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To: Jeremy Rubin <jeremy.l.rubin@gmail.com>, Bitcoin Protocol Discussion
 <bitcoin-dev@lists.linuxfoundation.org>
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Subject: Re: [bitcoin-dev] Does Bitcoin require or have an honest majority
 or a rational one? (re rbf)
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> The proof-of-work also solves the problem of determining
> representation in majority decision
> making. If the majority were based on one-IP-address-one-vote, it
> could be subverted by anyone
> able to allocate many IPs. Proof-of-work is essentially
> one-CPU-one-vote. The majority
> decision is represented by the longest chain, which has the greatest
> proof-of-work effort invested
> in it. If a majority of CPU power is controlled by honest nodes, the
> honest chain will grow the
> fastest and outpace any competing chains. To modify a past block, an
> attacker would have to
> redo the proof-of-work of the block and all blocks after it and then
> catch up with and surpass the
> work of the honest nodes. We will show later that the probability of a
> slower attacker catching up
> diminishes exponentially as subsequent blocks are added.

It's interesting that Nash Equilibrium isn't mentioned here.  Since each 
miner has the option to either contribute to the longest chain or not, 
even if the miners know what strategy the other miners will use, they 
still wouldn't change their decision to contribute to the majority.

> For example, if I run a shop that takes rain checks, but I sell an
> item to a higher bidder who didn't have a hold on the item, that is
> not honest, but it may be selfish profit maximizing.

It would be honest if the store policy said ahead of time they are 
allowed to sell rain checks for more in such an occurrence.  Although 
this is a good example of the difference between honest and rational.  I 
think this means it's not a Nash Equilibrium if we needed to rely on the 
store owner to be honest.

> Satoshi said an honest majority is required for the chain to be
> extended. Honest is not really defined though. Honesty, in my
> definition, is that you follow a pre specified rule, rational or not.

My take is that "rational" is probably a better word than honest.  In 
terms of a Nash Equilibrium, each participant is simply trying to 
maximize their outcome and honesty doesn't matter (only that 
participants are rational).

> It seems a lot of the RBF controversy is that Protocol developers have
> aspired to make the honest behavior also be the rational behavior.
> This is maybe a good idea because, in theory, if the honest behavior
> is rational then we can make a weaker assumption of selfishness
> maximizing a parameter.

I'm curious, can RBF can be described by a Nash Equilibrium?  If yes, 
then it also shouldn't matter if participants are honest?

> Overall, it might be nice to more tightly document what bitcoins
> assumptions are in practice and what those assumptions do in terms of
> properties of Bitcoin, as well as pathways to weakening the
> assumptions without compromising the behaviors users expect the
> network to have.  An "extended white paper" if you will.

White paper 1.1 :D

> A last reflection is that Bitcoin is specified with an honest majority
> assumption, but also has a rational dishonest minority assumption over
> both endogenous (rewards) and exogenous (electricity) costs. Satoshi
> did not suggest, at least as I read it, that Bitcoin works with an
> rational majority assumption. (If anyone thinks these three are
> similar properties you can make some trivial counterexamples)

My take is the opposite unless I'm missing something.  Participants are 
always incentivized to choose the rational solution (Not to waste 
electricity on a minority chain).

Cheers,
-Yancy

On 2022-10-16 19:35, Jeremy Rubin via bitcoin-dev wrote:

