as over 200k US citizens died. That's just
America (though America is the defacto reserve currency since WW2). They don't
get punished, and they are just the _obvious_ cheaters in the game of
international finance and crony capitalism.

The USD is also the de-facto currency for: child pornographers, international
hits and murder contracts, paying for military grade weapons, enforcing
sanctions on entire economies, drugs, money laundering, literally everything--
because it is _the_ reserve currency.

Enforcement is for the people at the bottom, not the top. Ethereum can't
change that, it's just offering the same financial services that crony
capitalism offered but with a MORE oligarchical rules set. That's why it's
funny his "ideal" and "realistic" pictures for success in cooperation both
have pictures of castles.

Bitcoin is anarchist money (for now) because it uses entropy to secure instead
of force/violence (all fiat currency requires a military to secure). It
questions the some of the base authorial structure of all human
society/nation-state economics. It is built with disorder in mind. It has
built in distrust of authority. Authority is(or requires) force (to enforce).
It's important to question authority--that's the only way to progress, no
power/responsibility/trust should be given indefinitely. With that in mind.

Ethereum is a new form of authority, just like Bitcoin. But, it does some
different stuff with the responsibility that is bestowed upon it. Ethereum
owners (people who design, say, "smart contracts," or whatever), have already
abused their power, this makes it more dangerous than Bitcoin. Recent
SushiSwap stuff. Eth classic is constantly getting 51% attacked. There has
been rollbacks. The devs change the inflation rate at will. They are
constantly trying to move at a breakneck speed, so it's scary for people who
want to hold money long term because you never know what you're gonna have to
adapt to, or whatever. It is designed to play with new trust models, it's
totally different than Bitcoin. Could be fun, but is designed to be more of a
wild west than Bitcoin. If anything it's really better to see it as another
layer to Bitcoin. If it surpasses Bitcoin in value, something will surpass it.
If Bitcoin fails, it will likely fail since it is tied to the Bitcoin economy
(wrapped Bitcoin, code similarities and cryptography standards used). If
you're interested in Ethereum, there's already a better Ethereum, it's called
TRON. And what about Polkadot. etc etc.

If you're interested in going down this rabbit hole. Start with tech
deflation.

IMO, On a macro level we're seeing the same thing that happened after the
industrial revolution, leading up to WW1 (though historians still argue about
the cause of WW1--I think it's clear they'd have a lot to argue about if we
had a WW3 soon, as well). It's called tech deflation. Of course, I'm not a
historian or an economist. SO TAKE THIS ENTIRE DIATRIBE WITH A GRAIN OF SALT.

Deflation is political suicide because business money goes where there is
promise of a strong consumer base and labor force. But inflation is also
effectively gaslighting citizens of the inflating nation-state. That's why we
see such disparity through asset bubbles and pops every decade. The problem
isn't inflation, though, it's that there isn't another legal option for all
people. Money is a good that is consumed like anything else. You can keep fiat
AND your Amazon gift card AND have some Bitcoin. Accept deflation into your
life. Bitcoin is an anti-inflationary anti-censorship (Ethereum is not)
choice, it is the best option for an equally distributed access to deflation
that humans have right now (better than gold, or whatever, anyway). Honestly,
believe it's the best first step to preventing a third world war.

Ignore Vitalik's grains of salt, ignore my grains of salt

Buy Bitcoin

