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Session: Economics & Mining Security

Session: Economics & Mining Security
Contributors (2)
Oct 05, 2019


A Mechanism Designer's View of Cryptocurrencies
Matt Weinberg (Princeton)

Trust & Blockchain Marketplaces
David Vorick (Nebulous)

Consensus Group Centralization: Why Are We All Here, Anyway?
Matt Corallo (Square Crypto)


Notes and Q&A from the session

On consensus group size and control

DV: Even if the size of the consensus group is smaller under PoW than some PoS, it feels like we could design systems where PoW is more stronly separated from governmental control of funds.

MC: In the short term, it’s true that a small group for PoW or PoS can withstand regulatory oversight. While people aren’t sure what’s going on and don’t want to stomp on it. But in the long term, they will eventually wake up and regulate [at which point it stops looking so different from corp-network control]

Other loosenings of assumptions you’d make?

DV: I expect we’ll have 10s of trillions of [blockchains], more than one per person; operated by machines for many purposes. That turns things upside down; I think BTC is the best general purpose one that we have today, but in 20y we’ll see robust multichain systems that feel superior tosingle chain ones: simplify fears of regulation; design for forkable/movable resilience and fludity.

Endogenous value of tokens

Q: (NN) This seems like a great Q of the EC community! We don’t have a way to evaluate whether a token would drop to become valueless.
MW: something distributed computing world has thought about: if an atucceeds, you get some $ in return. but mechanism-design tools are better for small-scale microeconomics, not macro.

Samuel Klein: Mentioned specifically: ‘dropping to 0’ feels like a binary switch, not a spectrum. continuous vs discrete systems
Samuel Klein: Seems this is design of rational micro mechanisms; not all mechanisms.