> The Bitcoin white paper says:
> 
> The proof-of-work also solves the problem of determining
> representation in majority decision
> making. If the majority were based on one-IP-address-one-vote, it
> could be subverted by anyone
> able to allocate many IPs. Proof-of-work is essentially
> one-CPU-one-vote. The majority
> decision is represented by the longest chain, which has the greatest
> proof-of-work effort invested
> in it. If a majority of CPU power is controlled by honest nodes, the
> honest chain will grow the
> fastest and outpace any competing chains. To modify a past block, an
> attacker would have to
> redo the proof-of-work of the block and all blocks after it and then
> catch up with and surpass the
> work of the honest nodes. We will show later that the probability of a
> slower attacker catching up
> diminishes exponentially as subsequent blocks are added.
> 
> This, Satoshi (who doesn't really matter anyways I guess?) claimed
> that for Bitcoin to function properly you need a majority honest
> nodes.
> 
> There are multiple behaviors one can describe as honest, and
> economically rational or optimizing is not necessarily rational.
> 
> For example, if I run a shop that takes rain checks, but I sell an
> item to a higher bidder who didn't have a hold on the item, that is
> not honest, but it may be selfish profit maximizing.
> 
> Satoshi said an honest majority is required for the chain to be
> extended. Honest is not really defined though. Honesty, in my
> definition, is that you follow a pre specified rule, rational or not.
> 
> It seems a lot of the RBF controversy is that Protocol developers have
> aspired to make the honest behavior also be the rational behavior.
> This is maybe a good idea because, in theory, if the honest behavior
> is rational then we can make a weaker assumption of selfishness
> maximizing a parameter.
> 
> However, Satoshi did not particularly bound what aspects of honesty
> are important for the network, because there isn't a spec defining
> exactly what is honest or not. And also as soon as people are honest,
> you can rely on that assumption for good effect.
> 
> And sometimes, defining an honest behavior can be creating a higher
> utility system because most people are "law abiding citizens" who
> might not be short term rational. For example, one might expect that
> miners would be interested in making sure lightning closes are
> "accurate" because increasing the utility of lightning is good for
> Bitcoin, even if it is irrational.
> 
> It seems that the NoRBF crowd want to rely on an honest majority
> assumption where the honest behavior is not doing replacement if not
> requested. This is really not much different than trying to close
> lightning channels "the right way".
> 
> However, where it may be different, is that even in the presence of
> honest majority, the safety of 0conf isn't assured given the potential
> of race conditions in the mempool. Therefore it's not clear to me that
> 0conf working well is something you can drive from the Honest Majority
> Assumption (where honest includes first seen).
> 
> Overall, it might be nice to more tightly document what bitcoins
> assumptions are in practice and what those assumptions do in terms of
> properties of Bitcoin, as well as pathways to weakening the
> assumptions without compromising the behaviors users expect the
> network to have.  An "extended white paper" if you will.
> 
> It's somewhat clear to me that we shouldn't weaken assumptions that
> only seem local to one subsystem of Bitcoin if they end up
> destabilizing another system. In particular, things that decrease
> "transaction utility" for end users decrease the demand for
> transactions which hurts the fee market's longer term viability, even
> if we feel good about making an honest policy assumption into a self
> interested policy assumption.
> 
> A last reflection is that Bitcoin is specified with an honest majority
> assumption, but also has a rational dishonest minority assumption over
> both endogenous (rewards) and exogenous (electricity) costs. Satoshi
> did not suggest, at least as I read it, that Bitcoin works with an
> rational majority assumption. (If anyone thinks these three are
> similar properties you can make some trivial counterexamples)
> 
> Cheers,
> 
> Jeremy
> _______________________________________________
> bitcoin-dev mailing list
> bitcoin-dev@lists.linuxfoundation.org
> https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev
--=_6613a7ef5663763303175a29a5e1d139
Content-Transfer-Encoding: quoted-printable
Content-Type: text/html; charset=UTF-8

