On Wed, Jul 1, 2020 at 6:58 PM ZmnSCPxj <zmnsc...@protonmail.com> wrote:
> Another analysis, similar but a little off-tangent to yours, would be to > consider miners as a breeding group with various strategies, and see which > one is able to gain more utilons (with which it creates more miners) and > outbreed the other miners. > > This models the fact that miners can use their earnings to reinvest into > their mining operations and increase their mining hashrate, and the amount > they can reinvest is proportional to their earnings. > A miner that "gives birth" to a child miner with the same strategy is, in > the so-called "real world", simply a miner that has earned enough and > reinvested those earnings to double the hashrate of their business (which, > logically speaking, would use the same strategy throughout the entire > business). > > Let us start with a population of 4 miners, 3 of which follow the > non-myopic strategy, and the remaining following the myopic strategy. > Let us postulate that all miners have the same unit hashrate. > Thus, this starting population is 75% non-myopic, 25% myopic. > > If there exists a timelocked bribe, then if non-myopic miner is chosen at > a block, it will have to sacrifice the Alice fee minus whatever lesser > transaction fee it can replace in its block. > If the Alice transaction is successfully delayed until the Bob transaction > is valid, then the non-myopic miners can get the Bob transaction confirmed. > > However, even in the case that the Alice transaction is delayed, the > myopic miner still has its 25% chance --- equal to the 25% chance of the > three non-myopic miners --- to confirm the Bob transaction and earn the > increased bribe that Bob offers. > > Thus, the non-myopic miners can end up sacrificing fee earnings, and in > the end the myopic miner still has the 25% chance to get the Bob > transaction fee later when it becomes valid. > So the non-myopic miners do not impose any loss on myopic miners. > > On the other hand, if the non-myopic miners sacrificed their chances to > include the Alice transaction in the hope of getting the later 25% chance > to get the Bob higher-fee timelocked transaction, and then the myopic miner > gets the next block, the myopic miner gets the Alice transaction confirmed > and the 25% chance to get the Bob higher fee is lost by the non-myopic > miners. > Thus, the myopic miner is able to impose costs on their non-myopic > competitors. > > So even if by chance for the entire locktime, only the non-myopic miners > are selected, the myopic miner still retains its 25% chance of getting the > block at locktime + 1 and confirming and earning the bigger Bob fee. > > Thus, we expect that the myopic miner will earn more than 25% of subsidies > and fees than the non-myopic miners, in such a mixed environment. > This is exactly our analysis, and is covered in section 2.5 of our paper. We formalize the ideas a bit more, and are able to relate the values of Alice-fee, Bob-bribe, timelock, and miner's hashpower percentage. We go a bit further into #reckless territory as well - reducing the timelock value to super low values. That's in Algorithm #1 of our paper, and is a bit more involved. > > We can then consider that the myopic miner, being able to earn more, is > able to increase its progeny (i.e. expand its mining business and inspire > new miners to follow its strategy towards success) faster than the > non-myopic miners. > > We can thus conclude that the myopic miners will eventually dominate over > the breeding population and drive the non-myopic miners to near-extinction. > This is an interesting direction that we chose to not look at. Like the MAD-HTLC authors, we assume a constant hash-rate distribution across time, which is obviously not a great assumption. It might work in the local context of an HTLC's timelock, but in our approach, we are also interested in *weak* miners, and finding them across 1000's of blocks might get tricky. > It is helpful to remember that rationality is about success *in the > universe you exist in*. > While miners may step back and consider that, ***if*** all of them were to > use non-myopic strategy, they would all earn more, the fact of the matter > is that each miner works for themselves, and themselves alone, in a highly > competitive environment. > Thus, even though they know *all of them* will benefit if they use the > non-myopic strategy, they cannot be sure, unless they are all perfectly > synchronized mind-clones of each other, that the other miners will rather > be selfish and mine for themselves, even if in the end every miner earns > less > The standard for success is to earn more *than your competitors*, not > ensure that *every* miner earns more. > > Fortunately, since miners are running a business, this competition leads > to better services to the the customers of the mining business, a known > phenomenon of the free market, yay free market greed is good. > The user Alice is a customer of the mining business. > Alice gets, as a side effect of this competitiveness of miners (which > leads to miners adopting myopic strategies in order to gain an edge over > non-myopic miners), improved security of their HTLCs without requiring > slashable fidelity bonds or such-like that MAD-HTLC proposes. > Yes. And in the context of Lightning, both Alice and Bob need to have fidelity bonds, which triples the already bad channel-lockin cost. > Using this model, it seems to me that non-myopic miners can only maintain > hold over the blockchain if all miners agree to use non-myopic strategy. > This is basically all miners forming a cartel / monopoly, which we know is > detrimental to customers of the monopoly, and is the reason why we prefer > decentralization. > If miners form a cartel and get to 51%, we are all doomed anyway. Thanks for the detailed reply. And apologies for splitting my email into two parts.
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