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evenly spliting costs and benefits is both impossible, and unnecessary. #1

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zack-bitcoin opened this issue Mar 29, 2019 · 2 comments

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@zack-bitcoin
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"Finding a solution to this problem requires restructuring incentives so that costs and benefits are split equally among all participants."
Absolutely false.
Also impossible to achieve.

@burleebau
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Can you say more as to why this statement is false? What makes it impossible to achieve splitting costs and benefits in an equitable manner? Proof?

@zack-bitcoin
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A simple counterexample.

I want to go to the football game with gf, but she doesn't like football.

Going to the game with gf is with 1000 to me, but it costs -200 to her.

So, in exchange for coming to the game, I bake her some cookies, which is worth 500 to her, and only costs me -300.

The net result is that I am 700 ahead and she is 300 ahead.
Since we both profit from this strategy, we will both want to participate.
The costs and benefits are not evenly divided. I get 400 more than she does.

Now why it is impossible:
Blockchains mechanisms are limited to pareto improvements. Anything else would require the participants to either be altruists, or require someone to violently force them to participate.
No one will voluntarily participate if they are only expected to lose value vs not participating.
Evenly dividing costs and benefits, in general, is not a pareto improvement. Some people would end up worse off for participating .

There are some great existing strategies to overcome tragedy of the Commons. Dominant assurance contracts, futarchy, and Nakamoto consensus being some examples.
None of them have this outrageous property that you claimed they would all require. Costs and rewards are not evenly divided among participants in any of these games.

@zack-bitcoin zack-bitcoin changed the title mistake evenly spliting costs and benefits is both impossible, and unnecessary. Mar 30, 2019
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