<html><head><meta http-equiv=3D"Content-Type" content=3D"text/html; charset=
=3DUTF-8" /></head><body style=3D'font-size: 10pt; font-family: Verdana,Gen=
eva,sans-serif'>
<blockquote type=3D"cite" style=3D"padding: 0 0.4em; border-left: #1010ff 2=
px solid; margin: 0">
<div class=3D"pre" style=3D"margin: 0; padding: 0; font-family: monospace">=
The proof-of-work also solves the problem of determining<br />representatio=
n in majority decision <br />making. If the majority were based on one-IP-a=
ddress-one-vote, it<br />could be subverted by anyone <br />able to allocat=
e many IPs. Proof-of-work is essentially<br />one-CPU-one-vote. The majorit=
y <br />decision is represented by the longest chain, which has the greates=
t<br />proof-of-work effort invested <br />in it. If a majority of CPU powe=
r is controlled by honest nodes, the<br />honest chain will grow the <br />=
fastest and outpace any competing chains. To modify a past block, an<br />a=
ttacker would have to <br />redo the proof-of-work of the block and all blo=
cks after it and then<br />catch up with and surpass the <br />work of the =
honest nodes. We will show later that the probability of a<br />slower atta=
cker catching up <br />diminishes exponentially as subsequent blocks are ad=
ded.</div>
</blockquote>
<div class=3D"pre" style=3D"margin: 0; padding: 0; font-family: monospace">=
&nbsp;</div>
<div class=3D"pre" style=3D"margin: 0; padding: 0; font-family: monospace">=
It's interesting that Nash Equilibrium isn't mentioned here.&nbsp; Since ea=
ch miner has the option to either contribute to the longest chain or not, e=
ven if the miners know what strategy the other miners will use, they still =
wouldn't change their decision to contribute to the majority.</div>
<div class=3D"pre" style=3D"margin: 0; padding: 0; font-family: monospace">=
&nbsp;</div>
<blockquote type=3D"cite" style=3D"padding: 0 0.4em; border-left: #1010ff 2=
px solid; margin: 0">
<div class=3D"pre" style=3D"margin: 0; padding: 0; font-family: monospace">=
For example, if I run a shop that takes rain checks, but I sell an<br />ite=
m to a higher bidder who didn't have a hold on the item, that is<br />not h=
onest, but it may be selfish profit maximizing.</div>
</blockquote>
<div class=3D"pre" style=3D"margin: 0; padding: 0; font-family: monospace">=
&nbsp;</div>
<div class=3D"pre" style=3D"margin: 0; padding: 0; font-family: monospace">=
It would be honest if the store policy said ahead of time they are allowed =
to sell rain checks for more in such an occurrence.&nbsp; Although this is =
a good example of the difference between honest and rational.&nbsp; I think=
 this means it's not a Nash Equilibrium if we needed to rely on the store o=
wner to be honest.</div>
<div class=3D"pre" style=3D"margin: 0; padding: 0; font-family: monospace">=
&nbsp;</div>
<blockquote type=3D"cite" style=3D"padding: 0 0.4em; border-left: #1010ff 2=
px solid; margin: 0">
<div class=3D"pre" style=3D"margin: 0; padding: 0; font-family: monospace">=
Satoshi said an honest majority is required for the chain to be<br />extend=
ed. Honest is not really defined though. Honesty, in my<br />definition, is=
 that you follow a pre specified rule, rational or not.</div>
</blockquote>
<div class=3D"pre" style=3D"margin: 0; padding: 0; font-family: monospace">=
&nbsp;</div>
<div class=3D"pre" style=3D"margin: 0; padding: 0; font-family: monospace">=
My take is that "rational" is probably a better word than honest.&nbsp; In =
terms of a Nash Equilibrium, each participant is simply trying to maximize =
their outcome and honesty doesn't matter (only that participants are ration=
al).</div>
<div class=3D"pre" style=3D"margin: 0; padding: 0; font-family: monospace">=
&nbsp;</div>
<blockquote type=3D"cite" style=3D"padding: 0 0.4em; border-left: #1010ff 2=
px solid; margin: 0">
<div class=3D"pre" style=3D"margin: 0; padding: 0; font-family: monospace">=
It seems a lot of the RBF controversy is that Protocol developers have<br /=
>aspired to make the honest behavior also be the rational behavior.<br />Th=
is is maybe a good idea because, in theory, if the honest behavior<br />is =
rational then we can make a weaker assumption of selfishness<br />maximizin=
g a parameter.</div>
</blockquote>
<div class=3D"pre" style=3D"margin: 0; padding: 0; font-family: monospace">=
&nbsp;</div>
<div class=3D"pre" style=3D"margin: 0; padding: 0; font-family: monospace">=
I'm curious, can RBF can be described by a Nash Equilibrium?&nbsp; If yes, =
then it also shouldn't matter if participants are honest?</div>
<div class=3D"pre" style=3D"margin: 0; padding: 0; font-family: monospace">=
&nbsp;</div>
<blockquote type=3D"cite" style=3D"padding: 0 0.4em; border-left: #1010ff 2=
px solid; margin: 0">
<div class=3D"pre" style=3D"margin: 0; padding: 0; font-family: monospace">=
Overall, it might be nice to more tightly document what bitcoins<br />assum=
ptions are in practice and what those assumptions do in terms of<br />prope=
rties of Bitcoin, as well as pathways to weakening the<br />assumptions wit=
hout compromising the behaviors users expect the<br />network to have. &nbs=
p;An "extended white paper" if you will.</div>
</blockquote>
<div class=3D"pre" style=3D"margin: 0; padding: 0; font-family: monospace">=
&nbsp;</div>
<div class=3D"pre" style=3D"margin: 0; padding: 0; font-family: monospace">=
White paper 1.1 :D</div>
<div class=3D"pre" style=3D"margin: 0; padding: 0; font-family: monospace">=
&nbsp;</div>
<blockquote type=3D"cite" style=3D"padding: 0 0.4em; border-left: #1010ff 2=
px solid; margin: 0">
<div class=3D"pre" style=3D"margin: 0; padding: 0; font-family: monospace">=
A last reflection is that Bitcoin is specified with an honest majority<br /=
>assumption, but also has a rational dishonest minority assumption over<br =
/>both endogenous (rewards) and exogenous (electricity) costs. Satoshi<br /=
>did not suggest, at least as I read it, that Bitcoin works with an<br />ra=
tional majority assumption. (If anyone thinks these three are<br />similar =
properties you can make some trivial counterexamples)</div>
</blockquote>
<div class=3D"pre" style=3D"margin: 0; padding: 0; font-family: monospace">=
&nbsp;</div>
<div class=3D"pre" style=3D"margin: 0; padding: 0; font-family: monospace">=
My take is the opposite unless I'm missing something.&nbsp; Participants ar=
e always incentivized to choose the rational solution (Not to waste electri=
city on a minority chain).</div>
<div class=3D"pre" style=3D"margin: 0; padding: 0; font-family: monospace">=
&nbsp;</div>
<div class=3D"pre" style=3D"margin: 0; padding: 0; font-family: monospace">=
Cheers,</div>
<div class=3D"pre" style=3D"margin: 0; padding: 0; font-family: monospace">=
-Yancy</div>
<div class=3D"pre" style=3D"margin: 0; padding: 0; font-family: monospace">=
<br />On 2022-10-16 19:35, Jeremy Rubin via bitcoin-dev wrote:</div>
<blockquote type=3D"cite" style=3D"padding: 0 0.4em; border-left: #1010ff 2=
px solid; margin: 0">The Bitcoin white paper says: <br /><br />The proof-of=
-work also solves the problem of determining<br />representation in majorit=
y decision <br />making. If the majority were based on one-IP-address-one-v=
ote, it<br />could be subverted by anyone <br />able to allocate many IPs. =
Proof-of-work is essentially<br />one-CPU-one-vote. The majority <br />deci=
sion is represented by the longest chain, which has the greatest<br />proof=
-of-work effort invested <br />in it. If a majority of CPU power is control=
led by honest nodes, the<br />honest chain will grow the <br />fastest and =
outpace any competing chains. To modify a past block, an<br />attacker woul=
d have to <br />redo the proof-of-work of the block and all blocks after it=
 and then<br />catch up with and surpass the <br />work of the honest nodes=
=2E We will show later that the probability of a<br />slower attacker catch=
ing up <br />diminishes exponentially as subsequent blocks are added.<br />=
<br />This, Satoshi (who doesn't really matter anyways I guess?) claimed<br=
 />that for Bitcoin to function properly you need a majority honest<br />no=
des. <br /><br />There are multiple behaviors one can describe as honest, a=
nd<br />economically rational or optimizing is not necessarily rational.<br=
 /><br />For example, if I run a shop that takes rain checks, but I sell an=
<br />item to a higher bidder who didn't have a hold on the item, that is<b=
r />not honest, but it may be selfish profit maximizing.<br /><br />Satoshi=
 said an honest majority is required for the chain to be<br />extended. Hon=
est is not really defined though. Honesty, in my<br />definition, is that y=
ou follow a pre specified rule, rational or not.<br /><br />It seems a lot =
of the RBF controversy is that Protocol developers have<br />aspired to mak=
e the honest behavior also be the rational behavior.<br />This is maybe a g=
ood idea because, in theory, if the honest behavior<br />is rational then w=
e can make a weaker assumption of selfishness<br />maximizing a parameter.<=
br /><br />However, Satoshi did not particularly bound what aspects of hone=
sty<br />are important for the network, because there isn't a spec defining=
<br />exactly what is honest or not. And also as soon as people are honest,=
<br />you can rely on that assumption for good effect.<br /><br />And somet=
imes, defining an honest behavior can be creating a higher<br />utility sys=
tem because most people are "law abiding citizens" who<br />might not be sh=
ort term rational. For example, one might expect that<br />miners would be =
interested in making sure lightning closes are<br />"accurate" because incr=
easing the utility of lightning is good for<br />Bitcoin, even if it is irr=
ational.<br /><br />It seems that the NoRBF crowd want to rely on an honest=
 majority<br />assumption where the honest behavior is not doing replacemen=
t if not<br />requested. This is really not much different than trying to c=
lose<br />lightning channels "the right way".<br /><br />However, where it =
may be different, is that even in the presence of<br />honest majority, the=
 safety of 0conf isn't assured given the potential<br />of race conditions =
in the mempool. Therefore it's not clear to me that<br />0conf working well=
 is something you can drive from the Honest Majority<br />Assumption (where=
 honest includes first seen).<br /><br />Overall, it might be nice to more =
tightly document what bitcoins<br />assumptions are in practice and what th=
ose assumptions do in terms of<br />properties of Bitcoin, as well as pathw=
ays to weakening the<br />assumptions without compromising the behaviors us=
ers expect the<br />network to have. &nbsp;An "extended white paper" if you=
 will.<br /><br />&nbsp;It's somewhat clear to me that we shouldn't weaken =
assumptions that<br />only seem local to one subsystem of Bitcoin if they e=
nd up<br />destabilizing another system. In particular, things that decreas=
e<br />"transaction utility" for end users decrease the demand for<br />tra=
nsactions which hurts the fee market's longer term viability, even<br />if =
we feel good about making an honest policy assumption into a self<br />inte=
rested policy assumption.<br /><br />A last reflection is that Bitcoin is s=
pecified with an honest majority<br />assumption, but also has a rational d=
ishonest minority assumption over<br />both endogenous (rewards) and exogen=
ous (electricity) costs. Satoshi<br />did not suggest, at least as I read i=
t, that Bitcoin works with an<br />rational majority assumption. (If anyone=
 thinks these three are<br />similar properties you can make some trivial c=
ounterexamples)<br /><br />Cheers,<br /><br />Jeremy<br />_________________=
______________________________<br />bitcoin-dev mailing list<br /><a href=
=3D"mailto:bitcoin-dev@lists.linuxfoundation.org">bitcoin-dev@lists.linuxfo=
undation.org</a><br /><a href=3D"https://lists.linuxfoundation.org/mailman/=
listinfo/bitcoin-dev" target=3D"_blank" rel=3D"noopener noreferrer">https:/=
/lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev</a></blockquote>
</body></html>

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